My point about cost was aimed at the inability of AO to generate sufficient yield despite the lower cost. Not only did the margin fall the revenue did too. As such I alluded to the reality of the thin route. Whilst it is possible that the J* product ex Australia may work, I think it will struggle in a market with plenty or other carriers. It struck me the lack of ability of AO and indeed J* Asia to grab a foothold. I also believe that underpinning the business plan is a denial of the elasticity of leisiure travel. I think the assumptions are very loaded for the business case. With repsect to the legality or otherwise, my sources tell me there are a number of rubbery measures being applied to strengthen the business dynamic. It is this point which leads me to consider how errant their thinking is. If they fudge on the legals....
I also question the demographic..i am not so sure our market of retirees will want a discount carrier on their much awaited retirement.
We are seeing the same assumptions with J* Asia. Yet our management are so tunnel visioned, they dont understand the model is flawed at the outset. My point in essence, if slick marketing and a flexible cost base work AO or J* asia would be doing it.
There are no magic bullets...
If in fact J* is a poriftable start up. Show me an audited set of accounts. P/L Bal sheets etc
The lack of solid information means that for a period the losses can be hidden and shifted....but longer term is the case is rubbery it will fold into mainline which after all is the established business providing the capital for these "adventures"
I feel sorry for my colleagues in AO. It's funny how management just walk away and a news release is all we get
