Aer Lingus - 5
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Belfast was launched with a poor choice of routes and terrible publicity so it's no surprise that it started off poorly. Geneva, Budapest and Nice all failed early on and were quickly dropped but Amsterdam continued suffering awful loads and more bad decisions were made when Barcelona changed schedule which saw it's load factor drop.
Aer Lingus did make some positive changes though, Lanzarote, Munich and Milan were added taking the base in a new direction followed by a new Barcelona schedule which now ties in the cruise departures possibly down to a deal with a cruise company and Tenerife has been added while the long underperforming Amsterdam is dropped.
So it isn't all bad news for Belfast and with the recent changes things are looking better than they did this time last year.
Here are some loads up until October 2008:
Faro - 75%
Malaga - 70%
Rome - 63%
Barcelona - 60%
Heathrow - 60%
I'm sure Lanzarote falls in the high 70s with Munich and Milan not too far behind so looking at those, I don't think it's really fair to say that LHR is the only reasonably performing route.
I wish Aer Lingus all the best at Gatwick, it's a brave move but they won't get anywhere by playing things safe.
Aer Lingus did make some positive changes though, Lanzarote, Munich and Milan were added taking the base in a new direction followed by a new Barcelona schedule which now ties in the cruise departures possibly down to a deal with a cruise company and Tenerife has been added while the long underperforming Amsterdam is dropped.
So it isn't all bad news for Belfast and with the recent changes things are looking better than they did this time last year.
Here are some loads up until October 2008:
Faro - 75%
Malaga - 70%
Rome - 63%
Barcelona - 60%
Heathrow - 60%
I'm sure Lanzarote falls in the high 70s with Munich and Milan not too far behind so looking at those, I don't think it's really fair to say that LHR is the only reasonably performing route.
I wish Aer Lingus all the best at Gatwick, it's a brave move but they won't get anywhere by playing things safe.
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It's quite surprising how many contributors here seem to think there is a huge difference between EIs costs and FRs costs.
FR have managed to get huge discounts from airport operators over the years, often with no fees for the first few years. EI is going in to these airports and getting the same deal years later. At the same time FRs deals are expiring, and they are pulling off routes if their deals are not extended.
Don't assume that FRs costs are a lot lower that EIs. Most of EIs A320s in recent years have been leased, and when things go wrong, they can always be returned to the lessor, so downsizing can be cost effective.
On the other hand, FR have ordered vast quantities of 737s, the bulk due for delivery over the next 18 months. In order to get them relatively cheap, FR had to commit to purchasing them at an early stage with no opt out clause. This all looked well five years ago when the orders were being placed - no one in FR (or elsewhere for that matter) envisaged the rapid downturn in the economy we've recently seen. O'Leary bragged that if he had excess aircraft he could always sell them onwards at a profit as he got them so cheap. Well, with over 200 737s available for sale or lease on the open market, I don't see him pulling off too many sales at a profit for a long, long time.
FR also have over ten aircraft parked up for the foreseeable future and over 40 737s for delivery in the next six months. I would be more concerned at the effect of having such a large number of unproductive aircraft on the balance sheet.
I can't see any bank in the western hemisphere being reckless enough in the current environment to lend money to any airline to buy lots of new aircraft that have no earning capability. FR have in the last ten days announced the closure of eight routes. Consequently the only way I see MOL affording all these new aircraft is to use FR's cash reserves. Given that FR's balance sheet is already heavily debt laden - approx 45%, the question has to asked as to how robust their position would be to withstand the next few years with their cash reserves depleted.
I don't think there is any other airline out there with potentially such a high risk financial model as FR. Most such companies -airlines or otherwise, do not survive an economic downturn.
FR have managed to get huge discounts from airport operators over the years, often with no fees for the first few years. EI is going in to these airports and getting the same deal years later. At the same time FRs deals are expiring, and they are pulling off routes if their deals are not extended.
Don't assume that FRs costs are a lot lower that EIs. Most of EIs A320s in recent years have been leased, and when things go wrong, they can always be returned to the lessor, so downsizing can be cost effective.
On the other hand, FR have ordered vast quantities of 737s, the bulk due for delivery over the next 18 months. In order to get them relatively cheap, FR had to commit to purchasing them at an early stage with no opt out clause. This all looked well five years ago when the orders were being placed - no one in FR (or elsewhere for that matter) envisaged the rapid downturn in the economy we've recently seen. O'Leary bragged that if he had excess aircraft he could always sell them onwards at a profit as he got them so cheap. Well, with over 200 737s available for sale or lease on the open market, I don't see him pulling off too many sales at a profit for a long, long time.
FR also have over ten aircraft parked up for the foreseeable future and over 40 737s for delivery in the next six months. I would be more concerned at the effect of having such a large number of unproductive aircraft on the balance sheet.
I can't see any bank in the western hemisphere being reckless enough in the current environment to lend money to any airline to buy lots of new aircraft that have no earning capability. FR have in the last ten days announced the closure of eight routes. Consequently the only way I see MOL affording all these new aircraft is to use FR's cash reserves. Given that FR's balance sheet is already heavily debt laden - approx 45%, the question has to asked as to how robust their position would be to withstand the next few years with their cash reserves depleted.
I don't think there is any other airline out there with potentially such a high risk financial model as FR. Most such companies -airlines or otherwise, do not survive an economic downturn.
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motives
With Ireland the first member EU state officially in recession, and having seen first hand the practice of removing ... shall we say "questionable excess cash" from the Republic, perhaps there is some insight in what route cuts are being envisaged.
The "property developers" have apparently caught a rather large cold !
btw .. I am a very frequent flier .. and wish them well .. they should stay as a well managed independent airline, free of MOL .... IMHO .
The "property developers" have apparently caught a rather large cold !
btw .. I am a very frequent flier .. and wish them well .. they should stay as a well managed independent airline, free of MOL .... IMHO .
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I feel the writing is on the wall for the BFS base
The base will not be closed, yes it's a difficult market but Jet2 has retracted on most routes and this makes a little space for Aer Lingus on some of the sun routes.
As regards comments that Aer Lingus started off badly with poor publicity, I really cant see how differently or better it could have been done.
widespread TV advertising at peak times, bill boards all over the province, newspaper advertising, advertising on the back of buses, sponsorship of one of the morning radio shows. I think we were bombarded with information and news on the subject. The market is limited in a challenging economic climate. Aer Lingus will come out of this better and when the economic climate lifts they will boom.
On a final note, the new routes ie Milan and Munich have 100 seats guarnteed sold via a travel agency and this is the reason why these particular ones were chosen. So in real terms EI are selling 74 seats on there website for each of these routes as the others are sold already on a package!
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Aer Lingus, Easyjet and Ryanair costs
For those that are interested, there is a comparison of Aer Lingus, Easyjet and Ryanair cost per pax on slide 13 of Ryanair's latest offer presentation:
http://www.ryanair.com/site/promos/c...esentation.pdf
Whether you choose to believe it or dismiss it as spin is up to you. You could also argue that they are not really comparing like with like. Nevertheless, it makes for interesting reading.
http://www.ryanair.com/site/promos/c...esentation.pdf
Whether you choose to believe it or dismiss it as spin is up to you. You could also argue that they are not really comparing like with like. Nevertheless, it makes for interesting reading.
FR also have over ten aircraft parked up for the foreseeable future and over 40 737s for delivery in the next six months. I would be more concerned at the effect of having such a large number of unproductive aircraft on the balance sheet.
I can't see any bank in the western hemisphere being reckless enough in the current environment to lend money to any airline to buy lots of new aircraft that have no earning capability. FR have in the last ten days announced the closure of eight routes. Consequently the only way I see MOL affording all these new aircraft is to use FR's cash reserves. Given that FR's balance sheet is already heavily debt laden - approx 45%, the question has to asked as to how robust their position would be to withstand the next few years with their cash reserves depleted.
I can't see any bank in the western hemisphere being reckless enough in the current environment to lend money to any airline to buy lots of new aircraft that have no earning capability. FR have in the last ten days announced the closure of eight routes. Consequently the only way I see MOL affording all these new aircraft is to use FR's cash reserves. Given that FR's balance sheet is already heavily debt laden - approx 45%, the question has to asked as to how robust their position would be to withstand the next few years with their cash reserves depleted.
Currently FR at end of September had 39 leased aircraft so replacing with owned is pretty easy as and when leases expire.
Gearing at 45% is not heavily indebted.
Cash generated in first half year was €177m so somehow the idea that they are not generating cash is not being reflected in reporting results.
EI on the other hand is using up its cash and with an Operating loss this year plus redundancy payments which are an Exceptional Item I think you will find EI with a negative cash flow for 2008 of circa €50m.
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Austrian
An Austrian Airlines is about to depart from BFS to Innsbruck, it's a Fokker 100. It was not showing on the arrivals board, does anybody know where it arrived from?
It was nice to see a Fokker 100 on approach!
It was nice to see a Fokker 100 on approach!
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There you are again racedo, When the managers and chairman say EI will be in profit for the year, we are to believe you are we?
You won't answer questions. When challenged you ignore the question and then continue to spin. A performance worthy of MO'L.
Try answering these; if they can replace leased aircraft, why are they parking aircraft up? If all is so well, why are their own financiers advising a 140million loss this year?
Cash generated in first half year was €177m so somehow the idea that they are not generating cash is not being reflected in reporting results.
What the F%$£ are you on about?
You won't answer questions. When challenged you ignore the question and then continue to spin. A performance worthy of MO'L.
Try answering these; if they can replace leased aircraft, why are they parking aircraft up? If all is so well, why are their own financiers advising a 140million loss this year?
Cash generated in first half year was €177m so somehow the idea that they are not generating cash is not being reflected in reporting results.
What the F%$£ are you on about?
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3. Fuel hedging double current spot rates
“The Group has extended its hedging for the full year 2009 to 64% at a rate of $995 per tonne”
“The Group has extended its hedging for the full year 2009 to 64% at a rate of $995 per tonne”
anna_list I looked at a slideshow about my Pay once, it was even on the same background as these slides. I was being told I was earning about twice my salary. The grossing up and massaging of figures has to be seen to be believed. I would be very cautious of those figures in slide 13, I find them very hard to believe.
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racedo is looking less like a dedicated FR fan boy and more like a PR consultant being fed figures......oh the power of pprune that MOL feels he needs to do this
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NOCTI
"It's quite surprising how many contributors here seem to think there is a huge difference between EIs costs and FRs costs.
FR have managed to get huge discounts from airport operators over the years, often with no fees for the first few years. EI is going in to these airports and getting the same deal years later. At the same time FRs deals are expiring, and they are pulling off routes if their deals are not extended."
Whatever about Aer Lingus surviving or not surviving, to say that their cost per seat is the same as Ryanair\EasyJet is deluded. Plainly not true, in fact not even close, how could it be!
"It's quite surprising how many contributors here seem to think there is a huge difference between EIs costs and FRs costs.
FR have managed to get huge discounts from airport operators over the years, often with no fees for the first few years. EI is going in to these airports and getting the same deal years later. At the same time FRs deals are expiring, and they are pulling off routes if their deals are not extended."
Whatever about Aer Lingus surviving or not surviving, to say that their cost per seat is the same as Ryanair\EasyJet is deluded. Plainly not true, in fact not even close, how could it be!
Last edited by A319-100; 20th Dec 2008 at 11:22.
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Didn't Wille Walsh of BA say recently that he would like to see BA operate on Belfast London again, by contributing aircraft with EI and improving the timings would this be his revelation bearing fruit. If this rumour on BA operating one return journey BFS/LHR is true.
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A319-100 I am presuming that is directed at me? I was not trying to say that they are, what I am pointing out is that such a huge disparity is difficult to believe and that FR can be very creative with mathematics when they want.
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We could not like Ryanair (and I don't like them), but we must confess that yes there is a big difference in FR and EI cost, even if we compare what is comparable ie. the EI short haul costs with FR network
Among plenty of examples:
- the cost per seat of the 738 (especially with 189 seats) is unbeatable.
- c.crew or HQ salaries are a lot lower in Ryanair (which explain why so many FR employees want to work for EI)
- secondary airports: Ryanair has plenty of reduction offered by secondry airports where nobody else want to go
- ratio PAX/employee a lot higher for Ryanair
etc
Among plenty of examples:
- the cost per seat of the 738 (especially with 189 seats) is unbeatable.
- c.crew or HQ salaries are a lot lower in Ryanair (which explain why so many FR employees want to work for EI)
- secondary airports: Ryanair has plenty of reduction offered by secondry airports where nobody else want to go
- ratio PAX/employee a lot higher for Ryanair
etc
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Exactly, Like comparing appples and oranges. Aer Lingus are opening bases in territories already well established by Ryanair and Easyjet. Their costs are significantly less than Aer Lingus which gives them a huge advantage. Then take into account that Gatwick is a completely new base requiring expense to raise awareness. Lamb to the slaughter me thinks...
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- the cost per seat of the 738 (especially with 189 seats) is unbeatable.
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And a lot of FR's staffing costs are are hidden by the fact they use a lot of contract staff.
If you took all these into account I wonder what the true employee figure would be?
If you took all these into account I wonder what the true employee figure would be?
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Whatever about Aer Lingus surviving or not surviving, to say that there cost per seat is the same as Ryanair\EasyJet is deluded.
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They are not competing with Ryanair in Gatwick anyway
