Bmibaby's bid to beat 'bloodbath'

BUDGET airline bmibaby is striking up a marketing alliance with rival European low-cost network Germanwings in what is likely to herald the next stage of the expected consolidation among the fare-cutting, no-frills carriers.

The move comes as the latest victim of the forecast 'bloodbath' among budget airlines, Germanbased V Bird, which has been flying in and out of Manchester, declared itself bust.

With cut-throat competition this winter expected to take its toll among Europe's new breed of lowcost airlines, Germanwings, based in Cologne and an indirect subsidiary of flag carrier Lufthansa, says it expects to develop relations with bmibaby, Britain's fourthlargest budget airline.

It is understood that Germanwings, which flies 14 aircraft on European routes including to Gatwick, Stansted and Edinburgh, plans 'marketing co-operations' with bmibaby, the budget airline progeny of British Midland group bmi. The plans would see the airlines market each other's routes.

The move is seen as a defensive ploy in the expected shake-up of the market which Ryanair's Michael O'Leary has said will see about half of Europe's 50 or so budget airlines go bust in the next few years.

Germanwings vice president Andreas Bierwirth says the airline has dismissed outright alliances between low-cost airlines as unworkable but, speaking on the second anniversary of the airline's creation, said working with bmibaby meant their 'combined strength' could enhance sales. A bmibaby spokesman said: 'We are looking at developing the relationship.'

The airlines' parent companies, Lufthansa and bmi know each other well from being part of the Star Alliance.

Bmibaby has so far avoided the German market, which many see as the potential graveyard for some of the biggest investment in the European no-frills market-Germanwings, co-owned by Lufthansa and industrialist Albrecht Knauf, is slugging it out with Hapag-Lloyd Express, owned by Thomson holidays group Tui, and Air Berlin, backed by the German package holidays industry.

Privately-owned former British Airways subsidiary dba is also trying to make its mark. EasyJet and Ryanair, the British and Irish giants of the sector, have also set up bases in the country.