ScotAirways
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Be ready with your facts before you write a company off into insolvency
I just pointed out what was in the newspaper, so its in the public domain that they owe a large sum of money.
Not a loco by any means.
There are other types of airlines other than "loco" you know....And judging by your contributions to other threads (the yogi thread for example), I do not think you quite grasp the economics of the airline industry....
Last edited by Meeb; 19th Nov 2006 at 13:51.
niknak
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I don't know what they owe, or to who, but their aircraft are rarely on the ground long enough to refuel, never mind to get a bit of spit and polish.
A collegue who is closely aquainted to them tells me that they do have debt, but it's all within the terms of the business plan and they appear to be far more stable than some other operators.
One thing is for sure, the Suckling family are as equally canny as MR Souter, and if he wanted his money back from this deal outwith the agreed terms, he'd be the loser.
A collegue who is closely aquainted to them tells me that they do have debt, but it's all within the terms of the business plan and they appear to be far more stable than some other operators.
One thing is for sure, the Suckling family are as equally canny as MR Souter, and if he wanted his money back from this deal outwith the agreed terms, he'd be the loser.
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And judging by your contributions to other threads (the yogi thread for example), I do not think you quite grasp the economics of the airline industry
I'm not a pilot. I'm a business analyst, so with respect I know a bit about what makes money and what doesn't. My point about them not being loco was quite simple to grasp. Because they charge high fares at business hours, they are not forced to operate to the maximum between the hours of 0600 and 0000, as the loco model insists upon. It is to be expected that the aircraft remain parked out of peak hours.
Feel free to read my comments on the Loganair thread again, I think they are an honest appraisal of the realistic market. But please please guys be aware that throwaway comments like " the writing is on the wall" can be dangerous for a trading company.
I'm not a pilot. I'm a business analyst, so with respect I know a bit about what makes money and what doesn't. My point about them not being loco was quite simple to grasp. Because they charge high fares at business hours, they are not forced to operate to the maximum between the hours of 0600 and 0000, as the loco model insists upon. It is to be expected that the aircraft remain parked out of peak hours.
Feel free to read my comments on the Loganair thread again, I think they are an honest appraisal of the realistic market. But please please guys be aware that throwaway comments like " the writing is on the wall" can be dangerous for a trading company.
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Scot Airways
RE: messages by Skipness One Echo
Firstly, I would like to say that I respect you being a business analyst. However, this does not make MEEBs comments incorrect re the strength of the Scot Airways , one does not need to be a genius to realise that an airline in todays trading environment with such a small network and with such competition eg at SOU & LCY, an airline could very well be considered to be in bad times.
The ownership of the airline has changed and since its not exactly a sought after company, one could be led to believe they are in trouble.
Furthermore , I realise as much as anyone that LCY is busier at peak times , nevertheless, simple economics would ask the question why are aircraft sitting on the ground doing nothing when they could be carrying passengers and earning revenue somewhere.
Firstly, I would like to say that I respect you being a business analyst. However, this does not make MEEBs comments incorrect re the strength of the Scot Airways , one does not need to be a genius to realise that an airline in todays trading environment with such a small network and with such competition eg at SOU & LCY, an airline could very well be considered to be in bad times.
The ownership of the airline has changed and since its not exactly a sought after company, one could be led to believe they are in trouble.
Furthermore , I realise as much as anyone that LCY is busier at peak times , nevertheless, simple economics would ask the question why are aircraft sitting on the ground doing nothing when they could be carrying passengers and earning revenue somewhere.
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That's simplistic economics, not simple economics. The aircraft is required for the peak periods to EDI and DND, that's where the yield is, there is no market from City for a one off route in the middle of the day to a business destination, therefore the aircraft is idle. The market requires routes to get you there and back on the same business day. Now if another rotation to EDI or DND is going empty, it makes more sense to park than to fly fresh air up and down the UK.
Done properly and factored into a business model this will still make you money if you've got your costs and fares pitched at the correct level. THAT is the point about a full service airline making money from it's assets at the right time of day. I don't have access to their financial accounts and yield management but often there is a good reason for what at first glance looks like a bad idea.
However with BAConnect saturating the main LCY-EDI route, they will either survive on loyalty of happy customers or blled of and be brought down by the mighty London Airways. Only time will tell on that one.
Anyway that's my tuppence worth.
Done properly and factored into a business model this will still make you money if you've got your costs and fares pitched at the correct level. THAT is the point about a full service airline making money from it's assets at the right time of day. I don't have access to their financial accounts and yield management but often there is a good reason for what at first glance looks like a bad idea.
However with BAConnect saturating the main LCY-EDI route, they will either survive on loyalty of happy customers or blled of and be brought down by the mighty London Airways. Only time will tell on that one.
Anyway that's my tuppence worth.
The vast majority of aviation costs are directly proportional to hours flown, probably to a greater extent than most other businesses. Fuel is obvious but even the way crews are paid by the flying hour rather than being fixed wages per week staff means their cost is again related to flying hours. Handling agents on the ground charge by the movement. Maintenance is again hours-proportional, even things like insurance are usage related, unlike what you do with car insurance. Unfortunately a fixation with aircraft utilisation does not give appropriate understanding of this.
So operators who adapt their usage to the market do not suffer a disadvantage. Of course the greatest proponents of this approach are the Titans and suchlike, standing by waiting for the charter call to come. They are commercially successful as well. For an operator like Scot I would say the variable costs are probably 90% of the total; for someone like BA they will be lower.
The time-based element of a Dornier 328's lease rate is low; the type is out of production and demand for it is thin. It's a nice aircraft for the money.
There is no point operating sectors where the revenue does not cover the operating costs. But there is a point having the resources ready to carry peak period loads at high fares.
And besides, I have always liked the shortbread tray Scot bring round ....
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And if you're flying a (relatively) old or relatively not-in-demand aircraft (and hence one with low lease or financing costs), you're not under such pressure to pay off fixed costs, so you can get away with lower utilisation. Eastern does this very well with their Jetstreams, several of which do a morning round-trip, an evening round-trip, and nothing in between. Result: good punctuality, and plenty of time for maintenance.
I have no access to ScotAirways' accounts so don't know how the operation is doing. But I certainly wouldn't conclude from low off-peak utilisation that they're doing something wrong.
C.
(oops, WHBM, you beat me to it!)
Last edited by Cyrano; 21st Nov 2006 at 08:35. Reason: overtaken by a faster typist! :-)
Cool Mod
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Here we go again! Everyone knows how to run an airline and yet no-one does. Skip has come close - but as a business anylyst. The others who seem to 'know' are way off beam.
I can tell you, from experience, that aeroplanes are sometimes required to stay on the ground. That is the way it works. It all depends on the requirement.
Having said that, I will not allow anymore comments of a negative nature that are just wild guesses. Unless you are in the office you are NOT aware of the economics of, or the flying of, aircraft in any particular airline.
Stay on track or this thread goes.
PPP
I can tell you, from experience, that aeroplanes are sometimes required to stay on the ground. That is the way it works. It all depends on the requirement.
Having said that, I will not allow anymore comments of a negative nature that are just wild guesses. Unless you are in the office you are NOT aware of the economics of, or the flying of, aircraft in any particular airline.
Stay on track or this thread goes.
PPP
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Away from the econo-babble, it was a good programme to watch.
You had to feel srry for Mr Boodray (or whatever the poor bugger was called!!) He seemed less than impressed at being told he was on his 100th flight with SA - and even less happy to stan on the wet Manc tarmac! Priceless!!
Just one question though - why renamed to ScotAir?? Was it just because they went into the EDI-LCY routes as their big thing??
You had to feel srry for Mr Boodray (or whatever the poor bugger was called!!) He seemed less than impressed at being told he was on his 100th flight with SA - and even less happy to stan on the wet Manc tarmac! Priceless!!
Just one question though - why renamed to ScotAir?? Was it just because they went into the EDI-LCY routes as their big thing??
Actually it was a personal investment (recently resold back to Roy and Merlin Suckling) by Brian Souter, founder and chairman of Stagecoach, who lives near Dundee airport. It was not a Stagecoach corporate investment. A fine distinction but there it is.
In addition to owning the Southwest Trains routes out of Waterloo, which are branded under their own name, Stagecoach also own 50% of Virgin Trains, London to Scotland and thus BS was in competition with himself.
In addition to owning the Southwest Trains routes out of Waterloo, which are branded under their own name, Stagecoach also own 50% of Virgin Trains, London to Scotland and thus BS was in competition with himself.
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AMS
Scotairways are advertising on their website SOU - AMS during Jan from £34 one way. I have checked their website this eve and the cheapest ticket I can find is £55 ex tax. The advert only appeared on their website a few days ago so either the seats haven't went on sale yet or they have all gone already?
Based on a journey from Southampton on the 17th January
Their £34 (if available)fare would come to approx £56.12 inc tax.
Flybe would come to £34.99 inc tax, a bag in the hold & a seat reservation
Also according to CAA stats for November the arrival of Flybe on the route has seen a massive increase in pax 9723 this year against 3580 last year.
Does anyone think Scot will hang around on this route or will they concede defeat to Flybe?
yieldwise Scotairways will always be better, but with hold baggage, online seat reservation fees and BOB catering they can't be that far behind. This must have been an extremely lucrative route in the past for Scotairways.
Based on a journey from Southampton on the 17th January
Their £34 (if available)fare would come to approx £56.12 inc tax.
Flybe would come to £34.99 inc tax, a bag in the hold & a seat reservation
Also according to CAA stats for November the arrival of Flybe on the route has seen a massive increase in pax 9723 this year against 3580 last year.
Does anyone think Scot will hang around on this route or will they concede defeat to Flybe?
yieldwise Scotairways will always be better, but with hold baggage, online seat reservation fees and BOB catering they can't be that far behind. This must have been an extremely lucrative route in the past for Scotairways.
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Scotairways Do328's for sale
I see that 3 of Scotairways Do 328's are up for sale (3022/23/88). How's that going to affect their operations? Is the 146 the way forward?
The Do328's must be a bit of problem now, didn't the company that was trying to support/produce them & the Jet version (Avjet?) go out of business? What's a Do328 (non-jet) worth these days??
I can see a big hole developing in the sub 48 seat market. AFAIK the smallest in-production turbo-prop is the ATR42. What's going to replace the fleets of SD3-60, SF340, J31/41, EMB120, B1900 etc in the future? The Twin Otter in just back in production!!
The Do328's must be a bit of problem now, didn't the company that was trying to support/produce them & the Jet version (Avjet?) go out of business? What's a Do328 (non-jet) worth these days??
I can see a big hole developing in the sub 48 seat market. AFAIK the smallest in-production turbo-prop is the ATR42. What's going to replace the fleets of SD3-60, SF340, J31/41, EMB120, B1900 etc in the future? The Twin Otter in just back in production!!
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Blueislands D328
The Blueislands 328 are they leasing that one or are they going to purchase it could be a buyers markek fot them at the moment and you never know the way Blueislands is expanding or going to they could need a second one.
Interesting times ahead for these three that are for sale.
Interesting times ahead for these three that are for sale.
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Two Dorniers would be ideal for BlueIslands, one to operate to the IOM and ZRH/GVA and a second one to operate to LCY, would make an ideal step to becoming a very popular business airline, who knows could be the new Eastern.
