Originally Posted by
Jamie2009
I think the opposite, I’d rather be the debt free new comers like Flybe v2 and Emerald rather than the airlines who have had to weather the storm.
I think news will come thick and fast in the new year.
There is not enough information available at this stage to make any sort of rational decision in this regard. The incumbents have a natural advantage of being established in their respective markets albeit they may have taken on additional debt. The long term effects of this are difficult to gauge without knowing what financing costs and fare inflation might look like in the medium to long term.
Newcomers face issues regarding brand awareness and marketing costs. Emerald have an advantage here from the perspective of piggybacking IAG’s network and distribution channels. Flybe will obviously need to spend a lot on marketing but most people will still understand the brand. Flybe employees will have zero worries as long as the initial investors are prepared to underwrite the costs of the operation which will be significant. After several seasons of operation the investors will hopefully have a proof of concept which will then allow them to raise further funding to accelerate growth. I would be very surprised if the initial investors will be prepared to directly fund growth beyond the second year - the most likely good outcome would be growth funded by a mixture of operational profit and taking on debt, at which point flybe will be in a similar position to the incumbents. Airlines are too capital intensive to set up without taking on debt.
This is crystal ball territory but I am sure everyone wishes flybe and its new employees every success.