just to cheer you up !!!!
What about this one ?!?
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Dear EUJet Staff Member:
EUJet is one of many startup airlines but with a major difference. Its
management has an impeccable pedigree of bankrupt airlines which they helped
bankrupt and one is led to the reluctant conclusion that EUJet is either a
scam for the owners to bleed the business dry before it blows up or else a
severe case of the blind leading the blind and even worse the blind having
egos the size of a Boeing 747 but with a Section 41 failure imminent.
In my view, EUJet is run like a lunatic asylum and if it continues the way
it has started it will not even last the winter. The incompetence of the
commercial and marketing department is unbelievable and it is touch and go
whether or not it exceeds that of JetMagic. And in case anyone thinks othewise a British Airways background is not exactly a good reference.
This letter, like EUJet is doomed to failure as nobody will pay the
slightest attention. It has been carefully written and it is written with
the hope that people will read it, think about it and ask questions. If it
stimulates debate, causes change and rescues the airline it will have been
worthwhile. It would be a pity after all the work going into for EUJet for
it to go under when they are so many devoted people at ground level working
their butts off to try and make it succeed. However, in my view, and I am a
long time at it, only radical restructuring, right now, has a chance of
pulling the chestnuts out of the fire and the cancer may be so far gone as
to be terminal.
AIRPORTS:
Manston Airport has been chosen as the main base. Whoever chose this
airport needs their head examined. There is no way Manston can succeed. It
is too far from anywhere, has no public transport and has no market. Any
idea that load factors of 70-80% can be obtained from this location are
totally fallacious.
And as for running a bus at 3 a.m. from Bluewater to Manston the mind
boggles. Why anyone would want to go to Bluewater at 3 a.m. to pickup a bus
to Manston is beyond comprehension. But it illustrates perfectly a thought
process.
ROUTES:
The routes chosen are routes that no other airline would operate - or is
likely to. Apart from Shannon to Dublin the routes do not have any
established market. To make matters worse the schedule chosen is made up by
people seeking the maximum utilisation of aircraft without any regard to
commercial considerations.
Taking first Kent to Amsterdam there is no market for a 6.15 a.m. flight to
Amsterdam much less one home at 10 p.m. in the evening. It is unlikely the
midday flights will generate much load. Accepting for a moment that one
could achieve 70% on 202 it is unlikely that over 40% will be achieved on
201 which gives an overall factor of 55% which is not remotely near break
even. On 205 and 206 the outbound load factor will be about 40% due to the
late departure whereas the return will be about 30% at best giving an
overall of 35%.
It is worth noting that the 201 is booked at 1h 50 m whereas the reverse
flights are booked at ten minutes longer. Somebody has not told ops that
Amsterdam airport at that hour of the morning is prone to delay and 2h. 15
would be a more realistic timetable.
With regard to the Dublin route this has to be a disaster as 6.15 is too
early for the first flight out for the market and there is no market from
Dublin to Manston at 8.45 p.m. in the evening.
The next rule which is being ignored is that you cannot make money on one
flight a day e.g. Kent to Glasgow.
I could go on but in my view the time to call a halt to Manston is now as
the cash drain will be horrendous.
Turning to the Shannon to Dublin route, in my view this route cannot be run
profitably without a PSO. Everyone else has tried and failed and there is
no reason to think EUJet will do any better.
Let me go further. Take September 22 for example. EU have flights at
0645, 1000 and 1900. Yet there are 1200 seats on offer by other carriers
in large aircraft between 0700 and 1000 at 0700. 0815, 0830 and 0900. The
maximum load factor therefore on two of the three flights is about 40% and
as for the 1900 flight you can forget it.
To simplify EUJet are adding 600 seats a day to a market. This is an extra
25% on a route which is known not have a market of even EUJet alone much
less the other three quarters. And as for running Fokker 100 aircraft on
that route, forget it! Toy aircraft cannot compete with A300's and B 767's,
Simple mathematics puts the cost of operating this route at ?10,000 -
?12,000 per day. Revenue will be about ?4,000 giving a deficit of guess
what? The same aircraft will lose a further ?3,000 per day so on average we
can estimate that the aircraft will conservatively lose ?10,000 per day.
Multiply this by 5 aircraft means ?50,000 per day down the drain. That is
about ?1 million per month. Let's be generous and divide this by two and
you still arrive at an annual loss of ?6 million per annum. Bear in mind
that one is now heading into the winter and in six months time the drain
will still be in the millions. The accounts of the company show no prospect
of this money being available so something has to give.
When I was young I would look at figures like this and say "that management
are geniuses because they must know something I don't know". Now with age
and experience I look and say "The Bloody Fools!"
The catch twenty two of all this is that if EUJet lift their fares to
breakeven levels based on 70% load factor they will get no passengers and
the fares they must charge to get passengers are so low as to be totally
uneconomic. You cannot take people from Shannon to Dublin at ?10, Dublin to
Kent at ?25 or Amsterdam to Kent for ?28 and make money. It simply cannot
be done and defies all the laws of economics. They are not a low cost
operator but want to charge low cost fares. A guaranteed recipe for
disaster.