Originally Posted by
speedrestriction
Mesa's business model is to fly regional services on behalf of US mainline carriers. They may see some mileage in the model in Europe. Flybe has too many aircraft in the UK it would appear. Perhaps a fleet redistribution would be on the cards in the event of a successful bid.
It is harder to sell onboard to business people on 40 minute flight to another UK city than when you have people sitting down the back for 2+ hours. Additionally their baggage requirements are less. Priority boarding is not such an issue when a lot of the passengers are business pax with maybe only a laptop case - embarkation and disembarkation on the Dash eight never take particularly long. If BE is to make money it needs to be on the fare. It is hard to do this when your fleet size is so large that basically you are diluting your own yield through having an excessive number of rotations between airports. The company needs to shrink the fleet or diversify the business model. The company does not have enough cash to renew the fleet which means that they are basically stuck with the current fleet of Dash + ERJ. The Dash is (in my opinion) not fit for anything much further than 1hr 15mins due to comfort issues so there is not much scope to change length of sector so as I see it, BE's path back to profitability is through capacity management and/or flying for someone else. The Embraers offer a bit more flexibilty in terms of sector length but the problem is that they are not cost competitive on longer routes vs a full 737 or 320. I think the Virgin feeder thing will be of limited scope - I cant see LHR allowing any serious number of Dash 8 or 175 rotations into the airport due to wasted capacity. Regrettably there is no easy option for BE.
The point about the EMB not being cost competitive against 737/320 is critical. These days, if you price a flight at £20-£30 it seems you can fill a 737/320 on a lot of routes. You fly it with 95% load factor and then try and build demand which you manage with incrementally higher fares and getting some premium passengers on flexible tickets. If the EMBs can't cover costs with much lower seat numbers at £20-£30 per seat sector and 95% load factor then they are the wrong aircraft. Short-haul airline economics are now based on lowest seat/mile costs. If the route can fill a 737/320 then it flies, if not it's dropped. I don't know how the dash-8 compares but Flybe ticket prices weren't at Easyjet levels last time I looked at booking BRS/BFS (Easy) or BHX/BFS (BE). So either BE couldn't run at Easy 320 prices or they were taking the michael with a different model of high fares and half empty. The lo-co model also drives addtional revenue from everything from seat selection and bags to car hire and parking and the whole website back-end and commercial team need to be on the ball to achieve that. In the far right corner of the product life cycle graph everything needs to be optimised and only the best producers survive.