EOS/MAX JET
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...and I would add another to Flexjet's list:
* do you have the ability to win big corporate deals?
Privatair avoids these problems by being the wet-lease provider for the big guy, so benefits from LH's or KL's or LX's FFP/network/corporate sales presence. Of course the flip side of Privatair's taking less risk is that they get less reward when things go well, but it seems like a reasonable tradeoff...
* do you have the ability to win big corporate deals?
Privatair avoids these problems by being the wet-lease provider for the big guy, so benefits from LH's or KL's or LX's FFP/network/corporate sales presence. Of course the flip side of Privatair's taking less risk is that they get less reward when things go well, but it seems like a reasonable tradeoff...
Privatair operates a completely different model from Eos for the reasons already stated.
Eos is offering nothing new just more of the same - luxury service for slightly less than the big guys but with no FFP, frequency and little service back-up. At best they will be competing with the LHR carriers for a slice of a lucrative but small market and one which is conditioned to preferring wide-bodied aircraft.
The clever guys in this game will realise that there are some cost sensitive business travellers working for corporates as well as a huge number of directors of small businesses (like myself) who would be happy to pay £800-1200 for some luxury but not £2500-3000.
We are happy to lose the FFP, the frequency and the flat-beds (after-all are you really telling me you can get a good-night's sleep on a 6hr JFK-LON sector?) in return for a lower fare.
In addition there are a growing number of affluent leisure travellers (especially in the SE) which may include those recently retired or younger folk in successful careers who may want the same.
The really savvy operator would include a premium economy class with return fares in the region of £300-600 to tap into the leisure end of the market.
This is the least risky model for a new premium service start-up and NOT what Eos is doing!
Eos is offering nothing new just more of the same - luxury service for slightly less than the big guys but with no FFP, frequency and little service back-up. At best they will be competing with the LHR carriers for a slice of a lucrative but small market and one which is conditioned to preferring wide-bodied aircraft.
The clever guys in this game will realise that there are some cost sensitive business travellers working for corporates as well as a huge number of directors of small businesses (like myself) who would be happy to pay £800-1200 for some luxury but not £2500-3000.
We are happy to lose the FFP, the frequency and the flat-beds (after-all are you really telling me you can get a good-night's sleep on a 6hr JFK-LON sector?) in return for a lower fare.
In addition there are a growing number of affluent leisure travellers (especially in the SE) which may include those recently retired or younger folk in successful careers who may want the same.
The really savvy operator would include a premium economy class with return fares in the region of £300-600 to tap into the leisure end of the market.
This is the least risky model for a new premium service start-up and NOT what Eos is doing!
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There's a far more fundamental problem with low-frequency transatlantic services. One aircraft can operate a daily rotation to the East Coast - in theory. In practice, it allows no leeway for cumulative delays, technical problems or scheduled maintenance. If you start cancelling flights for these reasons your credibility goes straight out of the window. If you provide a standby aircraft and crew, your costs go skyhigh. If you go technical at Stansted you're limited as to who can help you out with stranded passengers.
Nothing to do with high or low fares. Some of us remember People Express, whose schedule integrity transatlantic was a joke, and ultimately cost them their market.
Nothing to do with high or low fares. Some of us remember People Express, whose schedule integrity transatlantic was a joke, and ultimately cost them their market.
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Doors to Automatic
There should be a space in the market for a carrier such as Maxjet whilst the established carriers charge such astronomical fares for non-economy long haul travel.
Long haul economy has now got so bad on many carriers that the seats are physically painful to sit in for an hour, let alone 8+ hours. There are lots of affluent leisure passengers and price-sensitive business passengers who would pay a bit more to avoid this but who can't/won't pay £000s more.
Compare the fares on BA: The cheapest LHR-JFK economy fare is about £300 return; in World Traveller Plus it's about £800. For a fare 160% higher, you get about 20% more space - and absolutely nothing else. Business class starts at £2k return, 600% more than economy. These price premia do not remotely reflect the additional costs to the airline.
Premium passengers are cross-subsidising everybody else, and this creates an opportunity for new carriers. Good luck Maxjet.
In contrast I can't understand what Eos's unique selling point is. On the rare occasions my employer is willing to pay £3k for a long haul flight, I go for carriers with convenient central airports, backup if something goes wrong and an FFP...
Long haul economy has now got so bad on many carriers that the seats are physically painful to sit in for an hour, let alone 8+ hours. There are lots of affluent leisure passengers and price-sensitive business passengers who would pay a bit more to avoid this but who can't/won't pay £000s more.
Compare the fares on BA: The cheapest LHR-JFK economy fare is about £300 return; in World Traveller Plus it's about £800. For a fare 160% higher, you get about 20% more space - and absolutely nothing else. Business class starts at £2k return, 600% more than economy. These price premia do not remotely reflect the additional costs to the airline.
Premium passengers are cross-subsidising everybody else, and this creates an opportunity for new carriers. Good luck Maxjet.
In contrast I can't understand what Eos's unique selling point is. On the rare occasions my employer is willing to pay £3k for a long haul flight, I go for carriers with convenient central airports, backup if something goes wrong and an FFP...
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The bashers are out in force today!!!
EOS as u know have three aircraft so backup is more than adequate. The backup based in STN is doing quite a lot of charter work and the schedule has been adjusted from may 23rd to ensure that utilisation is maximised. This thread seems to be full of paper airline CEO's , I would hate to see any airline fail and wish these guys the best....I have flown with them and the service is outstanding.
Having worked for people express I dispute the reason for thier demise...the model as a low cost was ahead of its time...but there were hundreds of chiefs and very few indians....I think in this day and age with the technology we have it may have worked...we just wernt ready for a pay on board ticketing system...played hell with cashflow...
Give the new guys a chance!!
EOS as u know have three aircraft so backup is more than adequate. The backup based in STN is doing quite a lot of charter work and the schedule has been adjusted from may 23rd to ensure that utilisation is maximised. This thread seems to be full of paper airline CEO's , I would hate to see any airline fail and wish these guys the best....I have flown with them and the service is outstanding.
Having worked for people express I dispute the reason for thier demise...the model as a low cost was ahead of its time...but there were hundreds of chiefs and very few indians....I think in this day and age with the technology we have it may have worked...we just wernt ready for a pay on board ticketing system...played hell with cashflow...
Give the new guys a chance!!
Originally Posted by gatwicknose
The backup based in STN is doing quite a lot of charter work
I don't see any bashers. In fact by the standards of this part of PPRuNe the most recent posts have been well thought out and argued, and make a number of very pertinent points. The fact that someone is sceptical about the business plan or long term viability of EOS does not mean they wish the outfit to fail.
Originally Posted by gatwicknose
This thread seems to be full of paper airline CEO's
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Gatwicknose:
Thanks for the update on the schedule - I hadn't realised it was being changed. I note that it will then be operable with one aircraft: STN 1600-JFK 1845LT and then JFK 2015 - STN0830LT.
I have to assume that this is being done for cost-saving reasons rather than customer-preference reasons - after all, their original (existing) schedule didn't have the we've-got-to-fit-a-round-trip-on-one-aircraft constraint, so presumably that original schedule (depart STN 1810 - arr JFK 2055, and depart JFK 1905 - arrive STN 0715) was felt to have optimal timings. Indeed, back in November, here's what David Spurlock said in the schedule-change press release on the EOS website, i.e. when they changed their STN departure to 1810 (while the eastbound timings stayed as they were, with an 0715 STN arrival):
As a passenger, I can see two disadvantages to the new schedule. I can no longer work "nearly a full day" in London - I have to leave my office there two hours earlier, essentially just after lunchtime, to get the flight, and in the other direction, whereas I could previously have aimed to arrive in STN at 0715, had a quick shower, and got the limo to take me into the City for an 0900 start (as per DS quote above), that's unlikely to be feasible any more.
But (with my non-paper airline strategist hat on) I can accept that compromises have to be made, especially if the revenue is not building up as fast as hoped.
However - and here's the bit I'm curious about - EOS have three 757s, all on lease from ILFC. EOS isn't actually going to make any operational savings from this schedule change unless they are giving one aircraft back to the lessor or deploying it somewhere else. So their options are:
Oh, and one other thing: I have to echo Andy_S's comments. I've seen "bashers" on PPRUNE when a new airline appears - we all have. But there's a difference between "I think their livery sucks and they didn't give me a job and anyway they fly Boeings and I know Airbus is better so I HOPE THEY FAIL but now I have to go back to my homework"
and well-reasoned questioning of business assumptions. I'd love to see EOS succeed. I know how tough it is to launch a (non-paper) airline, having been in that position myself, and I have a lot of respect for anyone who seriously tries. But some business models and business decisions are just more questionable, and less robust, than others.
There's a big difference between wishing to see an airline fail, and expressing a (reasoned) opinion that it's in danger of failing.
I'll be happy if I'm proven wrong, but I've not seen anything yet to convince me EOS has turned the corner. Yes, they are doing something different, and deserve credit for that. Yes, they have superb customer service. Yes, they have a backup plane for schedule integrity. Yes, they're cheaper than BA's published C class fare. These are all positives. But they serve only one route. They are competing against BA's most profitable route (and probably BA's most profitable class on that route). They are buying traffic with a whole series of advance-booking offers and promotions and discounts (today, for example, there's a buy-one-get-one-free sale on the website). Their FFP is essentially a money-back offer. Their European Sales VP has left (reported in ABTN on April 4). Their load factors, based on available evidence, are building more slowly than expected.
Perhaps they'll come through this - they have reasonably deep pockets in terms of startup funding, and as I say I think their product is fantastic and I give them credit for seeking to break the mould - but I submit that the evidence is not yet on their side.
(edited to amend "very deep pockets" to "reasonably deep pockets" - I went back and looked at some of the startup press material.)
Thanks for the update on the schedule - I hadn't realised it was being changed. I note that it will then be operable with one aircraft: STN 1600-JFK 1845LT and then JFK 2015 - STN0830LT.
I have to assume that this is being done for cost-saving reasons rather than customer-preference reasons - after all, their original (existing) schedule didn't have the we've-got-to-fit-a-round-trip-on-one-aircraft constraint, so presumably that original schedule (depart STN 1810 - arr JFK 2055, and depart JFK 1905 - arrive STN 0715) was felt to have optimal timings. Indeed, back in November, here's what David Spurlock said in the schedule-change press release on the EOS website, i.e. when they changed their STN departure to 1810 (while the eastbound timings stayed as they were, with an 0715 STN arrival):
“In less than five weeks of service, the enthusiasm of our guests to Eos’ unique approach to
business travel has been nothing short of spectacular,” said David Spurlock, founder and chief
executive officer of Eos. “Our London-bound business executives have enjoyed moving
quickly through London Stansted airport, and arriving in short order to their destination in the
City by about 9 am. With our schedule change, our guests can now work nearly a full day and
arrive in New York in the early evening.”
business travel has been nothing short of spectacular,” said David Spurlock, founder and chief
executive officer of Eos. “Our London-bound business executives have enjoyed moving
quickly through London Stansted airport, and arriving in short order to their destination in the
City by about 9 am. With our schedule change, our guests can now work nearly a full day and
arrive in New York in the early evening.”
But (with my non-paper airline strategist hat on) I can accept that compromises have to be made, especially if the revenue is not building up as fast as hoped.
However - and here's the bit I'm curious about - EOS have three 757s, all on lease from ILFC. EOS isn't actually going to make any operational savings from this schedule change unless they are giving one aircraft back to the lessor or deploying it somewhere else. So their options are:
- Give the aircraft back to ILFC (unlikely to be welcomed!)
- Sublease the aircraft to someone else, to offset their fixed lease-rental costs
- Start a corporate-shuttle operation for someone
- Dedicate the aircraft to ad hoc charter, which is apparently going well
- Start a new route (although there would need to be a lead-in period)
- Start a second daily frequency (but wouldn't it make sense to do so at the same time that you're changing the schedule anyway?)
Oh, and one other thing: I have to echo Andy_S's comments. I've seen "bashers" on PPRUNE when a new airline appears - we all have. But there's a difference between "I think their livery sucks and they didn't give me a job and anyway they fly Boeings and I know Airbus is better so I HOPE THEY FAIL but now I have to go back to my homework"
and well-reasoned questioning of business assumptions. I'd love to see EOS succeed. I know how tough it is to launch a (non-paper) airline, having been in that position myself, and I have a lot of respect for anyone who seriously tries. But some business models and business decisions are just more questionable, and less robust, than others. There's a big difference between wishing to see an airline fail, and expressing a (reasoned) opinion that it's in danger of failing.
I'll be happy if I'm proven wrong, but I've not seen anything yet to convince me EOS has turned the corner. Yes, they are doing something different, and deserve credit for that. Yes, they have superb customer service. Yes, they have a backup plane for schedule integrity. Yes, they're cheaper than BA's published C class fare. These are all positives. But they serve only one route. They are competing against BA's most profitable route (and probably BA's most profitable class on that route). They are buying traffic with a whole series of advance-booking offers and promotions and discounts (today, for example, there's a buy-one-get-one-free sale on the website). Their FFP is essentially a money-back offer. Their European Sales VP has left (reported in ABTN on April 4). Their load factors, based on available evidence, are building more slowly than expected.
Perhaps they'll come through this - they have reasonably deep pockets in terms of startup funding, and as I say I think their product is fantastic and I give them credit for seeking to break the mould - but I submit that the evidence is not yet on their side.
(edited to amend "very deep pockets" to "reasonably deep pockets" - I went back and looked at some of the startup press material.)
Last edited by Cyrano; 27th Apr 2006 at 15:25.
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I have to agree with you there.
One flight a day offers zero flexibility.
I have heard however that the catering on Privatair is not full of any bright ideas or innovation.
A rep from another airline once said to me "People would rather fly in a 747 than a 757. How good does it sound when you say you flew over in a plane that many airlines use for charters?" Who agrees?
One flight a day offers zero flexibility.
I have heard however that the catering on Privatair is not full of any bright ideas or innovation.
A rep from another airline once said to me "People would rather fly in a 747 than a 757. How good does it sound when you say you flew over in a plane that many airlines use for charters?" Who agrees?
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Originally Posted by rusty_c
I have to agree with you there.
One flight a day offers zero flexibility.
I have heard however that the catering on Privatair is not full of any bright ideas or innovation.
A rep from another airline once said to me "People would rather fly in a 747 than a 757. How good does it sound when you say you flew over in a plane that many airlines use for charters?" Who agrees?
One flight a day offers zero flexibility.
I have heard however that the catering on Privatair is not full of any bright ideas or innovation.
A rep from another airline once said to me "People would rather fly in a 747 than a 757. How good does it sound when you say you flew over in a plane that many airlines use for charters?" Who agrees?
I think you're missing at least a couple of points here.
Privatair provides a service corresponding to the standard business class service of the carrier it's working for. So it's providing standard Lufthansa or KLM or Swiss catering and its cabin crew are dressed in Lufthansa or KLM or Swiss uniforms. Privatair's advantage is not that's it's delivering a super-luxury or innovative in-flight product, but rather that, by virtue of its smaller aircraft, the major carrier is able to offer business passengers a non-stop service on a route which wouldn't justify such a service in the first place with a larger plane.
And as for "how good does it sound...?" it sounds to me as though someone was smoking something, or maybe just winding you up! Have you noticed that 747s are used for charters too?
I *could* perhaps imagine a reaction among nervous flyers: "oh no, I don't want to fly a long overwater sector in a relatively small plane like that." But "I don't want to fly in that because other airlines use it for charter flights and so people will think worse of me"? Hello? 
EOS does indeed have an extremely generous frequent flyer programme. However it essentially consists of cash back. From the airline's point of view this is far more onerous than a "traditional" programme where the passenger can earn miles for future travel. In a traditional FFP the cost to the carrier of a free award ticket is the marginal cost of carrying one more passenger (because Rev Man will aim to avoid displacing a revenue passenger with an award one). Thus my 50,000 miles entitling me to a transatlantic round trip will only show up on the carrier's balance sheet as e.g. £50 (if that's the marginal cost of catering, fuel, ticket issuance, etc.). However in EOS's case, they're offering iPods, flights on other carriers, and so on, which third parties have to be paid for in cash. So yes, it's attractive for the punter, but it's a further (large) chunk off the passenger revenue, much more so than for their competitors.
Last edited by Cyrano; 27th Apr 2006 at 15:26.
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Reasoned replies all round....this is proving to be a very active and useful forum....
For everyones info..EOS have a a pretty busy programme of charter flights during may. Most of these flights will originate from STN utilising the extra aircraft that resides there from time to time. The third aircraft will serve as a backup with the fairly firm prospect of a second daily departure from september.
As for aircraft type, I dont really see the issue here...the interior of the EOS 757 provides a pretty relaxing and roomy interior similar in many ways to the upper deck of the 747-400. Both the flight deck and cabin crew are professional and vastly experienced so the aircraft type is not a stumbling block.
There are some anomolous points about EOS which are hard to understand but overall they idea is good...my only hope is that an airline that has been started "back to front" ie everything but passengers!! has the deepest pockets in upper new york state!
For everyones info..EOS have a a pretty busy programme of charter flights during may. Most of these flights will originate from STN utilising the extra aircraft that resides there from time to time. The third aircraft will serve as a backup with the fairly firm prospect of a second daily departure from september.
As for aircraft type, I dont really see the issue here...the interior of the EOS 757 provides a pretty relaxing and roomy interior similar in many ways to the upper deck of the 747-400. Both the flight deck and cabin crew are professional and vastly experienced so the aircraft type is not a stumbling block.
There are some anomolous points about EOS which are hard to understand but overall they idea is good...my only hope is that an airline that has been started "back to front" ie everything but passengers!! has the deepest pockets in upper new york state!
Too mean to buy a long personal title
Originally Posted by Doors to Automatic
Thats why they are going to be successful - none of this "we've got a flat bed and we're £50 cheaper than BA full C-class" nonsense!!
I wish them no ill, and it is always interesting to see people giving it a try. But as a matter of commercial reality, I fear that this may herald the beginning of the end.
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Eos have a seat sale promotion - begining of the end of a poorly run airline
Maxjet has a seat sale - Great airline, going to put BA out of business
I think the fact of the matter is that some people (DTA) do no want an ambitious, well run airline to succeed.
Bums on seats is all that matters to eos, once people have experienced it with perhaps a discounted fare, then they will be back time and time again. As if some people who were really in the know would tell you, people are going back to eos and use them wherever possible.
As seen on the eos website, even Fergie thinks this is the way forward!
Maxjet has a seat sale - Great airline, going to put BA out of business
I think the fact of the matter is that some people (DTA) do no want an ambitious, well run airline to succeed.
Bums on seats is all that matters to eos, once people have experienced it with perhaps a discounted fare, then they will be back time and time again. As if some people who were really in the know would tell you, people are going back to eos and use them wherever possible.
As seen on the eos website, even Fergie thinks this is the way forward!
Given that I have absolutely no association with either why would I want Maxjet to succeed and Eos to fail?
All I am pointing out is that Maxjet offers a unique proposition whilst with Eos it is just more of the same. Having a unique proposition is not a guarantee of success but it stacks the odds far more in your favour.
I also think that Maxjet could improve its model with a premium economy class.
All I am pointing out is that Maxjet offers a unique proposition whilst with Eos it is just more of the same. Having a unique proposition is not a guarantee of success but it stacks the odds far more in your favour.
I also think that Maxjet could improve its model with a premium economy class.