ISLE OF MAN
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Any rumblings on the rock as a result of today's news that Flybe is apparently putting all its LGW slots on the market in exchange for 20m GBP? I suspect that the prospect of this happening must have caused some serious gasping on the airport's executive floor....
Realistically, by LCC standards the route with its 120.000 annual pax would be struggling to justify three daily A319 flights by easyjet who are the only airline that could come to the rescue for IOM. So I guess we would be looking at a morning and an evening departure plus a couple of weekly noon-time depatures thrown in.
Realistically, by LCC standards the route with its 120.000 annual pax would be struggling to justify three daily A319 flights by easyjet who are the only airline that could come to the rescue for IOM. So I guess we would be looking at a morning and an evening departure plus a couple of weekly noon-time depatures thrown in.
Hansol - in the case where there is only 1 credible buyer for slots, it's possible to play a waiting game. When there are 2 or more rival credible buyers for the slots, the strategy of playing a waiting game becomes more risky, particularly when the slots are in high demand and supply is relatively low.
You might wish to take a look at page 11 of this report from ACL to get an idea of general slot scarcity.
http://www.acl-uk.org/UserFiles/File...n%20Report.pdf
At Gatwick, there are at least 3 airlines that would be interested in a large number of slots and several other airlines that might be interested in a few slots. We thus have a competitive auction for one of the assets of a struggling company without taking on any of the undesired liabilities. If Easyjet (for example) were to just wait, there is a plausible chance that IAG or Ryanair would make a bid for Flybe's slots instead.
You might wish to take a look at page 11 of this report from ACL to get an idea of general slot scarcity.
http://www.acl-uk.org/UserFiles/File...n%20Report.pdf
At Gatwick, there are at least 3 airlines that would be interested in a large number of slots and several other airlines that might be interested in a few slots. We thus have a competitive auction for one of the assets of a struggling company without taking on any of the undesired liabilities. If Easyjet (for example) were to just wait, there is a plausible chance that IAG or Ryanair would make a bid for Flybe's slots instead.
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All valid points, however if Flybe were trying to sell their slots I imagine the stock market would react adversely, so it would be a difficult strategy for them. Recent experience suggests that there is no pent up demand for Gatwick slots.
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In response to VB's original question at #2443, the local hacks here don't seem to have picked up on this at all, so no informed or official comment so far.
One way or another, something had to give on IOM-LGW since easyJet muscled into FlyBe's 'territory' last year and I suspect that a total FlyBe surrender at LGW will get the IOM Airport Management off the hook, compared with a scenario where IOM-LGW is canned by FlyBe in isolation.
However, if those LGW slots do go, then it may be a catalyst for the end of the IOM base. With no LGW, or a credible London market replacement, the scale of the FlyBe's IOM base would reduce to the point where they might call it a day on LPL too, and run MAN from the other end. SOU, LTN and BRS are just marginal cost fillers, which would likely disappear too.
So quite scary prospects both for employees, and for regular travellers who have become used to choice and some of the cheapest fares the IOM has ever seen.
One way or another, something had to give on IOM-LGW since easyJet muscled into FlyBe's 'territory' last year and I suspect that a total FlyBe surrender at LGW will get the IOM Airport Management off the hook, compared with a scenario where IOM-LGW is canned by FlyBe in isolation.
However, if those LGW slots do go, then it may be a catalyst for the end of the IOM base. With no LGW, or a credible London market replacement, the scale of the FlyBe's IOM base would reduce to the point where they might call it a day on LPL too, and run MAN from the other end. SOU, LTN and BRS are just marginal cost fillers, which would likely disappear too.
So quite scary prospects both for employees, and for regular travellers who have become used to choice and some of the cheapest fares the IOM has ever seen.
Last edited by Tonyq; 13th May 2013 at 11:16.
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Flybe share price up by 15% today - so the market seems to view the possible sale of some or all of the LGW slots as positive. Note that Flybe have said some OR all.
As has been mentioned previously, should Flybe withdraw from the IOM - LGW service, the IOM Government's Open Skies Policy will have failed in its attempt to promote a 'frequent and reliable' air service. The IOM passenger market is finite, and there will not be enough business to support more than two 158 seat A319 LGW rotations per day. A 50 % reduction in the previous frequency.
As has been mentioned previously, should Flybe withdraw from the IOM - LGW service, the IOM Government's Open Skies Policy will have failed in its attempt to promote a 'frequent and reliable' air service. The IOM passenger market is finite, and there will not be enough business to support more than two 158 seat A319 LGW rotations per day. A 50 % reduction in the previous frequency.
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So, maybe the brave new world on London-IOM could look something like this:-
BA IOM-LCY x 3 with E175, to properly service the business traffic, with early/late departures, at appropriate fares
EZY IOM-LGW x 2 with A319 but no early departure ex-IOM or late ex-LGW - LCC model
BE IOM-LTN/SEN/STN x 1 or 2 off peak, using a/c based elsewhere
Long haul or European connecting traffic steered via MAN or DUB...........
As a totally off the wall idea, what is the likelihood of EZY being interested in buying BE and turning it into 'easyLite' and using all those forthcoming E175's to service lighter routes, with the EZY model?
BA IOM-LCY x 3 with E175, to properly service the business traffic, with early/late departures, at appropriate fares
EZY IOM-LGW x 2 with A319 but no early departure ex-IOM or late ex-LGW - LCC model
BE IOM-LTN/SEN/STN x 1 or 2 off peak, using a/c based elsewhere
Long haul or European connecting traffic steered via MAN or DUB...........
As a totally off the wall idea, what is the likelihood of EZY being interested in buying BE and turning it into 'easyLite' and using all those forthcoming E175's to service lighter routes, with the EZY model?
Last edited by Tonyq; 13th May 2013 at 12:41.
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BE do not have aircraft based at STN, SEN or LTN, so I do not see how this could work unless they find some other work for an aircraft based there (e.g. 3x daily LTN-NQY + 1x daily LTN-IOM)
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I know that. The comment was based on the presumption that BE would work them from, say, JER, as happens in reverse at the moment, or from MAN. i.e. MAN-IOM-SEN-IOM-MAN etc.
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While people are bouncing ideas around, there is a possibility that BE will agree to sell a number of slots to EZY on the condition that they leave certain routes to Flybe. There is no confirmation of how many slots Flybe want to dispose of at LGW - the figure of 25 pairs is how many they currently have, not necessarily how many are for sale.
It would of course depend on whether Flybe see potential to make money on the route(s) in question and whether EZY are happy to give up one or two rather minor markets to secure a significant number of new slots.
I can just about see a deal where EZY leave the LGW-IOM (and maybe LGW-INV) route for example and Flybe continue it as they did/do. It would of course be at the expense of other LGW routes...
Pure speculation on my part. I honestly can't decide in my head what I think they will do.
It would of course depend on whether Flybe see potential to make money on the route(s) in question and whether EZY are happy to give up one or two rather minor markets to secure a significant number of new slots.
I can just about see a deal where EZY leave the LGW-IOM (and maybe LGW-INV) route for example and Flybe continue it as they did/do. It would of course be at the expense of other LGW routes...
Pure speculation on my part. I honestly can't decide in my head what I think they will do.
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While people are bouncing ideas around, there is a possibility that BE will agree to sell a number of slots to EZY on the condition that they leave certain routes to Flybe.
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Wondered about the legality of it with regard to competition laws.
Perhaps while getting coffee from the vending machine Mr EZY will casually mention to Mr BE that they plan to drop certain routes if the deal is successful to free up aircraft for the new slots.
Nudge nudge, wink wink.
I may be a bit cynical, but I would think smelly little deals are often done in cases like this. Or maybe I just watch too many conspiracy films....
Perhaps while getting coffee from the vending machine Mr EZY will casually mention to Mr BE that they plan to drop certain routes if the deal is successful to free up aircraft for the new slots.
Nudge nudge, wink wink.
I may be a bit cynical, but I would think smelly little deals are often done in cases like this. Or maybe I just watch too many conspiracy films....
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@ LFC84 - possibly because the competition on the LGW route has reduced Flybe's revenues on it to a point where it cannot cover the additional cost of operating there. The slots are not being sold as a job lot necessarily, and I would have thought it unlikely that any route that was turning a decent profit would have its slots sold.
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Don't forget who is Flybe's 20% shareholder. The 3 way dirty deal has been done. Flybe exit Lgw and get the £20m they need. Ezy get the slots they want and lay off flybe.
Flybe takes over Ba s slots to Lcy and starts Gsy Lcy in readiness to take over bacityflyer. 
Ba puts Lcy into friendly hands so they can focus on fortress Lhr
IoM gets 
stuffed
Flybe takes over Ba s slots to Lcy and starts Gsy Lcy in readiness to take over bacityflyer. Ba puts Lcy into friendly hands so they can focus on fortress Lhr IoM gets stuffed
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Easyjet submission to Tynwald on IOM expansion plans
Q213. Mr Butt: What are your plans for the future in the Isle of Man? Are you still looking at the market to see whether you expand or not?
Miss Gayward: As I say, our strategy is to join the dots. So we would be keen and always looking at new opportunities, and because our Liverpool route has performed very satisfactorily and we are very pleased with the way that Gatwick is performing, we are constantly looking at new opportunities. I cannot say that there is anything that we are able to announce today because we are just not in that position, but we are looking at other opportunities.
Miss Gayward: As I say, our strategy is to join the dots. So we would be keen and always looking at new opportunities, and because our Liverpool route has performed very satisfactorily and we are very pleased with the way that Gatwick is performing, we are constantly looking at new opportunities. I cannot say that there is anything that we are able to announce today because we are just not in that position, but we are looking at other opportunities.