Spotter/Aviation Analyst Breathless Thread

[Goldfish Jack]

So Excel.com has now also gone into receivership, along with 8 other companies.

Does this loss of another lcc and the subsequent loss of many thousands of seats put the whole lcc operation/model under stress?

We have seen what the effect of the current high fuel price has done to many airlines? Watching an interview on BBC this morning, with some airline analyst, he said it was all very well having many cheap seats going all over the place but what do you want - a low cost carrier thinking 2 years ahead, so an airline that is focused on providing a quality service to its customers, albeit at a much higher cost, that is going to be around for many more years. Does the lcc model come under the looking glass and is it still going to be around in the coming years? Or are we going to see a return to the super-airlines running monopolies over the world? Expensive yes, but at least they will be there - BAW/American alliance, Emirates, Etihad, etc for example?

It seems so many of these lcc's come and go and what would you rather do - pay a cheap fare and hope to be able to get back home after your trip or pay a bit more and have the assurance that the more expensive airline will (hopefully) still be around when you return home?

It sure raises some interesting issues and I am sure there are going to be many arguements for and agains the lcc's and the more established airlines operations. Some of the more established airlines need to be excluded from this arguement (SAA is one, as they have a never-ending pit of money to bale them out), but one has to look at all the older government run airlines in Europe how they have come and gone, in part due to poor management and administration and civil service logic/management.

Would love to know where the airline industry is going - so many people out of jobs now, aircraft standing, subsequent reduced seating capacity - what is it going to do the airline travel industry as we know it today? What will the impact be on ANS Providers? Will the same amount of people chasing lesser seats see fares increase dramatically, or what is going to happen? Is it worth the risk of buying a fare on a new lcc - are they actually going to get up and running now, will they be able to get covering finance without penalty, etc etc?

I think the industry is still going to go through some pretty bad turbulence and one wonders who will emerge from it and under what conditions?

Are we as the travelling public going to be forced to pay more and see the end of cheaper fares, to get some stability - in turn what will the effect be on the aircraft manufacturing industry and leasing companies - will less a/c be ordered or more??

[TheQuietLife]

I simply would not call them an LCC. It is only VERY recently that they began selling seats directly to the public, and indeed for quite a while their website was only selling them exUK. Therefore, while they would sell you a one way ticket this forced any subsequent journeys into the UK to be with someone else.

[harrogate]

XL were not run to lo-co model.

So no. Plenty of lo-co's are well placed to weather the current storm. Better placed than many larger airlines.

But this is all very obvious.

[cjhants]

it`s the financially weak that will not survive, be they low cost, charter or full service.
most of the airlines that have gone to the wall recently are relatively new and do not have the facility to borrow large amounts, or get government support.
business is tough at the moment for all sectors of this industry.

[Artificial Horizon]

I don't know whether I would define XL.com as a low cost carrier. There is certainly going to be more consolidation in the market, I suspect that Easy, Ryanair, BA, KLM/Air France, Lufthansa will be well placed to survive, it will however take some fleet reductions, redundancies and a severe tightening of the belt. Airlines that I think could be in trouble... Alitalia (light), Wizz Air, SAS, Air Berlin, Swiss, Olympic. Time will tell, good luck to all effected.

[Global Pilot]

From the XL website:

XL Leisure Group Plc, XL Airways UK Limited, Excel Aviation Limited, Explorer House Limited, Aspire Holidays Limited, Freedom Flights Limited, Freedom Flights (Aviation) Limited, The Really Great Holiday Company plc, Medlife Hotels Limited, Travel City Flights Limited, Kosmar Villa Holidays plc – All in Administration (the Companies)

On 12 September 2008, Alastair Beveridge, Nick Cropper, Simon Appell and Stuart Mackellar were appointed as Joint Administrators of the Companies by the Court.

The Companies entered into Administration having suffered as a result of volatile fuel prices, the economic downturn, and were unable to obtain further funding.

The Joint Administrators cannot continue trading the business and therefore all flights operated by the Companies have been immediately cancelled and the aircraft grounded. Going forward, the Joint Administrators are unlikely to be able to trade the business or operate the aircraft.

All passengers who have yet to commence their travel should make alternative arrangements as detailed below.

[EGHH]

what do you want - a low cost carrier thinking 2 years ahead, so an airline that is focused on providing a quality service to its customers, albeit at a much higher cost, that is going to be around for many more years


I'd wager that a sizeable proportion of the travelling public could not give a toss whether the airline they are using is around in two years. So long as they get there and back, what do they care about other folks being stranded? To them, it would be on a similar level as to whether the same coach company as last time takes them from the destination airport to their hotel.

There was a woman on one of the news channels this morning fuming that these [now likely unemployed] XL employees weren't on hand 'to sort out the stranded passengers' that were going on holiday. Whilst I can understand the travellers frustration to a point, frankly it fades into insignificance compared to what the XL staff are having to deal with... It's all me me me me me me me me me me me me me me me me me me.

Best of luck to anyone caught up in this mess, anyway.

[HZ123]

'No ones died, it is just another airline going under. It is all going to get a whole lot worse, air travel lets face it is not a necessity to the masses.

[Miles Magister]

I would not be too despondent guys.

My friends in the travel agent business tell me that their numbers and current demand is up on last year and they are having difficulty meeting the inquiries for this Oct half term, Christmas/New Year and the spring.

Friends in businees tell me they are booking more air travel because their European clients do not wish to fly to them on cost grounds.

All means more demand from UK passengers. Viability is all probably based on the business model of the individual airline. There are plenty of passengers out there and I think the secure airlines will be fine.

MM

[757flyer]

Dart Group PLC, the aviation and distribution group, reports on the first five months of trading of its principal operating subsidiaries Jet2.com, the northern based airline, and Fowler Welch-Coolchain one of the UK’s largest chilled distribution companies.



The Group’s underlying profit before taxation (before specific IAS 39 fair value movements) for the first half of the year is expected to be in excess of £30 million, with full year results in advance of current market expectations.



The Group’s aviation business is set for a record summer. By focusing on its core European leisure routes, our scheduled airline, Jet2.com, is delivering improved yields coupled with load factors on these routes in excess of 90% in the peak months. Trading performance has been supported by increased charter volumes, strong cost control, and a conservative approach to fuel hedging. Our ATOL-protected holidays company, Jet2holidays.com, continues to grow strongly by meeting our customers’ demand for a package holiday from their local airport.


shareprice up 35% today

[Bolter152]

Hi everyone,

Please don't pay a lot of attention to my English as I am not a native speaker...

Concerning the statement 'is this the end of lcc's?'
I'm sorry to be rude but it seems to me that you do not understand the difference between a LCC and the management of a company.

I always have to laugh because of lines like mentioned in this threath's tittle. The 2 biggest LCCs in the world right now, Ryanair and Southwest, are also the most profitable airlines from the past years! And gues what, those 2 LCCs have the biggest savings account in the bank!

Concerning the fact that some airlines go bankrupt: Company Management people! If the management of your company isn't capable of coping with changing economical climats, well sorry then but 'bye bye'.

Is the market to little so the management can't do anything about it? Hello, rule 1 to manage a company: how will I survive above my bussiness opponents? What are my strengths and weakness and how about the other companies in the same bussiness?

In the 90ties, I believe, to little airlines managements didn't look forward enough, meaning 15 to 20 years. But people have learned, for example look at what Lufthanse is doing, or KLM/Air France.

So, please don't say something like 'oh boy, those LCCs again'. Firstly XL was a charter airline, they knew quite ahead what traffic loads to expect as they were already filling their airplanes in winter for flights in summer (a lot people book their summerholiday in winter) and yet XL wasn't capable to anticipate with their cost-structure... It think that's a shame, but hey, just my opinion right.

Have a nice day

[Captainkingkong]

The share price says it all. But so does the atmosphere in the main office there is such an air of optimism and creativity to use the assets to their maximum potential its a pleasure to see.

[Husky One]

As has already been stated, XL wasn't a LCC. Yes there will be plenty of LCC's going under this winter but equally plenty of full service/ legacy carriers too. The thread title in inappropriate. Good luck to all XL staff.

[crewmeal]

I wondered how long it would be before Ryanair would have their say:

Michael Cawley, the budget airline's deputy chief executive, said: 'This is proof positive that passengers should not book their holidays with flaky, financially-stretched airlines such as XL.'

And how are the general public supposed to know about a carriers finances?

[Desk-pilot]

As opposed to flakey Irish carriers offering the worst service in the air, a business model that doesn't seem to be working anymore, high exposure to very fickle leisure travellers, with crews who can barely speak English and are drowning in a sea of expensive new aircraft deliveries to such an extent that they are grounding 26 aircraft for the Winter and closing call centres and laying off hundreds of staff I suppose.

Nice own goal Mr Weary O'Leary.

Desk-pilot

[Hobby Flyer]

Ryanair has €2.1 Billion in the bank, and will more than likely break even this year now. The fact that it is an Irish airline is an added bonus.

Aer Arann, on the other hand......well, lets just say it looks like it's going to be a long winter for them.

[merlinxx]

OK folks, he may be a load mouth gob****e, but the company makes money fer fecks sake. Making money does give a form of security for the workforce, Flt Deck, CC, MX & ground staff. Just because he's a lippy b'stard, doesn't mean he's a no brain ********. Well remeber the the German press briefing, enhancements in long range FR flight in business class? "Free blow jobs".

No I ain't FR, and no I try not to use them, only used into SNN. I've been in this business for over 40 years, seen alot come/go, only ever been at the end of one, sad to see anyone go, but hey ho just look at those that have come and go since 1965.

It's sad, and my best wishes go to all the ex XL folks, both Air & ground. It hurts folks, but us oldies have seen it all afore, I do feel for ya. I nearly took a job with XL back in April 08!

[runway30]

Passengers are neither airline or financial experts and yet have to work out if their airline is going to be around when they turn up for their flight. How many passengers would know the difference between booking through a company with an ATOL licence, booking with a credit card and just booking directly with the airline? It is a consumer protection nightmare that needs to be sorted out!

[liffy2A]

What says that hobby? New aircraft still arriving, More money with the Knock PSO reinstated, hedged for the hard months of the summer at under $100 a barrel. Sure they have cut some of the less profitable routes for the winter(predicted downturn) but they have also added to new route being AMS and PIK. I dont see them parking planes for the winter months like other carriers. So your point is?

[Celtic Pilot]

i agree, for the previous reason but not only that but considering their entire fleet is made up of turboprop aircraft, well they are the most economical!!!!!

i cnt see Aer arann lying under a rock either,,,,

Surviver!!!! :ok:

[Sagey]

Ryanar are currently operating on the expensive side. From their Q1 results - We have taken advantage of the recent weakness in oil prices and are now hedged 90% for September at $129 per barrel, 80% for Q3 at $124 per barrel, but are unhedged for Q4.

Oil is currently $98 a barrel.

[Dougal McGuire]

Hobby Flyer!!!

Are u sure they have 2.1 billion in the bank, if they do, judging by their hedging policy! for how long?


Quote "The fact that it is an Irish airline is an added bonus."

Grow up, who cares where they are from, Irish registered, Yes, but they have no alegience to Ireland, you're sadly mistaken if you think otherwise.
The reality is that it is about as Irish as the queen! the major financiers and shareholders now are American and Irish pilots are certainly not the majority!

Also, your info on Aer Arann, where did ya hear that tripe? in the airport carpark?, maybe? or was it a flight sim forum?:=

[1station]

Two Sky Europe aircraft at Manchester have been parked on West Apron and blocked in by airport vehicles. Surely not another one gone?

[Kempus]

A lot of people seem to mistake the price of a barrel of oil for the price of Jet A1!

The price of Jet A1 is currently $131 a barrel

MOL hedged well in comparison, Aer Arran a hell of a lot better by the sounds of it!

Kempus

:ok:

[Hobby Flyer]

For the poster with the username "Dougal McGuire:"

The point about the Irish Airline in trouble was made on Radio in Ireland this morning by an experience aviation consultant with a doctorate in transportation.

I agree with your point about Ryanair. My earlier post was in response to this from the poster calling him or herself "Desk Pilot:" As opposed to flakey Irish carriers offering the worst service in the air."

And finally, may I congratulate you on choosing an extremely appropriate username.


:D

[Miles Magister]

There are still plenty of passengers out there so those still standing should benefit and hopefully it will stabalise the situation.

[McC]

thefunkyone

No You're not alone but....

The doomsayers assume that all of a sudden no one flies. The fact is that people will fly and the oil price is reducing. Look at TUI travel and T Cook share prices, up about 7%.

I find the date of XLs demise rather chilling. I remember how I felt post 9/11. Stay positive.

Best regards

McC

:ok:

[Desk-pilot]

Ryanair may or may not have two hundred quid or two billion, my loathing for Mr O'Leary is due to his objectionable human characteristics. There is no need for his mud-slinging approach to business. My wife (who incidentally hails from Cork) said he makes her ashamed to be Irish because he is the absolute antithesis of Irish warmth and goodwill.

Like many on here I'd dearly love to see O'Leary out on his ear but that's because of him. The truth is that he will be hurting every bit or even more than many because of his dependence upon the bottom of the barrel leisure market so methinks he will need his cash reserves.

As for Arann, well I wish them well - they seem to be a well run airline with an efficient fleet and some good routes.

Finally, I have no idea why you seek to make personal attacks on my username, but as it is a legacy from my days as a desk bound worker who now spends his working day at the controls of an airliner I don't understand your point. From your own name I take it you aren't exactly flying 'the heavies' yet but I see no reason why that should exclude you or anyone else from the debate.

Desk-pilot

[WHBM]

I have removed my post as I don't really care to have it reclassified under a "Breathless Aviation Analyst" heading.

[liffy2A]

I would love to remove my post to, But will leave it just to prove my point. What a title for the tread to be move too!!!!!!!!!