Bonza has its AOC
On top of that if the delays move into prolonged stays the airline has to foot the bill for accommodation and expected living costs, ie meals.
The Ryanair boss had a big cry about it when the Icelandic volcano was blowing it's lid. Most of the response was that he suck it up and not try to sell 5 Euro tickets so the airline can cater for contingencies....
The Ryanair boss had a big cry about it when the Icelandic volcano was blowing it's lid. Most of the response was that he suck it up and not try to sell 5 Euro tickets so the airline can cater for contingencies....
What they are really saying is KPIs and stupidly high margins are at risk so bonuses might not be paid. Even the more better.
The EU model (per Regulation (EC) No 261/2004) stipulates a set euro value for compensation for delays.
Source: https://europa.eu/youreurope/citizen...sation-delay-1
Cancellations are treated differently. In the case of a cancellation you are entitled to reimbursement, re-routing or return costs, on top of the delay compensation. (https://europa.eu/youreurope/citizen...m#cancellation)
Source: https://europa.eu/youreurope/citizen...sation-delay-1
Cancellations are treated differently. In the case of a cancellation you are entitled to reimbursement, re-routing or return costs, on top of the delay compensation. (https://europa.eu/youreurope/citizen...m#cancellation)
Spot on. The EU laws are best practice because they encourage airlines to ensure a service is reliable, be it with newer and more reliable aircraft, engineering support, appropriate levels of staff and ground equipment etc. The compensation isn't payable if things like air traffic management decisions, political unrest, security threats or weather events cause the delay. Strike action by 3rd parties MAY be considered as extraordinary circumstances and therefore be exempt from compensation payouts but strike action by an airlines own staff results in compensation being paid to passengers. Maybe in Australia this would result in better industrial relations and in 20+ year old aircraft being assigned to charter ops only or being flown between maintenance ports only?
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Ryanair provided a handy summary of the potential effect of the regulation, together with some recent case rulings, in the Risk Factors section of their 2023 annual report (relevant section below). I couldn't see any specific breakout of compensation paid under the regulation in their financial reporting (but I didn't break out the fine tooth comb, so it may be buried in there somewhere).
Source: Ryanair Group 2023 Annual Report
Maybe in Australia this would result in better industrial relations and in 20+ year old aircraft being assigned to charter ops only or being flown between maintenance ports only?
I like how Ryanair seem to think that technical difficulties and striking staff are 'out of their control'. Pay staff more, keep more spares, don't charge 5 pound for a ticket....
But hey, the local council gave us a good deal at the local strip.
Ah yes, the old "long term" plan. The ever present problem with that approach is that you first have to navigate the short term to get there. Start ups are cash incinerators, some (like very capital intensive endeavours) moreso than others; if you haven't hit at least break even (or at the very least have a positive trajectory) by year two, you really need something like a government or sovereign fund backing you. This "if only they had scale" line is a manifest nonsense; cranking the handle faster on a model that is burning cash just makes it burn cash faster.
Their CEO has said that they are close to breakeven, but the recent tech issues, wet leases etc would likely have blown that out of the water. That is probably also impacting their ability to wring out all the ancillaries that their model relies upon, so that makes it hard to bump up the revenue side and the cost only grows.
Then look across the Pacific at Flair and you have to wonder what 777 is playing at. Flair just lost its only competitor in the low cost space but seems to be lurching from crisis to crisis. Bonza is no doubt haemorraging money, and 777's dubious financing may be drying up as they are struggling to get their Everton takeover deal sealed. If it were my money, I would shut down the airlines and instead just focus on leasing aircraft, which is much more lucrative than owning AOCs, especially when you have the types that everyone wants in an LCC config.
Bonza looked like the goods when you could get cheap 737 Maxes and pilots to fly them during the pandemic, but Kansas has gone bye-bye.
Personally, I would love to see the Bonza model live long and prosper. I think that there is money to be made out there with some of the routes they have tapped that are being ignored by the Big Two. But what it really needs is a set of E195-E1s or A319s that are/were cheap as chips, and run them for 10-12 hours per day, plus taking cargo, holidays and any other way imaginable to generate the revenue that allows you to sell cheap base fares. Still, that wouldn't make them immune from AOGs, pilot poaching or any of the other challenges that are part and parcel of the business these days.
Then look across the Pacific at Flair and you have to wonder what 777 is playing at. Flair just lost its only competitor in the low cost space but seems to be lurching from crisis to crisis. Bonza is no doubt haemorraging money, and 777's dubious financing may be drying up as they are struggling to get their Everton takeover deal sealed. If it were my money, I would shut down the airlines and instead just focus on leasing aircraft, which is much more lucrative than owning AOCs, especially when you have the types that everyone wants in an LCC config.
Bonza looked like the goods when you could get cheap 737 Maxes and pilots to fly them during the pandemic, but Kansas has gone bye-bye.
Personally, I would love to see the Bonza model live long and prosper. I think that there is money to be made out there with some of the routes they have tapped that are being ignored by the Big Two. But what it really needs is a set of E195-E1s or A319s that are/were cheap as chips, and run them for 10-12 hours per day, plus taking cargo, holidays and any other way imaginable to generate the revenue that allows you to sell cheap base fares. Still, that wouldn't make them immune from AOGs, pilot poaching or any of the other challenges that are part and parcel of the business these days.
Personally, I would love to see the Bonza model live long and prosper. I think that there is money to be made out there with some of the routes they have tapped that are being ignored by the Big Two. But what it really needs is a set of E195-E1s or A319s that are/were cheap as chips, and run them for 10-12 hours per day, plus taking cargo, holidays and any other way imaginable to generate the revenue that allows you to sell cheap base fares. Still, that wouldn't make them immune from AOGs, pilot poaching or any of the other challenges that are part and parcel of the business these days.
The only issue is, as mentioned above, you need to maintain low utilisation rates, otherwise costs will cripple you. Allegiant ran with about 5 hours a day usage. They have since been caught out by switching to mid life Airbus aircraft, with higher than originally forecasted costs, and have now started buying factory fresh in order to get some stability on expenses.
The biggest challenge for Bonza’s survival is simply getting the revenue high enough. That prospect is very challenging as the population catchments they are flying to are small. It’s clear as mud, the business model they are running today, will never be sustainable on the current network. So what is Plan B? Perhaps become a transcontinental operator, could be a gap in that area.
Nobody seems to like dealing with Perth Airport however.
This "if only they had scale" line is a manifest nonsense; cranking the handle faster on a model that is burning cash just makes it burn cash faster.
The biggest challenge for Bonza’s survival is simply getting the revenue high enough. That prospect is very challenging as the population catchments they are flying to are small. It’s clear as mud, the business model they are running today, will never be sustainable on the current network.
Attempting to run a negative net debt operation off cheap as chips aircraft is a fine art that only the likes of Allegiant managed to have success with.
The only issue is, as mentioned above, you need to maintain low utilisation rates, otherwise costs will cripple you. Allegiant ran with about 5 hours a day usage. They have since been caught out by switching to mid life Airbus aircraft, with higher than originally forecasted costs, and have now started buying factory fresh in order to get some stability on expenses.
The biggest challenge for Bonza’s survival is simply getting the revenue high enough. That prospect is very challenging as the population catchments they are flying to are small. It’s clear as mud, the business model they are running today, will never be sustainable on the current network. So what is Plan B? Perhaps become a transcontinental operator, could be a gap in that area.
Nobody seems to like dealing with Perth Airport however.
The only issue is, as mentioned above, you need to maintain low utilisation rates, otherwise costs will cripple you. Allegiant ran with about 5 hours a day usage. They have since been caught out by switching to mid life Airbus aircraft, with higher than originally forecasted costs, and have now started buying factory fresh in order to get some stability on expenses.
The biggest challenge for Bonza’s survival is simply getting the revenue high enough. That prospect is very challenging as the population catchments they are flying to are small. It’s clear as mud, the business model they are running today, will never be sustainable on the current network. So what is Plan B? Perhaps become a transcontinental operator, could be a gap in that area.
Nobody seems to like dealing with Perth Airport however.
EJets or A319s can do high utilisation and won't hurt the maintenance too much, but the lower capital cost will also help to ensure that if they have to sit on the ground for extended periods that it doesn't hurt. Having a Max on the ground awaiting spares is a killer, and doubly so if you're paying another airline to fly your schedule for you.
They're in a challenging position, but it can work as long as the chequebook it available, and that's looking shaky.
EJets or A319s can do high utilisation and won't hurt the maintenance too much, but the lower capital cost will also help to ensure that if they have to sit on the ground for extended periods that it doesn't hurt. Having a Max on the ground awaiting spares is a killer, and doubly so if you're paying another airline to fly your schedule for you.
There's a big difference in the advancement of the 100-200 seat jet market in terms of technology compared to say the 30-70 seat turboprop market, where the new machines are not much different to the old. A Max will deliver significant operating advantage over an E190 if it can be filled, probably even at 70% load given the right pricing. You just have to keep it moving around to make use of that advantage. The same as a Q400 can be operated cheaper than an ATR-72 by utilizing its positives, especially as either ages.
Not sure where you are getting the goss on the EJets being good for spare availability and reliability on high utilization. Maybe if you buy a few more for use as spare parts as well. Alliance had only recently planned to 'part out' 12 or so of it's E190s, reducing that to 7 due to aircraft shortages of late. Says something if until recently it was better selling your fleet as spares rather than ongoing assets.
It's worth noting that Alliance doesn't take part in Embraer's spare parts pooling program.
Alas, back to the Bonza.
That MAX efficiency will be very important shortly as we look like we are headed for fuel surcharges across the industry very soon. Certainly a bit of caution lingering around many airline management boardrooms at the moment.
A Max will deliver significant operating advantage over an E190 if it can be filled, probably even at 70% load given the right pricing.
They are two VERY BIG variables right there. Which one is cheaper when under utilised or tickets are too cheap? Yes I thought so.
They are two VERY BIG variables right there. Which one is cheaper when under utilised or tickets are too cheap? Yes I thought so.
Everything in context: Alliance's model is built on having a whole stack of spares available, which is what they had huge success with in buying the Fokkers from Austrian years ago. The ones that are being broken up are some of the oldest that were operated by JetBlue, and what they have found is that they are paying more because they have more green time on the engines and other LLPs than expected. That has changed the value equation, and the high demand (and replacing the Fokkers) has pushed more into service before they get chopped up.
PS just looking at some burn figures the 737 Max has marginal fuel burn difference to the E190, so the only real difference is going to be lease costs, and since the Max is brand new I assume you will have warranties and guarantees as well keeping maintenance costs down, which on a 10 year old Embraer airframe you'd probably have to do what Alliance is doing to keep costs down, hence why they are so cheap to acquire.
Last edited by 43Inches; 8th Apr 2024 at 10:41.
Pilots running airlines
There’s a reason LCC use NEW 737’s or 320’s.
They flog them as hard as possible and they’re reliable (controlled costs).
No LCC’s running ejets… (as a single fleet type)
There was an interview I saw a long time ago with David Needleman (JetBlue/Azul/TAP) comparing the ATR vs E195 vs A320. On a total “A-B” operating cost the ATR to E195 was an extra 40% (but more seats) and the E195 to A320 was only about 5% more (but a big jump in seats). Goes back to the point above about E jet vs MAX.
Bonza are deliberately targeting “new” demand. There’s going to be plenty of hits and misses. The MAX (or A320) is the right aircraft.
Just imagine Bonza in a few years, MCY/CG/MEL base (all of which would have good “incentives”), West Sydney opens, new base plus trunk routes to secondary airports only (no KSA!!). Then you’ll likely see a profitable LCC that’s not part of the QF group.
Wanna fix Aus aviation??
- 4x runways in MEL (# config)
- 2x parallel runways in PH
- West Sydney
- high speed exits!!
- 2-3 “line up” taxiways per runway (allow sequencing)
Tell me that wouldn’t dramatically change the endless delays and expensive airports in Aus.
Fund it with pro rata landing fees, longer the airborne delays, the cheaper (->$0) the fees get. Watch how fast they’d build concrete.
They flog them as hard as possible and they’re reliable (controlled costs).
No LCC’s running ejets… (as a single fleet type)
There was an interview I saw a long time ago with David Needleman (JetBlue/Azul/TAP) comparing the ATR vs E195 vs A320. On a total “A-B” operating cost the ATR to E195 was an extra 40% (but more seats) and the E195 to A320 was only about 5% more (but a big jump in seats). Goes back to the point above about E jet vs MAX.
Bonza are deliberately targeting “new” demand. There’s going to be plenty of hits and misses. The MAX (or A320) is the right aircraft.
Just imagine Bonza in a few years, MCY/CG/MEL base (all of which would have good “incentives”), West Sydney opens, new base plus trunk routes to secondary airports only (no KSA!!). Then you’ll likely see a profitable LCC that’s not part of the QF group.
Wanna fix Aus aviation??
- 4x runways in MEL (# config)
- 2x parallel runways in PH
- West Sydney
- high speed exits!!
- 2-3 “line up” taxiways per runway (allow sequencing)
Tell me that wouldn’t dramatically change the endless delays and expensive airports in Aus.
Fund it with pro rata landing fees, longer the airborne delays, the cheaper (->$0) the fees get. Watch how fast they’d build concrete.
Brisbane-Cairns -3.8%
Brisbane-Townsville -6.3%
Brisbane-Mackay -7.2%
Brisbane-Launceston -4.9%
Brisbane-Darwin -2.0%
Brisbane-Isa -2.9%
If you look at some of the data that is coming out on a monthly basis, you will find a large chunk of the demand isn’t new. Have a look at the Jan traffic from Brisbane, for comparable Bonza routes from its Gold and Sunny Coast bases. The traffic is actually going negative. Those who previously have commuted to Brisbane are taking the Bonza services. It might be an idea to focus some on the ground, local and digital marketing in some of the Brisbane Basin burbs. The regions can only give you so many passengers, which they are finding out with the likes of Mildura, Tamworth, Wellcamp and Rocky, the traffic is in the large metro areas, you just need to convince them to drive away from Brisbane.
Brisbane-Cairns -3.8%
Brisbane-Townsville -6.3%
Brisbane-Mackay -7.2%
Brisbane-Launceston -4.9%
Brisbane-Darwin -2.0%
Brisbane-Isa -2.9%
Brisbane-Cairns -3.8%
Brisbane-Townsville -6.3%
Brisbane-Mackay -7.2%
Brisbane-Launceston -4.9%
Brisbane-Darwin -2.0%
Brisbane-Isa -2.9%
None of that is surprising, having previous knowledge of the Skytrans TWB-SYD (pre Qlink @ BWW), they could fill a Dash at less than $250. Above that price people would just drive to Brisbane.
That’s the advantage Brisbane (and to a lesser degree Melbourne, if Avalon was on the east side…) has over Sydney (for consumers), there’s real competition between airports for traffic if airlines offer competitive options.
It would be interesting to see the drop in SYD-BNE/MEL numbers once WSI opens.
Then we might see airport charges drop somewhat.