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Old 2nd Oct 2018, 10:30
  #20 (permalink)  
Join Date: Oct 2002
Location: London UK
Posts: 6,281
Originally Posted by msbbarratt View Post
For quite a lot of people buying a long haul ticket is a notable investment, and they're always going to buy the cheapest seat available
This one, which regularly appears here, but also in airline boardrooms, is just not true. If it was everyone would have booked Primera and it would be BA and AA who were without revenue. But it's not. Things like corporate travel contracts, more favoured departure points, marketing presence, sophisticated yield management, premium class service, frequency, past experience, connections, and 1,001 other aspects come into play.

Also, at what point does an airline business collecting large sums in fares well in advance of the fly date stop being a struggling airline and starts becoming a Ponzi scheme?
Again, contrary to some belief, the carrier does not get the money until the trip is made. This is because the credit card company is liable to refund the money if they go under, so they (actually a financial intermediary) keep the money until the service is provided. There is no huge balance sheet amount of prepaid fares in airline accounts. This credit card approach started when such were only a minor proportion of fare payments, now it's pretty universal.

But in a way that system already exists, as the CAA should normally not award a company their AOC unless they have a viable business and enough cash to sustain the operations.
That's as maybe, but operators like this across multiple CAAs are challenging to keep up with, and one has to ask why they do this. Primera operated primarily from Copenhagen, Denmark, but were owned in Iceland and registered (this year) in Latvia, although they seem to have had no operations from that country. The aircraft registrations rolled around between these three over time. Furthermore the Transatlantic flights were principally from the UK. The traditional national CAA structure was not designed for regulating this sort of thing.

Last edited by WHBM; 2nd Oct 2018 at 11:33.
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