If there is going to be a European LF airlines "Blood Bath", who wont survive?
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If there is going to be a European LF airlines "Blood Bath", who wont survive?
If the above happens, as MOL and the "analysts" are predicitng will happen this Winter, who do you think is gonna go bust??
Viewing this list might help people see a list of so called LF Airlines.... http://www.discountairfares.com/lcosteur.htm
Viewing this list might help people see a list of so called LF Airlines.... http://www.discountairfares.com/lcosteur.htm
Still behind the curtain
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Well, it's hard to say for the others, but airBaltic, 48% owned by SAS, I would say, will tough it out despite the competition.
It already has to compete with BA on the London route, and it will have a new arrival via Ryanair in November which will be going to Stanstead instead of Heathrow, plus some darn place 120 ks outside of Frankfurt and about 130 ks north of Helsinki. The next arrival will be EasyJet (don't know exactly when) which will be going to Gatwick.
I don't know about that site calling airBaltic a low-cost airline. Like most, they advertise one price without taxes, dues, security, etc. and if you don't book way ahead of time, you end up paying only about GBP 5 less than BA.
They'll have a tough road ahead with the real low-cost airlines coming in, but I think that they will survive, since the government owns just a little more than half of it and if things really start looking bad, then they will really make it a low-cost airline. The site failed to include their direct London, Dublin and Milan routes.
It already has to compete with BA on the London route, and it will have a new arrival via Ryanair in November which will be going to Stanstead instead of Heathrow, plus some darn place 120 ks outside of Frankfurt and about 130 ks north of Helsinki. The next arrival will be EasyJet (don't know exactly when) which will be going to Gatwick.
I don't know about that site calling airBaltic a low-cost airline. Like most, they advertise one price without taxes, dues, security, etc. and if you don't book way ahead of time, you end up paying only about GBP 5 less than BA.
They'll have a tough road ahead with the real low-cost airlines coming in, but I think that they will survive, since the government owns just a little more than half of it and if things really start looking bad, then they will really make it a low-cost airline. The site failed to include their direct London, Dublin and Milan routes.
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Its the ones with poor cashflow and/or lack of cash reserves that will struggle... Ryanair + Easy should be ok on that basis. Those owned by flag-carriers may be able to survive if cash reserves are strong. As for the others... well, if they have a strong local market/niche service (eg Flybe) then they have a chance if the big boys dont muscle-in on their territory, otherwise it could be very tough. My guess is carriers in Germany, eastern Europe and Scandinavia are most at risk, together with full-fare airlines that get dragged into a routes/price battle.
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I agree that FR and EZY should weather the storm well enough. Those that might struggle may be the ones that are subsidiaries, e.g. bmibaby & My Travel Lite, particularly if the parent companies feel any financial squeezes. But that's just my own speculation.
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Here is the view of www.czechaerospace.cz:
In our recent survey of Low Cost Carriers (LCC) Brands, we rather call them Low Fare Airlines, as low cost seems negative from the consumers opinion side.
The winners in the LAA market will be those carriers that have the strongest brands, now we group those brand requirements into :
1 ability to consistently deliver on the cutomer promise
2 customer service quality
3 clarity of customer promise
4 product/service offered
5 consistency of message and brand
6 employee commitment
7 brand values
8 knowledgeable management
9 advertising/marketing
10 vision and mission
11 logo/identity
12 internal communications
13 company name
From these requirements we rated each LCC and how well they address these key requirements and our list of Low Cost Carriers that we believe will survive into 2006 and beyond in Europe are :
1 Ryanair
2 EasyJet
3 Helvetic Airlines
4 Sterling European
5 ThomsonFly
6 My Travel Lite
7 Germania Express
8 Virgin Express
9 German Wings
10 Volareweb
11 Air Berlin
12 Wizz Air
The LCC we beleive will NOT survive into 2006 as they are not in our opinion adhearing to a proper long term strategy/branding that will sustain them in the long/medium term, especially once competition heats up between LCC's, these carriers in our opinion will fail :
1) Snowlflake
2) WindJet
3) EU Jet
4) Iceland Express
5) Sky Europe
6) Fly BE
7) Norwegian
8) Air Scotland
9) Air Polonia
10) Hapag Lloyd Express
11) Smart Wings
The jury is still out on the following, as they seem to be putting their strategy/brand in order yet their future is very much dependent on what their competitors will do:
1) BMI baby
2) Jet 2
In our recent survey of Low Cost Carriers (LCC) Brands, we rather call them Low Fare Airlines, as low cost seems negative from the consumers opinion side.
The winners in the LAA market will be those carriers that have the strongest brands, now we group those brand requirements into :
1 ability to consistently deliver on the cutomer promise
2 customer service quality
3 clarity of customer promise
4 product/service offered
5 consistency of message and brand
6 employee commitment
7 brand values
8 knowledgeable management
9 advertising/marketing
10 vision and mission
11 logo/identity
12 internal communications
13 company name
From these requirements we rated each LCC and how well they address these key requirements and our list of Low Cost Carriers that we believe will survive into 2006 and beyond in Europe are :
1 Ryanair
2 EasyJet
3 Helvetic Airlines
4 Sterling European
5 ThomsonFly
6 My Travel Lite
7 Germania Express
8 Virgin Express
9 German Wings
10 Volareweb
11 Air Berlin
12 Wizz Air
The LCC we beleive will NOT survive into 2006 as they are not in our opinion adhearing to a proper long term strategy/branding that will sustain them in the long/medium term, especially once competition heats up between LCC's, these carriers in our opinion will fail :
1) Snowlflake
2) WindJet
3) EU Jet
4) Iceland Express
5) Sky Europe
6) Fly BE
7) Norwegian
8) Air Scotland
9) Air Polonia
10) Hapag Lloyd Express
11) Smart Wings
The jury is still out on the following, as they seem to be putting their strategy/brand in order yet their future is very much dependent on what their competitors will do:
1) BMI baby
2) Jet 2
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Cheer's Jetavia, interesting list you have there!
The biigest surprise to me on the list that you have mentioned of Low Cost carriers that you think wont survive, is Sky Europe and Flybe.
But obviously, you have analysed this in a far more detailed and scientific method than what I would.
The biigest surprise to me on the list that you have mentioned of Low Cost carriers that you think wont survive, is Sky Europe and Flybe.
But obviously, you have analysed this in a far more detailed and scientific method than what I would.
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I too am surprised about HLX and Thomsonfly being viewed seperately, surely it is in TUI interest to either make them both succeed or maybe merge the two at some point.
As for FlyBe they have strong support in the UK market I think they have a good chance, They have carved a niche where other airlines such as BA and maybe BMI don't want to go.
As for FlyBe they have strong support in the UK market I think they have a good chance, They have carved a niche where other airlines such as BA and maybe BMI don't want to go.
Jetavia's approach is certainly interesting, but many of his criteria, though relevant, leave room for subjective judgements.
My own subjective judgement is based on three criteria: the clarity of an airline's strategy - I feel that airlines that pick up and drop routes quickly, or carry out their strategy in a half-hearted manner are in danger; the extent and commitment of its financial security; and finally the strength and effectiveness of its total marketing strategy (including livery, identity, name and visibility).
On this basis, my survivors are ( of those with which I am familiar):
1. Ryanair
2. Easy Jet
3. Jet 2
4. Wizzair
5. Monarch Scheduled
The almost certain failures are:
1. MyTravel Lite
2. FlyBE
3. Air Polonia
4. EU Jet
The questionable ones are:
1. Volare
2. Sky Europe
3. BMI baby
4. Thomsonfly/Hapag Lloyd Express
And those about which I don't know enough are Air Berlin, Helvetica, GermanWings, Virgin Express, Sterling, Germania, and the others on Jetavia's list. It does seem inevitable though, that at least one of the German operators will fail sooner or later.
My own subjective judgement is based on three criteria: the clarity of an airline's strategy - I feel that airlines that pick up and drop routes quickly, or carry out their strategy in a half-hearted manner are in danger; the extent and commitment of its financial security; and finally the strength and effectiveness of its total marketing strategy (including livery, identity, name and visibility).
On this basis, my survivors are ( of those with which I am familiar):
1. Ryanair
2. Easy Jet
3. Jet 2
4. Wizzair
5. Monarch Scheduled
The almost certain failures are:
1. MyTravel Lite
2. FlyBE
3. Air Polonia
4. EU Jet
The questionable ones are:
1. Volare
2. Sky Europe
3. BMI baby
4. Thomsonfly/Hapag Lloyd Express
And those about which I don't know enough are Air Berlin, Helvetica, GermanWings, Virgin Express, Sterling, Germania, and the others on Jetavia's list. It does seem inevitable though, that at least one of the German operators will fail sooner or later.
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On this basis the sure survivors will be only the airlines with a stong domestic or hub market that offer cash cow routes:
1. Ryanair (routes DUB-UK or STN-Europe)
2. Easyjet (strong in UK domestic market and first choice for UK resident price sensitive).
3. AirBerlin (leader on leisure routes from Germany)
4. Monarch Scheduled (very strong brand)
5. Volareweb (large domestic operations in Italy)
6 Germanwings (dispite they are still a small carrier they are moving well in the market).
The questionable ones are:
1. FlyBe
2. BMI Baby
3. SkyEurope
4. Jet2 (too small even if they offer a good product. Their future at this stage is too connected with Big Boys strategies)
5. WizzAir and Air Polonia (east european market is not so strong to support both. I see Air Polonia in a better position mainly due to the marketing agreement with HLX and VAweb)
6. HLX and Thonsonfly
7. Norwegian
The almost certain failures are:
1. EUjet
2. Vueling
3. Helvetic
4. Smart Wings
5. Iceland Express
6. Snowflake
1. Ryanair (routes DUB-UK or STN-Europe)
2. Easyjet (strong in UK domestic market and first choice for UK resident price sensitive).
3. AirBerlin (leader on leisure routes from Germany)
4. Monarch Scheduled (very strong brand)
5. Volareweb (large domestic operations in Italy)
6 Germanwings (dispite they are still a small carrier they are moving well in the market).
The questionable ones are:
1. FlyBe
2. BMI Baby
3. SkyEurope
4. Jet2 (too small even if they offer a good product. Their future at this stage is too connected with Big Boys strategies)
5. WizzAir and Air Polonia (east european market is not so strong to support both. I see Air Polonia in a better position mainly due to the marketing agreement with HLX and VAweb)
6. HLX and Thonsonfly
7. Norwegian
The almost certain failures are:
1. EUjet
2. Vueling
3. Helvetic
4. Smart Wings
5. Iceland Express
6. Snowflake
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Jetavia's posting is very interesting. To their list of criteria I would add:
unit costs
cash management
distribution cost per passenger
load factors ( because thsese are a measure of any excess capacity on routes or in the market generally.)
Jetavia did not include Monarch but they have a very clear strategy, clear branding, competitive prices and clear product differentation. They have a limited route network but it is clearly orientated to the largest sun destinations and they have not got embrioled in Northern Europe mixed business/scheduled routes. I am certain that they will survive and expand. They are attracting a very loyal customer base.
I agree with the points made about brand confusion. Flybe has changed strategy seemingly many times andit is not clear to me where they stand. This confusion is made worse by their fleet strategy. How the 146 and Q400 can compete in the low fare markets is beyond me.
bmi baby is a very confused brand and has what appears to be an experimental route strategy.
To suggest that MyTravelLite is going to be a survivor when their parent has recently announced that they are cutting their UK aircraft fleet from 31 to 20 aircraft defies reason. Is it really likely that supporting Lite against growing competition at BHX is the best use of their seriously depleted funds and of those aircraft? Surely they will want to protect their core business of tour operating?
EU Jet will have a massive problem in competing afrom probably Britain's least known and arguably worst located airport.
unit costs
cash management
distribution cost per passenger
load factors ( because thsese are a measure of any excess capacity on routes or in the market generally.)
Jetavia did not include Monarch but they have a very clear strategy, clear branding, competitive prices and clear product differentation. They have a limited route network but it is clearly orientated to the largest sun destinations and they have not got embrioled in Northern Europe mixed business/scheduled routes. I am certain that they will survive and expand. They are attracting a very loyal customer base.
I agree with the points made about brand confusion. Flybe has changed strategy seemingly many times andit is not clear to me where they stand. This confusion is made worse by their fleet strategy. How the 146 and Q400 can compete in the low fare markets is beyond me.
bmi baby is a very confused brand and has what appears to be an experimental route strategy.
To suggest that MyTravelLite is going to be a survivor when their parent has recently announced that they are cutting their UK aircraft fleet from 31 to 20 aircraft defies reason. Is it really likely that supporting Lite against growing competition at BHX is the best use of their seriously depleted funds and of those aircraft? Surely they will want to protect their core business of tour operating?
EU Jet will have a massive problem in competing afrom probably Britain's least known and arguably worst located airport.
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I agree. There is no way Flybe will survive. They have no direction and to think a Dash 8 is the answer to there problems they are grossly mislead. I don't think they will go to the wall, they probably will be bought out by a non UK carrier. In a statement from the board they said that a new jet was out of the question, so it looks like its an all prop operation for the forseable future.
As for BMI baby they aint going to survive either. Yes they have a mega rich owner but just like flybe there is a limit to how much money they are prepared to put in. Again I think they will be bought out, probably by Ryan Air.
Easy are not as secure some make out. There value is a quarter of what it was and many of there routes are running at a loss. The only thing keeping them afloat is there expansion. Stop that and thats curtains for them.
How about a moderator organising a vote??
As for BMI baby they aint going to survive either. Yes they have a mega rich owner but just like flybe there is a limit to how much money they are prepared to put in. Again I think they will be bought out, probably by Ryan Air.
Easy are not as secure some make out. There value is a quarter of what it was and many of there routes are running at a loss. The only thing keeping them afloat is there expansion. Stop that and thats curtains for them.
How about a moderator organising a vote??
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Barbara,
I recall that a couple of weeks ago you were convinced that flyBE and bmibaby were going to merge, so I gather you've changed your mind.
Are you familiar with Dash 8 operating economics? I have to say that for short routes like Birmingham to Scotland, the Dash 8 (especially with the deal flyBE got from Bombardier on their initial crop of them) is probably better than any competing aircraft, including the 737. The fact that no-one else is operating the aircraft in the UK market means that flyBE if they choose can go after routes that are too thin to justify a daily 150-seater.
The international routes are where things are a bit tougher for flyBE. They're carving out a little niche on regional UK to regional France, but their Avro RJs/146s are not well so suited to the long sectors down to the south of Spain (range and speed). Then again, I wouldn't rule the type out completely - the operating cost position also depends on what kind of lease rentals they've got them on.
C.
I recall that a couple of weeks ago you were convinced that flyBE and bmibaby were going to merge, so I gather you've changed your mind.
Are you familiar with Dash 8 operating economics? I have to say that for short routes like Birmingham to Scotland, the Dash 8 (especially with the deal flyBE got from Bombardier on their initial crop of them) is probably better than any competing aircraft, including the 737. The fact that no-one else is operating the aircraft in the UK market means that flyBE if they choose can go after routes that are too thin to justify a daily 150-seater.
The international routes are where things are a bit tougher for flyBE. They're carving out a little niche on regional UK to regional France, but their Avro RJs/146s are not well so suited to the long sectors down to the south of Spain (range and speed). Then again, I wouldn't rule the type out completely - the operating cost position also depends on what kind of lease rentals they've got them on.
C.
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Seems as though these are more likely to be "wish lists" rather than predictions - strange that both Easyjet and Ryanair are predicted to survive yet both have issued profit warnings in the past six months!
It matters little how big the bubble is, it can still burst! The bigger they get, the more unwieldy they can become and the harder they will fall!
It matters little how big the bubble is, it can still burst! The bigger they get, the more unwieldy they can become and the harder they will fall!
Last edited by ALLMCC; 24th Aug 2004 at 15:55.
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prob30
you are wrong about the £2.50 from the drinks machine being available , that cash was short term working capital injection from the trustees and will be sent to JER very shortly (along with the money for the LHR slots)
NF
you are wrong about the £2.50 from the drinks machine being available , that cash was short term working capital injection from the trustees and will be sent to JER very shortly (along with the money for the LHR slots)
NF
....and since when have BE had any Avro's Cyrano?
Most of their 146's are quite early models AFAIK (with the possible exclusion of the ex-Thai 300's).
If performance at SOU is anything to go by (now their largest hub I guess), they seem to have carved out that niche pretty well and are going for the BACX jugular by launching GLA and MAN soon.
Most of their 146's are quite early models AFAIK (with the possible exclusion of the ex-Thai 300's).
If performance at SOU is anything to go by (now their largest hub I guess), they seem to have carved out that niche pretty well and are going for the BACX jugular by launching GLA and MAN soon.