UK: Michael Bishop's obsession. (2 of 4)

UK: Michael Bishop's obsession. (2 of 4) - Even Bishop will admit though that the airline business has a certain mystique, a constant undercurrent of excitement. He himself "caught the virus" when, as a 16-year-old schoolboy, he took a holiday job at Man

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Last Updated: 31 Aug 2010

Even Bishop will admit though that the airline business has a certain mystique, a constant undercurrent of excitement. He himself "caught the virus" when, as a 16-year-old schoolboy, he took a holiday job at Manchester Airport with a tiny charter and aerial photography company. When he left school he spent three years learning the family business but both he and his father soon realised that his heart lay elsewhere.

Bishop senior sold the business and retired, while Michael, now 21, started his airline career proper at Manchester by setting up an aircraft handling business for a locally based airline. When that airline, Mercury, was taken over in 1964 by British Midland Airways he joined the new company and has remained there ever since. He was its general manager by the age of 27, managing director at 30; then, in 1978, with his long-term partners John Wolfe and Stuart Balmforth, he staged one of the UK's first management buyouts.

They paid £1.8 million. Almost exactly a decade later the Scandinavian airline SAS bought a 25% stake for £25 million, valuing the company at £100 million and leaving Bishop very rich.

Rich but, crucially from his point of view, still in control: holding the reins is a sine qua non for him. He has taken British Midland from being a tiny regional airline to a trunk carrier with 52 aircraft and 4.5 million passengers a year and by the mid-1990s wants it to be a force in Europe too. Later still he would like it to have a slice of the long-haul market. But the growth must be incremental and being in charge is more important to him than being big.

"I had a view, rightly or wrongly, which I've held to this day, that the size is actually not important necessarily. It's whether you have more than 51% of the shares. The issue really was whether you wanted to be a controlling shareholder or whether you wanted to be a manager of shareholders' funds in a much bigger business.

"My partners and I have had plenty of opportunities to subordinate our holding to go for much quicker and larger growth, but it would have meant that we relinquished control of the company, so to a certain extent we've paced the size of our growth. We've decided, so far, that absolute tenure of control is more important than the size of the business."

British Airways' size, on the other hand - it has about five times as many aircraft and passengers - is a matter that bothers him. He thinks that it has been misusing its dominant position in the market. On the Heathrow to Glasgow route, for example, BA now runs 14 flights a day, every hour on the hour. It is shovelling huge amounts of unwarranted capacity onto the route, says Bishop.

"The total travel market has been falling slightly over the last nine months, so they've actually deliberately lost money themselves and marginalised our own operation."

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