Turbulence at the top of bmi

BMI, the former British Midland Airways, has confirmed the early departure of chief executive Austin Reid, right-hand man to the group's founder and chairman Sir Michael Bishop.

The management shake-up, which will see Reid replaced by finance director, Nigel Turner, will be seen in the industry as an attempt by Sir Michael to reassert control over the airline. The company lost £9.8m last year after a £19.6m deficit in the previous 12 months.

However, a spokesman denied that there was anything sinister involved in the changes. He said Reid, who will be 60 next year, was due to retire anyway. He just wanted to leave early and would not be due any severance pay beyond his normal contractual terms, the spokesman added.

Reid was one of the team who helped it through a period of rapid growth in the 1980s. Sir Michael, who still controls just over 50% of the shares in bmi, has never been far from the management of the private group.

Like all full-service airlines, it has faced increasing pressures from new low-cost operators such as Ryanair and easyJet. It launched its own discount operation, BmiBaby, to compete with them. Bishop has been under pressure to merge his Derby-based operation with Virgin Atlantic, which is keen to do a deal.

As part of the management changes, legal director Tim Bye is appointed deputy chief executive and Alex Grant becomes chief operations officer.