The Loco showdown??
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Very interesting to note the comments on this thread. Monarch have also been quietly ( or not ) been creating a niche market out of manchester. As a commuter to Malaga on a regular basis, £50 or thereabouts for an all inclusive scheduled service beats the local LOCO's in every way. Prices are going up a bit at the moment but the flights all seem full so the cost of success I guess.
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It is highly unlikley that Jet2 has shown any profit at all IN IT'S OWN RIGHT.
All the figures published show Jet2 making a contribution to the group profits. The overheads will be conveniently covered elsewhere. If it's wasn't for the Channex Freight and Post Office work, Jet2 would be dead in the water.
Ryanair and easyJet are still making year round profits, just reduced profits as the overall competition bites. The problem they face is that they have no obvious ways to cut their costs further, something which the likes of BA can still do to help level the playing field a bit. You have to laugh at O'Leary and Webster complaining that business is difficult "because the competitors are offering seats at stupid rates "
EUJET, if it ever gets going, will be run on the basis that the Fokker 100's are already owned, so flying them ( and covering direct costs) is better than parking them. Overall it might grab a small niche, but will struggle to build average yield's because of the location/product. They will run head to head with existing carriers on many of their routes, and will only attract business on price.
MyTravelLite/ Monarch/ First Choice/ Globespan..all branding excercises for existing seat only sales.
The LOCO bubble is well and truly burst. The guys in Europe have started heading west, making it difficult for EZY/RYR to head east.
Lots of aircraft on order difficult to see whwre they are all going to end up.
The winners? The Consumer....low cost travel to a variety of destinations with a choice of carriers.
All the figures published show Jet2 making a contribution to the group profits. The overheads will be conveniently covered elsewhere. If it's wasn't for the Channex Freight and Post Office work, Jet2 would be dead in the water.
Ryanair and easyJet are still making year round profits, just reduced profits as the overall competition bites. The problem they face is that they have no obvious ways to cut their costs further, something which the likes of BA can still do to help level the playing field a bit. You have to laugh at O'Leary and Webster complaining that business is difficult "because the competitors are offering seats at stupid rates "
EUJET, if it ever gets going, will be run on the basis that the Fokker 100's are already owned, so flying them ( and covering direct costs) is better than parking them. Overall it might grab a small niche, but will struggle to build average yield's because of the location/product. They will run head to head with existing carriers on many of their routes, and will only attract business on price.
MyTravelLite/ Monarch/ First Choice/ Globespan..all branding excercises for existing seat only sales.
The LOCO bubble is well and truly burst. The guys in Europe have started heading west, making it difficult for EZY/RYR to head east.
Lots of aircraft on order difficult to see whwre they are all going to end up.
The winners? The Consumer....low cost travel to a variety of destinations with a choice of carriers.
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Op checked Satis - Anyone who claims FR do not have a low operating cost knows NOTHING about Ryanair! As a result of their low operating cost compared with their turnover THEY have over a billion Euro in the bank and will probably make 200 million Euro on the year's operation in profit. Can your beloved JET2 make a claim ANYTHING NEAR THAT???
Wake up dude!
Hehe...... just reread your post and realised how ridiculous it is you know! You must be a wind-up merchant?? Ryanair's "feeling the pinch" probably equates to:
The reduction in expected profit by FRA compared to last years would probably exceed the Value of JET2 as an airline by a factor of three. In other words Ryanair could probably buy JET2 three times over with the profit it doesn't achieve this year! Some pinch eh?
Wake up dude!
Hehe...... just reread your post and realised how ridiculous it is you know! You must be a wind-up merchant?? Ryanair's "feeling the pinch" probably equates to:
The reduction in expected profit by FRA compared to last years would probably exceed the Value of JET2 as an airline by a factor of three. In other words Ryanair could probably buy JET2 three times over with the profit it doesn't achieve this year! Some pinch eh?
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jmc-man speaks wise words and we do not always sing from the same hymn sheet!
I have predicted a bubble burst, simply due to consumer spending on credit. Disposable income during the latter part of 2004 will diminish, so will spend on leisure and business travel as interest rate increases BITE HARD.
This is why MOL and Webster are predicting tough times during winter 04-05, anyone with a brain can work that out! Telling the City early lessens the impact later.
I have predicted a bubble burst, simply due to consumer spending on credit. Disposable income during the latter part of 2004 will diminish, so will spend on leisure and business travel as interest rate increases BITE HARD.
This is why MOL and Webster are predicting tough times during winter 04-05, anyone with a brain can work that out! Telling the City early lessens the impact later.
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It is highly unlikley that Jet2 has shown any profit at all IN IT'S OWN RIGHT
"Jet2.com achieved a satisfactory load factor for the year to 31 March 2004 and made a positive contribution to Channel Express after all costs and expenses"
All the figures published show Jet2 making a contribution to the group profits
The overheads will be conveniently covered elsewhere
Accept the fact that the statement to the city is the truth. Do you really know any differently? I doubt it.
682
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Jet 2 are fortunate in that much of their head office costs are already covered by Channex (crewing, ops, accounts etc) whereas other operators have their costs showing in a more transparent manner. But then what a great way to enter the loco market with such low overheads. Aircraft are cheap, load factors are good, and as the cargo side of the business retreats (recent retirement of more F27s, extra A300 for UPS not happening, several loadmaster and pilot redundancies) then Jet 2 will eventually become the main revenue stream for Channex. More aircraft (including 737-400s?) and routes will be announced soon and possibly even a new base.
Cargo customers are crystallising into UPS and Royal Mail and Jet 2 has a lot more still to offer so look for more announcements in the not too distant future.
Cargo customers are crystallising into UPS and Royal Mail and Jet 2 has a lot more still to offer so look for more announcements in the not too distant future.
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Hey Optical
Keep your hair on,I'm sure the Tipperary cattle dealer knows what he's doing.
I'm simply making the point that in any business the larger it gets
the more difficult it is to keep costs down
Jet2.coms cost are genuinely low !
Keep your hair on,I'm sure the Tipperary cattle dealer knows what he's doing.
I'm simply making the point that in any business the larger it gets
the more difficult it is to keep costs down
Jet2.coms cost are genuinely low !
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The guys in Europe have started heading west, making it difficult for EZY/RYR to head east.
It will be difficult competing with airlines that pay an Eastern European captain half of what an F/O makes in Western Europe. Add to that the ´loose´ operating culture in Eastern Europe and the playing field is not so level anymore.
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682,
Look, I don't want to get into a battle of semantics here. My stated view is that Jet2 would not be able to stand alone. I'll stand by that statement.
I have read the Dart Group report, and it is full of interesting stuff, but the quote you elected to put in your post is hardly a "shout it from the rooftops" statement about the profitability of Jet 2. What it states is that after paying all the direct operating costs of the airline, there was something left over to contribute to Channex's overheads. It could have been £20 for all we'll know.
And that is just my point. If Jet 2 were standing alone, and covering all their own overheads rather than making a contribution to the parents, the figures would probably look distinctly worse.
And the Group statement refects the concern that the success of Jet 2 is anything but guaranteed or even expected......Look at this for a statement of "confidence"...
"Believe" and "Should" could have been replaced with "are certain" and " will", if the Chairman felt the market was genuinely growing.
And a more interesting figure is the return on Turnover which comes 3.94% ( 3.98% last year, and 4.89% the year before)
I believe Jet2 will struggle to continue to grow, but will provide a good source of cashflow to the group, which is a reasonable trade in this day and age.
I don't think anyone will be in the frame of mind to buy it out. It's far more likely that EZY and RYR will become even more agressive in their attempts to keep market share.
My humble opinion...no more.
Look, I don't want to get into a battle of semantics here. My stated view is that Jet2 would not be able to stand alone. I'll stand by that statement.
I have read the Dart Group report, and it is full of interesting stuff, but the quote you elected to put in your post is hardly a "shout it from the rooftops" statement about the profitability of Jet 2. What it states is that after paying all the direct operating costs of the airline, there was something left over to contribute to Channex's overheads. It could have been £20 for all we'll know.
And that is just my point. If Jet 2 were standing alone, and covering all their own overheads rather than making a contribution to the parents, the figures would probably look distinctly worse.
And the Group statement refects the concern that the success of Jet 2 is anything but guaranteed or even expected......Look at this for a statement of "confidence"...
However, we believe that with Channel Express’ low operating cost base and our careful aircraft acquisition policy, Jet2.com should succeed in this market.
And a more interesting figure is the return on Turnover which comes 3.94% ( 3.98% last year, and 4.89% the year before)
I believe Jet2 will struggle to continue to grow, but will provide a good source of cashflow to the group, which is a reasonable trade in this day and age.
I don't think anyone will be in the frame of mind to buy it out. It's far more likely that EZY and RYR will become even more agressive in their attempts to keep market share.
My humble opinion...no more.
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JMC – Channex and Jet2 are one and the same. Trying to argue the point that one wouldn’t exist without the other is a pointless hypothesis. And why the implication that just because Jet2 is a trading name of Channex that this somehow undermines its ability to be a success or to grow. Many of the most successful businesses in the world achieve what they do because they have mastered the art of running different brands off of a common infrastructure – described by some as the ‘one kitchen – many restaurants’ scenario. Keep everything different that your customer sees or interacts with, keep everything the same and at lowest cost where they don’t. This is exactly what Channex have done with Jet2 and rather than sniping about it, step back and recognise it is exactly the right way to run a diverse, multi-brand business.
As for your suggested re-word of the Chairman’s Statement, what a load of b@@@cks. No Chairman of any business would ever use those words in a forward looking statement to the investment community. You give an opinion on how you think trading will pan out over the next financial year and you are then obliged to provide an interim update if things are doing substantially better or worse.
Having read PM’s comments and the report myself, it sounds as if in terms of profitability and fleet size, Jet2 is performing much as they forecast it would be when the venture was first made public back in Q4 2002. In a period where others have come, gone or even failed to make it beyond the planning stage, this should be recognised as something of an achievement.
loco
As for your suggested re-word of the Chairman’s Statement, what a load of b@@@cks. No Chairman of any business would ever use those words in a forward looking statement to the investment community. You give an opinion on how you think trading will pan out over the next financial year and you are then obliged to provide an interim update if things are doing substantially better or worse.
Having read PM’s comments and the report myself, it sounds as if in terms of profitability and fleet size, Jet2 is performing much as they forecast it would be when the venture was first made public back in Q4 2002. In a period where others have come, gone or even failed to make it beyond the planning stage, this should be recognised as something of an achievement.
loco
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Returning to the topic temporarily on the views of what next for the no-frills airlines, (if the Jet2 people don't mind) I just thought I would like to share my ideas.
I don't think that we will ever only have two no-frills airlines in Europe. America has five long standing no-frills airlines (Southwest, AirTran, Spirit, Frontier, ATA [and the new JetBlue]) and all of these airlines are continuing to do well in their own respective markets. I think it will be the same in Europe, not two, but a few big no-frills airlines, instead of many with small fleets.
Also, we'll probably see the demise of airline-within-airline, low-cost brands, like we saw in the US. Airlines will instead focus on how to make their services more attractive system-wide, and the small units like MyTravelLite & Snowflake will eventually be merged back into the system.
There will be some airlines who need a no-frills subsidiary like TUI have with HLX and Lufthansa with Germanwings, but I have no idea where bmibaby, thomsonfly or jet2 are going. ThoughtS?
I don't think that we will ever only have two no-frills airlines in Europe. America has five long standing no-frills airlines (Southwest, AirTran, Spirit, Frontier, ATA [and the new JetBlue]) and all of these airlines are continuing to do well in their own respective markets. I think it will be the same in Europe, not two, but a few big no-frills airlines, instead of many with small fleets.
Also, we'll probably see the demise of airline-within-airline, low-cost brands, like we saw in the US. Airlines will instead focus on how to make their services more attractive system-wide, and the small units like MyTravelLite & Snowflake will eventually be merged back into the system.
There will be some airlines who need a no-frills subsidiary like TUI have with HLX and Lufthansa with Germanwings, but I have no idea where bmibaby, thomsonfly or jet2 are going. ThoughtS?
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Anyone know when Ryan's 732's have to go? Whatever about their UK-Europe routes, the introduction of 738's on some of the Ireland-UK routes will be interesting to watch. Unless they're totally coining it on the 732's on the likes of Newcastle, Teesside, Blackpool and Aberdeen and have enough of a margin to sustain the additional fixed and operating costs of the 738, I wonder will these routes deliver a margin to make them viable in a 738 world?
It doesn't totally pull the rug from under the FR model (which is the best of all LoCo's) but surely this must be a major concern in Ryanland and be viewed by others as an opportunity to pounce? At a minimum, some frequencies must be threatened whilst certain routes must be heading for the 'seasonal operation' bin.
It doesn't totally pull the rug from under the FR model (which is the best of all LoCo's) but surely this must be a major concern in Ryanland and be viewed by others as an opportunity to pounce? At a minimum, some frequencies must be threatened whilst certain routes must be heading for the 'seasonal operation' bin.
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Some of the things to bear in mind are;
1. There are currently 54 so-called low cost airlines in Europe.
2. Only three of them can be regarded as large airlines, Ryanair, Easyjet and Air Berlin. They have all acquired rivals. This is a process that is likely to continue.
3. All three of them appear to have very different business plans and diffferent strengths and weaknesses.
4. A major strength in Ryanair is its domination of the Irish Sea routes. The continued strength of both the British and Irish economies will be a major strength for them in any battles that are likely to start this autumn. A weakness for them is that they also serve some small and relatively unknown cities from London. They also have big aircraft.
5. The Easyjet model is substantially based on increasing market size and gaining market sahre in large cities especially London. Having small but highly efficient aircraft de-risks their operation. All their routes to popular Spanish resorts is a major strength.
6. Air Berlin has large aircraft and seems to be trying to serving two rather ddifferent market segments, namely Germany to London and Germnay to Spain. I am not clear where their Palma hub fits in.
7. All the others are vastly smaller and therefore vulnerable but some of them (German Wings for example) have powerful shareholders but whether they will support loss making activities is not known
8. A major difference between Europe and The United States is that in Europe there are the holiday airlines. Between them they operate around 650 aircrfat and the Revenue Passenger Kilometres they generate make them the dominant European airline product by far. They will fight to protect their businesses. Just look at HLX and Thonsonfly to see the stirrings in this sector.
9. London is by far the largest airline market in Europe and around 40% of all European flights involve London. This means that an opeerator based in London is likely to be able to do the most effective marketing in this huge market. An example of how not to do it in London was dba who put in so little effort that their operation was closed after a few months.
10. The next biggest market is Paris and that has the smallest number not only of LoCo flight but holiday airline flights as well. To gain strength an airline must be prepared to slug it out in that market. Easy jet is the clear leader there.
11. To work out who is likely to succeed of fail just draw up a SWOT (Strengths, Weaknesses, Opportunities., Threats) table for each. If the Weaknesses and Threats dominate then that is who is going to fail or get taken over.
12. My guess is that MyTravel will walk away from Lite as it does not fit their core business. Flybe will have to decide which business it really is in. Their route amd marketing strategies seem confused and the 146 is entirely the wrong aircraft. EUJet will find Manston to be an almost impossible marketing proposition. Their marketing profile is so far close to zero and they start operations in a couple of months time. Snowflake has no prospect of competing successfuly with Sterling European and will be abandoned. bmibaby seems to have little consistent strategy particularly on the markets that it serves. It will keep chopping and changing until it realises that to succed you have to have a clear niche or you have to be one of the big boys. The market in the Ruhr Valley is beginning to look very messy. There is bound to be some shake out there. Airlines from new EU countries will need to be exchane optimism for realism if they are going to compete with the likes of Easy jet. If Easy jet decide to operate from the UK to Poland, for example, then Wizz will start to bleed. That is a scenario that is very likely to happen.
Hope this all helps to clarify things on this topic.
1. There are currently 54 so-called low cost airlines in Europe.
2. Only three of them can be regarded as large airlines, Ryanair, Easyjet and Air Berlin. They have all acquired rivals. This is a process that is likely to continue.
3. All three of them appear to have very different business plans and diffferent strengths and weaknesses.
4. A major strength in Ryanair is its domination of the Irish Sea routes. The continued strength of both the British and Irish economies will be a major strength for them in any battles that are likely to start this autumn. A weakness for them is that they also serve some small and relatively unknown cities from London. They also have big aircraft.
5. The Easyjet model is substantially based on increasing market size and gaining market sahre in large cities especially London. Having small but highly efficient aircraft de-risks their operation. All their routes to popular Spanish resorts is a major strength.
6. Air Berlin has large aircraft and seems to be trying to serving two rather ddifferent market segments, namely Germany to London and Germnay to Spain. I am not clear where their Palma hub fits in.
7. All the others are vastly smaller and therefore vulnerable but some of them (German Wings for example) have powerful shareholders but whether they will support loss making activities is not known
8. A major difference between Europe and The United States is that in Europe there are the holiday airlines. Between them they operate around 650 aircrfat and the Revenue Passenger Kilometres they generate make them the dominant European airline product by far. They will fight to protect their businesses. Just look at HLX and Thonsonfly to see the stirrings in this sector.
9. London is by far the largest airline market in Europe and around 40% of all European flights involve London. This means that an opeerator based in London is likely to be able to do the most effective marketing in this huge market. An example of how not to do it in London was dba who put in so little effort that their operation was closed after a few months.
10. The next biggest market is Paris and that has the smallest number not only of LoCo flight but holiday airline flights as well. To gain strength an airline must be prepared to slug it out in that market. Easy jet is the clear leader there.
11. To work out who is likely to succeed of fail just draw up a SWOT (Strengths, Weaknesses, Opportunities., Threats) table for each. If the Weaknesses and Threats dominate then that is who is going to fail or get taken over.
12. My guess is that MyTravel will walk away from Lite as it does not fit their core business. Flybe will have to decide which business it really is in. Their route amd marketing strategies seem confused and the 146 is entirely the wrong aircraft. EUJet will find Manston to be an almost impossible marketing proposition. Their marketing profile is so far close to zero and they start operations in a couple of months time. Snowflake has no prospect of competing successfuly with Sterling European and will be abandoned. bmibaby seems to have little consistent strategy particularly on the markets that it serves. It will keep chopping and changing until it realises that to succed you have to have a clear niche or you have to be one of the big boys. The market in the Ruhr Valley is beginning to look very messy. There is bound to be some shake out there. Airlines from new EU countries will need to be exchane optimism for realism if they are going to compete with the likes of Easy jet. If Easy jet decide to operate from the UK to Poland, for example, then Wizz will start to bleed. That is a scenario that is very likely to happen.
Hope this all helps to clarify things on this topic.
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Flying Scotsman,
Update your facts and lose your attitude! I know 2 direct entry Captains, one of whom is joining Jet 2 imminently and the other who has been offered a job but as yet has no start date. Both of them have been told that they have to PAY for their type rating, rather than being subject to the old bonding process.
Update your facts and lose your attitude! I know 2 direct entry Captains, one of whom is joining Jet 2 imminently and the other who has been offered a job but as yet has no start date. Both of them have been told that they have to PAY for their type rating, rather than being subject to the old bonding process.
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Well, unless Jet2 are in the habit of employing liars, and I suspect these individuals are not, 2 independent sources have informed me that they will have to PAY.
I really don't give a sh*t who Scotty is. I just raised a point.
I really don't give a sh*t who Scotty is. I just raised a point.
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So who's lying, the two individuals you know or the flying scotsman. I think someone here has been misinformed about what is really going on. A far as I am aware Jet 2 do not make pilots pay for type ratings, at the moment certain airline companies could not get the staff if they did. Bonding seems a more logical way of attracting staff therefore a better way to get the staff they require. If, they have been asked to pay for a type rating then there must be something wrong. Maybe their qualifications are not up to what Jet2 require and therefore extra committment is required. I'm sure if I applied to Jet2 with my out of date 737 rating I would be accepted without having to pay for a new one.
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Well strangely enough I too have met a chap who is paying for his type rating (dont know what part jet2 have to play in the administration of this). Now if this guy dont have enough ticks in the boxes to be type-rated by Jet2, I would suggest Chuck Yeager is a student pilot.
ILS 119.5, you are dead right, there is something wrong if they have been asked to pay for their type rating. Problem is how can we buck this trend, and I dont mean just with Jet2 (that is if the truth ever surfaces). I know how I choose to fund my next Type Rating and it wont be by means of my bank manager.
Stick
ILS 119.5, you are dead right, there is something wrong if they have been asked to pay for their type rating. Problem is how can we buck this trend, and I dont mean just with Jet2 (that is if the truth ever surfaces). I know how I choose to fund my next Type Rating and it wont be by means of my bank manager.
Stick