If there is going to be a European LF airlines "Blood Bath", who wont survive?
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very true. I wasnt suggesting Flybe are looking to take on Easy which wouldnt be the wisest move, I was just suggesting that Flybe are holding their own.
What has always suprised me is that Ryanair have not decided to introduce more routes from bristol other than there Dub service 3 times a day which is often full, especially after Ba stopped the service and Ei put on a once a day service.
What has always suprised me is that Ryanair have not decided to introduce more routes from bristol other than there Dub service 3 times a day which is often full, especially after Ba stopped the service and Ei put on a once a day service.
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terrier
I must admit that I misread your earlier post as saying that easyJet's BRS presence was the largest in Britain outside London, and I believe that fimbles is suggesting that LPL is.
As you know BRS has 6 based easy a/c and I believe that LPL has 7 or 8. However, this is only part of the picture because a glance at the easyJet web timetable shows LPL as having 13 destinations and BRS 20, but some of LPL's routes are higher frequency than BRS. Even this has to be broken down because BIO and CPH are to be discontinued from BRS in the winter and MAD, BUD, CIA and GVA will replace them, giving BRS 18 winter destinations.
Furthermore, 7 of BRS's weekdaily return services are operated by easy a/c based elswhere, viz BFS x 3, NCL x 3 and SXF x 1 which is the equivalent of two based a/c.
So whether BRS or LPL is 'larger' depends on what criteria are being used.
As for Ryanair I will not be surprised if the three daily rotations are reduced to two when the 738s replace the 732s.
The overall subject of this thread will doubtless have even more of a bearing on future plans than might otherwise have been the case.
I must admit that I misread your earlier post as saying that easyJet's BRS presence was the largest in Britain outside London, and I believe that fimbles is suggesting that LPL is.
As you know BRS has 6 based easy a/c and I believe that LPL has 7 or 8. However, this is only part of the picture because a glance at the easyJet web timetable shows LPL as having 13 destinations and BRS 20, but some of LPL's routes are higher frequency than BRS. Even this has to be broken down because BIO and CPH are to be discontinued from BRS in the winter and MAD, BUD, CIA and GVA will replace them, giving BRS 18 winter destinations.
Furthermore, 7 of BRS's weekdaily return services are operated by easy a/c based elswhere, viz BFS x 3, NCL x 3 and SXF x 1 which is the equivalent of two based a/c.
So whether BRS or LPL is 'larger' depends on what criteria are being used.
As for Ryanair I will not be surprised if the three daily rotations are reduced to two when the 738s replace the 732s.
The overall subject of this thread will doubtless have even more of a bearing on future plans than might otherwise have been the case.
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How can EASYJET and RYANAIR people be so sure that the money in the bank will be used to support the company's operations ?
Just remember SWISSAIR and all parent companies
Just remember SWISSAIR and all parent companies
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Trislander
An interesting thought
- but the problem is that it won't be up to flybe in the main to decide who they compete against. If the second home owners in the South West suddenly find themselves with the choice of flybe and easy/Ryan (who may well start looking for more and more "odd" city pairs as the market starts to saturate), flybe could be in trouble. If the likes of EZY appear at EXT, doing TLS, flybe will just HAVE to compete - whether they want to or not - or just surrender the route....
TA
An interesting thought
What many people fail to realise (including the so-called "expert" analysists on this thread) is that flybe aren't trying to compete with the likes of easy-ryan.
TA
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Several of the postings in this thread have referred to cash and the cash piles of EZY and RYR. British readers will know of a company that used to be called GEC and which was run by Lord Weinstock. That company had a cash mountain of around £1billion for a decade or more. In their case that cash was surplus to investment requirements and was not needed for working capital. It was genuinely there on top of all business needs. Cash of that sort can genuinley be classed as an asset.
In the case of EZY and RYR and any similar airlines the cash is mainly derived from advanced ticket payments. As such it is a liability until the relevant flight has been flown. It includes advance payments for taxes which have to be paid after the flight has been flown.
That cash has to be used for progress payments on aircraft, leases, etc.
If you look at the cash in relation to capital spending committments you will see that it is small. It will certainly be enough cash to ride out any short term problems but you have to look at the wider picture.
At the moment both airlines are growing far faster than average industry growth over any period in the last 50 years but itf that growth falters or stops then that cash will rapidly dissipate unless they abandon their growth plans. It was always thus in the airline business and I submit that it will always be thus. It was mathematically proved by an academic study called Simplistic Airways in the early 1970's
You can certainly say that EZY and RYR would enter any downturn period in a position of strength and that certainly means that they would outlast weaker competitors.
In the case of EZY and RYR and any similar airlines the cash is mainly derived from advanced ticket payments. As such it is a liability until the relevant flight has been flown. It includes advance payments for taxes which have to be paid after the flight has been flown.
That cash has to be used for progress payments on aircraft, leases, etc.
If you look at the cash in relation to capital spending committments you will see that it is small. It will certainly be enough cash to ride out any short term problems but you have to look at the wider picture.
At the moment both airlines are growing far faster than average industry growth over any period in the last 50 years but itf that growth falters or stops then that cash will rapidly dissipate unless they abandon their growth plans. It was always thus in the airline business and I submit that it will always be thus. It was mathematically proved by an academic study called Simplistic Airways in the early 1970's
You can certainly say that EZY and RYR would enter any downturn period in a position of strength and that certainly means that they would outlast weaker competitors.
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Flybe's strategy re the smaller airports/secondary routes is well thought in my view.
For example, from EXT they fly to the sun spots of Malaga and Alicante using smaller aircraft (146s) than the normal low cost airlines' 737s/319s. They probably recognise that a 737 would be difficult to fill on these routes using the same schedules as the 146, although the loads so far appear to suggest that larger aircraft might be viable to these particular destinations from EXT.
Flybe also fly from EXT to such as EDI, GLA, DUB and BHD but not at the frequency that more traditional lowcost airlines do from larger airports(Flybe is usually once a day).
Flybe also recognise that there is a market in the south west for the likes of Toulouse, Bergerac and Bordeaux. However, they realise that EXT would probably not have enough pax in its catchment area so Flybe operate these destinations for south west pax from BRS instead. Even here a 737/319 would probably be too big so they utilise 146s and DH 8-400s for daily flights and loads (according to CAA) average 75-85%.
I cannot see easy or Ryanair trying to oust Flybe at BRS on TLS, EGC or BOD. There just would not be enough passengers to fill the daily flights at economic yields. After all easy have decided to withdraw the Bristol-Bilbao service from October yet this route carried 7816 pax in July (CAA provisional figures), an average load of 126 (85%), so presumably they can make more money on other routes. Would they get these kind of loads on daily TLS, EGC or BOD? I doubt it.
I think Flybe have a well thought out strategy. In addition to EXT and BRS, look at the burgeoning services from SOU where traditional sun routes and 'secondary routes' are both flown. I suppose easy or Ryan might look at SOU for sun routes although technical experts might tell me that the runway could be a problem in some conditions for 737s
If the likes of EZY appear at EXT, doing TLS, flybe will just HAVE to compete - whether they want to or not - or just surrender the route....
For example, from EXT they fly to the sun spots of Malaga and Alicante using smaller aircraft (146s) than the normal low cost airlines' 737s/319s. They probably recognise that a 737 would be difficult to fill on these routes using the same schedules as the 146, although the loads so far appear to suggest that larger aircraft might be viable to these particular destinations from EXT.
Flybe also fly from EXT to such as EDI, GLA, DUB and BHD but not at the frequency that more traditional lowcost airlines do from larger airports(Flybe is usually once a day).
Flybe also recognise that there is a market in the south west for the likes of Toulouse, Bergerac and Bordeaux. However, they realise that EXT would probably not have enough pax in its catchment area so Flybe operate these destinations for south west pax from BRS instead. Even here a 737/319 would probably be too big so they utilise 146s and DH 8-400s for daily flights and loads (according to CAA) average 75-85%.
I cannot see easy or Ryanair trying to oust Flybe at BRS on TLS, EGC or BOD. There just would not be enough passengers to fill the daily flights at economic yields. After all easy have decided to withdraw the Bristol-Bilbao service from October yet this route carried 7816 pax in July (CAA provisional figures), an average load of 126 (85%), so presumably they can make more money on other routes. Would they get these kind of loads on daily TLS, EGC or BOD? I doubt it.
I think Flybe have a well thought out strategy. In addition to EXT and BRS, look at the burgeoning services from SOU where traditional sun routes and 'secondary routes' are both flown. I suppose easy or Ryan might look at SOU for sun routes although technical experts might tell me that the runway could be a problem in some conditions for 737s
Last edited by MerchantVenturer; 30th Aug 2004 at 10:27.
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Old business saying "all markets go to three"
Old business saying "all markets eventually go to three"... which means upto 3 airlines on each European short-haul route.
Firstly, several of W Europe's incumbents will have to give up short-haul (SN/AerLingus/Swiss/Alitalia/AF). The money has to stop flowing to these loss makers, eventually.
Meanwhile, Easy and Ryanair (probably plus maybe one other) will eventually buy out their more successful competitors. Some targets will get reasonable prices, other will go for peanuts. But Easy+Ryanair (+1 other?) must ultimately end up at least as big as, or even bigger than, the old incumbents. Buzz and Go are early examples, but I suspect there are plenty more to come (particularly on the continent).
This also means most of the other small competitors will simply disappear, or remain very niche... Exciting times. Roll on the Ryan and Easy hoovers.
Ryanair to buy AirBerlin
>>---->
Firstly, several of W Europe's incumbents will have to give up short-haul (SN/AerLingus/Swiss/Alitalia/AF). The money has to stop flowing to these loss makers, eventually.
Meanwhile, Easy and Ryanair (probably plus maybe one other) will eventually buy out their more successful competitors. Some targets will get reasonable prices, other will go for peanuts. But Easy+Ryanair (+1 other?) must ultimately end up at least as big as, or even bigger than, the old incumbents. Buzz and Go are early examples, but I suspect there are plenty more to come (particularly on the continent).
This also means most of the other small competitors will simply disappear, or remain very niche... Exciting times. Roll on the Ryan and Easy hoovers.
Ryanair to buy AirBerlin
>>---->
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Any runway can be limiting in certain conditions. In fact the 146 is limiting at SOU. Why do you think Flybe operate a 200 series out of there? There is no problems worth talking about with regards to a 737, Airbus or 757. How much runway do you want? I think you will find the problem is parking space. Back to the original thread now..... Further to the latest board meeting at Flybe the company will be sold as an all Dash 8 fleet. The first of the 146's are being returned at the end of the summer. That is fact. It is on the aircraft rotation plan for October. As for the Q400, one was stuck in Reykjavik day before yesterday tech! They are the future!
Brunel to Concorde
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Barbara Cassani
Thanks for that about SOU. The only reason I mentioned the runway was because I have read in other threads that it can be a limiting factor. I am grateful for your clarification.
I also read with interest your comments about Flybe's recent board meeting.
Thanks for that about SOU. The only reason I mentioned the runway was because I have read in other threads that it can be a limiting factor. I am grateful for your clarification.
I also read with interest your comments about Flybe's recent board meeting.
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Thanks Barbara. It would certainly make sense for Flybe to be an all Q400 operator especially if it cannot afford a replacement jet for the outdated and old 146's. But that also means that is will be limited to short range routes. The likes of SOU-PRG and SOU-AGP will have to be scrapped.
But it all adds up to yet another strategy change for the company. It will have gone from Jersey European (dominated by Channel Islands business) to British European (intended to specialise in markets with strong financial services traffic) to Flybe ( a look alike low fare airline with the wrong aircraft for that role) to whatever as a specialist Q400 operator. And that all within five years. Incredible except that it has happened. To me it suggests that the company has been losing money heavily as Flybe and is being forced to retrench into some new core markets.
But it all adds up to yet another strategy change for the company. It will have gone from Jersey European (dominated by Channel Islands business) to British European (intended to specialise in markets with strong financial services traffic) to Flybe ( a look alike low fare airline with the wrong aircraft for that role) to whatever as a specialist Q400 operator. And that all within five years. Incredible except that it has happened. To me it suggests that the company has been losing money heavily as Flybe and is being forced to retrench into some new core markets.
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Barbara Cassani,
----------------------
How do you know what flybe say in their board meetings unless you are in some way associated with the airline
Colegate,
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The Q400 is being brought in to replace some of the routes currently operated by the older 146's which would make more money for the company than running the 146 on those routes. The Q400 can do and has done SOU-PRG, but it would take just 10-15 mins longer than the 146.
They make too much money out of the Spanish routes to drop them. They are retaining a smaller number of 146's to operate these routes until an alternative jet is implemented. Don't you think that the company has thought all this through?!
Twin aisle,
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Point taken but I have to agree with Merchant Venturer that there is a demand for the routes flybe operate on, hence high pax loads - but not enough for 150 seat operators to make enough money out of. That's why flybe use smaller a/c on these routes such as the Q400 which is highly economical and brings in the £££'s, on a totally different scale to easy-ryan but then it is a smaller company.
The likes of easy-ryan do not have the equipment to compete!
Tri
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How do you know what flybe say in their board meetings unless you are in some way associated with the airline
Colegate,
------------
The Q400 is being brought in to replace some of the routes currently operated by the older 146's which would make more money for the company than running the 146 on those routes. The Q400 can do and has done SOU-PRG, but it would take just 10-15 mins longer than the 146.
They make too much money out of the Spanish routes to drop them. They are retaining a smaller number of 146's to operate these routes until an alternative jet is implemented. Don't you think that the company has thought all this through?!
Twin aisle,
-------------
Point taken but I have to agree with Merchant Venturer that there is a demand for the routes flybe operate on, hence high pax loads - but not enough for 150 seat operators to make enough money out of. That's why flybe use smaller a/c on these routes such as the Q400 which is highly economical and brings in the £££'s, on a totally different scale to easy-ryan but then it is a smaller company.
The likes of easy-ryan do not have the equipment to compete!
Tri
Last edited by Trislander; 31st Aug 2004 at 12:11.
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As a founder of one of Europe's largest budget airlines directories (low-costs, charters, etc.), I found this discussion really interesting. In my opinion, flyBE is nowhere near bankruptcy. These guys are innovative and flexible and have been changing their marketing strategy with time. They might eventually remove themselves from the low cost market, but they'll just move into something else.
Martino
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What an interesting thread this is turning into!
Just to clarify a few thoughts tho.... I don't think I, or indeed anyone else, implied that flybe were on the brink of death. They seem to be, as stated, a well run, niche operator, flying some interesting, and seemingly viable, routes.
My point still remains tho.
The two largest players in the market (RYR and EZY) are piling on capacity like there is no tomorrow. They have to find somewhere to fly these seats;
There are only so many "rich" city pairs in the UK and Europe. As I said, some of these pairs looked odd when they started, but they are doing very well; however, there actually is a finite number of both viable city pairs and pax;
If you are building capacity and are maxed out on your existing city pairs (can you really see bmibaby doing a FOURTH daily rotation CWL-EDI for example?) - then you will have to start looking around for other city pairs - and if you find a pair which is lowish capacity, and you can undercut on price, it will be VERY tempting. Into this bracket has to go the routes of:
1. flybe
2. Air SouthWest
3. Air Wales
4. Eastern
5. well - you get the gist
No-one is singling out flybe, I don't think. It's just that they are big, expanding, high-profile, and, like it or not, liable to be squeezed by the ambitious growth plans of some of the other lo-cos.
Beware looking solely at loads, people..... load is almost irrelevant compared to total revenue and yield! Yes, flybe may be at 80% on a 146 to ALC, which translates as perhaps 50% ona 737.... but if the opcosts of the 737 are lower per ASK, then you may find that running the 737 makes more sense, even with the same number of pax!
TA
Just to clarify a few thoughts tho.... I don't think I, or indeed anyone else, implied that flybe were on the brink of death. They seem to be, as stated, a well run, niche operator, flying some interesting, and seemingly viable, routes.
My point still remains tho.
The two largest players in the market (RYR and EZY) are piling on capacity like there is no tomorrow. They have to find somewhere to fly these seats;
There are only so many "rich" city pairs in the UK and Europe. As I said, some of these pairs looked odd when they started, but they are doing very well; however, there actually is a finite number of both viable city pairs and pax;
If you are building capacity and are maxed out on your existing city pairs (can you really see bmibaby doing a FOURTH daily rotation CWL-EDI for example?) - then you will have to start looking around for other city pairs - and if you find a pair which is lowish capacity, and you can undercut on price, it will be VERY tempting. Into this bracket has to go the routes of:
1. flybe
2. Air SouthWest
3. Air Wales
4. Eastern
5. well - you get the gist
No-one is singling out flybe, I don't think. It's just that they are big, expanding, high-profile, and, like it or not, liable to be squeezed by the ambitious growth plans of some of the other lo-cos.
Beware looking solely at loads, people..... load is almost irrelevant compared to total revenue and yield! Yes, flybe may be at 80% on a 146 to ALC, which translates as perhaps 50% ona 737.... but if the opcosts of the 737 are lower per ASK, then you may find that running the 737 makes more sense, even with the same number of pax!
TA
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"... liable to be squeezed by the ambitious growth plans of some of the other lo-cos" ... or "eaten by", as was the case with Go and Buzz!
Martino
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Martino
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Martino has a point, that I confess to have omitted...!!
Having said that, easy still seems to have indigestion from Go, and Ryan is still (I think) in court over some aspects of its Buzz buy.... would they want to do THAT again, especially with an airline with a strong brand identity and culture as flybe?
TA
Having said that, easy still seems to have indigestion from Go, and Ryan is still (I think) in court over some aspects of its Buzz buy.... would they want to do THAT again, especially with an airline with a strong brand identity and culture as flybe?
TA
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EZY or RYR might not be ready for another big takeover, but some of the other European low-costs might see it as an excellent opportunity to expand into the UK (+ France) market. Air Berlin seems to have an eye out on expansion.
Martino
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Martino
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Are we forgetting the size of the European market when we talk about saturation? Look how Air France still dominate French domestic routes and see the possibilities there if their stranglehold on CDG & ORY slots can ever be broken.
OK, so Flybe have very limited exposure to operating routes outside the UK, but the economics of a machine like the Q400 opens up many city pairs which a 737 is too big for. If the "rich" city pairs are for argument's sake cities with populations of 1m+, and the "niche" pairs are cities with popluation of less than 1m, then there are always going to be many more niches than rich pairs.
Looking at the UK, most cities in England seem well served relative to their populations, except perhaps Norwich? In Scotland, BAA's handling fees seem to be an obstacle to further growth of routes to mainland Europe, whereas the network of routes from Belfast is at last starting to expand without having to go through London first.
Think of other European cities outside the major capitals and tourist resorts - there still seems to be plenty of opportunity out there.
OK, so Flybe have very limited exposure to operating routes outside the UK, but the economics of a machine like the Q400 opens up many city pairs which a 737 is too big for. If the "rich" city pairs are for argument's sake cities with populations of 1m+, and the "niche" pairs are cities with popluation of less than 1m, then there are always going to be many more niches than rich pairs.
Looking at the UK, most cities in England seem well served relative to their populations, except perhaps Norwich? In Scotland, BAA's handling fees seem to be an obstacle to further growth of routes to mainland Europe, whereas the network of routes from Belfast is at last starting to expand without having to go through London first.
Think of other European cities outside the major capitals and tourist resorts - there still seems to be plenty of opportunity out there.