What will happen in 2008?
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What will happen in 2008?
Hello all,
With so much talk of airline merger and MOLs prediction of there only being a few mega carriers in the European Market within the next few years, What does anyone think the biggest moves will be particularly in the UK/Ireland Market in 2008?
We know already of some changes and it will def be an big year, eg T5 opening. SAS selling there share in BMi? Loganair is leaving BA franchise arrangement. BA Buying same? Euromanx?
Whats your top3 predictions? would be an interesting theme to reflect upon this time next year. WHo would have forseen that EZY would have acquired GB? I certainly didnt. However , I did think that there would be some consolidation this year within the LoCos. I thought we would see some changes in Eg Bmibaby, FLyglobespan, Jet2?
In addition, does anyone forsee any major acquisitons by EZY/FR. Surely if MOL says that FR will be one of only 4 mega carriers in Europe surely he must have some acquistion aspirations?
Regards
EI-BUD
With so much talk of airline merger and MOLs prediction of there only being a few mega carriers in the European Market within the next few years, What does anyone think the biggest moves will be particularly in the UK/Ireland Market in 2008?
We know already of some changes and it will def be an big year, eg T5 opening. SAS selling there share in BMi? Loganair is leaving BA franchise arrangement. BA Buying same? Euromanx?
Whats your top3 predictions? would be an interesting theme to reflect upon this time next year. WHo would have forseen that EZY would have acquired GB? I certainly didnt. However , I did think that there would be some consolidation this year within the LoCos. I thought we would see some changes in Eg Bmibaby, FLyglobespan, Jet2?
In addition, does anyone forsee any major acquisitons by EZY/FR. Surely if MOL says that FR will be one of only 4 mega carriers in Europe surely he must have some acquistion aspirations?
Regards
EI-BUD
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1. EI to acquire a substantial stake in RE to provide capital for fleet expansion (including Jets) with a view to RE taking on a number of EI's UK destinations with a higher frequency than at present.
2. A Central European LoCo to go to the wall.
3. A worldwide economic slowdown to push a Western European flag carrier into a merger or out of business.
2. A Central European LoCo to go to the wall.
3. A worldwide economic slowdown to push a Western European flag carrier into a merger or out of business.
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If the fuel prices keep the way they are and the US economy goes into recession as predicted, then I can see major consolidation with the US Legacy carriers.
Could even be testing times ahead for Jetblue etc
Could even be testing times ahead for Jetblue etc
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2. A Central European LoCo to go to the wall.
FR will buy Skyeurope
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The problem FR dont have the a/c to expand at the rate it wants, EMA was meant to get 2new a/c this winter but it didnt because of new bases. And easyJet now have more a/c 
, we neede to buy someone really to catch up, unless boeing speed up production
, we neede to buy someone really to catch up, unless boeing speed up production
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Why would FR buy SkyEurope when they could start a load of routes from new bases in Bratislava, Vienna and Prague and force them out of business? Surely a lot easier
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While it is impossible to predict exactly who will merge with who, I think it is inevitable that there will be further consolidation. I was certain that GB would be merged with someone. But I got the wrong partner. I think in the end it was a matter of who would pay the highest price for Gatwick slots. Just look at what BA have done since then to confront the threat. Mainline is going to operate routes that were previously operated by GB. To use the LGW slots effectively EZY is going to have to do some rapid replanning. It all makes for a very dynamic environment.
In that environment you have to look at the strengths of the dominant players. There are only 2. RYR and EZY. They will have to acquire to go on growing. The best targets for them are companies who have no economics of scale but have regional specialisation. Jet 2, Globespan, Wizzair are obvious targets. I give these companies no more than 18 months of independent life.
I am sure that 2008 is going to be a year of huge change.
Akerosid please put in your own views.
In that environment you have to look at the strengths of the dominant players. There are only 2. RYR and EZY. They will have to acquire to go on growing. The best targets for them are companies who have no economics of scale but have regional specialisation. Jet 2, Globespan, Wizzair are obvious targets. I give these companies no more than 18 months of independent life.
I am sure that 2008 is going to be a year of huge change.
Akerosid please put in your own views.
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Airhumberside, you can not start new routes and open new bases without a/c and Ryanair can not change how soon it gets them nice new a/c from boeing any sooner. So thats why it needs to buy another airline to play catch up, also is skyeurope does go tits up, it will be a nice cheap airline to buy as an on going concern from its creditors. Plus is will open up new routes into east european markets which Ryanair so far have not really tapped into.
p.s. i agree with you colegate, its time for change, and those with the huge cash funds will ride it out and become even stronger after it. However im totally sure about Jet2, yes the dart group does have a few issues, but how would the airline be intergrated into the likes of easyJet and Ryanair, brake the company into bits, cargo. . . ? I dont see Ryanair playing postman for Royal Mail or anyone come to that, only cargo it every carries is its own (base-base)
Lee
p.s. i agree with you colegate, its time for change, and those with the huge cash funds will ride it out and become even stronger after it. However im totally sure about Jet2, yes the dart group does have a few issues, but how would the airline be intergrated into the likes of easyJet and Ryanair, brake the company into bits, cargo. . . ? I dont see Ryanair playing postman for Royal Mail or anyone come to that, only cargo it every carries is its own (base-base)
Lee
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BMI Baby and BMI Regional to be "soaked" up by someone (FlyBe?)...???
Loganair - Scott Grier to sell completley (FlyBe, Eastern?) as he is over 60 now, I suspect waiting for his knighthood for services to Scottish aviation! Or to become another franchise partner (FlyBe, Eastern?)...???
No real sign of the likes of Jet2 or Globespan folding at all, they will continue to change routes, add new aircraft (B763?) dramatically as forced by the market conditions but will never become a major player. The changes will keep them a "bottom of the list" employer for pilots as they "play at it".
Summer 2008 will now see only 2 major charter carriers in the UK - Thomas Cook and whatever the branding is between Thomson and First Choice. I would not expect that much change in 2008 but expect severe shrinkage in 2009 with fleet evaluation and Peter Long trying to regain 5% profit margins - Thomsonfly LoCo days have to be numbered, first arrival of european 787 etc etc...but thats for this time next year!!!!!
Monarch/Astraeus/Excel will just continue doing what they do very well, with B787's coming at Monarch, B763 for Astraeus and A330's for Excel...kinda makes you think the charter market future is long haul only!!!!!!!
Late 2008 - easyJet to become UK's national carrier!!!!!
Loganair - Scott Grier to sell completley (FlyBe, Eastern?) as he is over 60 now, I suspect waiting for his knighthood for services to Scottish aviation! Or to become another franchise partner (FlyBe, Eastern?)...???
No real sign of the likes of Jet2 or Globespan folding at all, they will continue to change routes, add new aircraft (B763?) dramatically as forced by the market conditions but will never become a major player. The changes will keep them a "bottom of the list" employer for pilots as they "play at it".
Summer 2008 will now see only 2 major charter carriers in the UK - Thomas Cook and whatever the branding is between Thomson and First Choice. I would not expect that much change in 2008 but expect severe shrinkage in 2009 with fleet evaluation and Peter Long trying to regain 5% profit margins - Thomsonfly LoCo days have to be numbered, first arrival of european 787 etc etc...but thats for this time next year!!!!!
Monarch/Astraeus/Excel will just continue doing what they do very well, with B787's coming at Monarch, B763 for Astraeus and A330's for Excel...kinda makes you think the charter market future is long haul only!!!!!!!
Late 2008 - easyJet to become UK's national carrier!!!!!
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FR are not short of planes in the winter, they are short of hedged fuel. They hedged (i.e. bought in advance) 90% of what they needed at the equilalent to $65/barrel crude oil price. That allows them to run 90% of what they planned profitably. The last 10% costs around 50% more.
FR are very actively selling planes at a simular price it paid for them 6 years ago. They make a better return on selling planes than usining them at EMA this winter.
I see very few airlines going under in early 2008 but far more reductions in flying programmes outside the summer peaks. It is the winter 2008/9 when they will be having real problems.
Silverjet will run out of money next Spetember and be sold off cheap.
The crude oil price will hit $130/barrel next August in my view.
FR are very actively selling planes at a simular price it paid for them 6 years ago. They make a better return on selling planes than usining them at EMA this winter.
I see very few airlines going under in early 2008 but far more reductions in flying programmes outside the summer peaks. It is the winter 2008/9 when they will be having real problems.
Silverjet will run out of money next Spetember and be sold off cheap.
The crude oil price will hit $130/barrel next August in my view.
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Airhumberside, you can not start new routes and open new bases without a/c and Ryanair can not change how soon it gets them nice new a/c from boeing any sooner. So thats why it needs to buy another airline to play catch up, also is skyeurope does go tits up, it will be a nice cheap airline to buy as an on going concern from its creditors. Plus is will open up new routes into east european markets which Ryanair so far have not really tapped into.
B763 for Astraeus
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dumdumbrain, The thing about Jet 2 is that is an almost impossible combination of bits of opportunity. If RYR or EZY wanted to buy it it would be for their LBA operation. LBA is the second largest conurbation in Britain. Jet 2 have a monoploy there. All monopolies attract predators. LBA covers a huge market and either RYR or EZY must move in there in order to maintain their growth. They would not care about the minor bits of the company. Post Office operations would be off loaded to other operators.
This take over at LBA is something waiting to happen. The only issue is what price Phillip Meeson is prepared to accept.
Let this thread keep on rolling.
This take over at LBA is something waiting to happen. The only issue is what price Phillip Meeson is prepared to accept.
Let this thread keep on rolling.
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Thanks Colegate ...
I'm not at all optimistic about 2008; I hope I am wrong ...
I think we'll see a significant slowdown … economically, which will inevitably affect aviation; this will mainly be in the EU and US. Growth will continue in major Asian economies, led by India and China; travel/trade to these will grow; t/a traffic will level or fall off, notwithstanding Open Skies - (from an Irish perspective, another major danger for EI.) Airlines, like AY, LH, KL/AF, with good Asian links, will do well; those without, not so good - again, in Irish context, EI suffers here. EK will continue to grow, as will QR/EY, despite pressure from EU airlines like LH, to spike this. Unlikely to have much effect.
From an Irish perspective, particularly worried about EI. Don't see FR taking over, nor being allowed to. FR will be a big winner and will be in a position to "turn the screws" on what they perceive to be weaker carriers … among them EI, Sky Europe, Vueling.
US market will be particularly interesting to watch; one merger will lead to another. If I had to choose two names to disappear, it would be NW and US, into DL and possibly UA? Don't see UA/DL being particularly well matched. Noticed today, however, that UA's CEO, Tilton, has again gone on record about desirability of mergers, so something stirring.
Problem with upcoming slowdown is that oil price has a lot to do with it; as long as oil remains at or above $100 - and I see that being the case for the foreseeable future - then this could be a long recession, even depression.
Political issues: expect the US, even with new administration, to fight tooth and nail over inclusion of aviation in emissions trading. That could get very bitter; could also affect next round of EU/US bilateral talks.
Nastier still, M/E situation … effect of any action against Iran, which would close Straits of Hormuz … $100 a barrel may yet look like a bargain. Would see this is being more likely next year (although certainly - and hopefully - not inevitable), particularly as Iran moves towards nuclear weapons; Israel will want to act, but held back by cooler heads in US; Cheney and "hawks" will want them to go ahead. Don't hold out much hope for ME peace, since Hamaz/Hezbollah not involved; Iran will "activate" them if attacked by Israel, possibly drawing Syria in as well.
On positive side; slowdown will - if advantage taken of it by airports - allow infrastructure to catch up and be ready for next upturn.
I'm not at all optimistic about 2008; I hope I am wrong ...
I think we'll see a significant slowdown … economically, which will inevitably affect aviation; this will mainly be in the EU and US. Growth will continue in major Asian economies, led by India and China; travel/trade to these will grow; t/a traffic will level or fall off, notwithstanding Open Skies - (from an Irish perspective, another major danger for EI.) Airlines, like AY, LH, KL/AF, with good Asian links, will do well; those without, not so good - again, in Irish context, EI suffers here. EK will continue to grow, as will QR/EY, despite pressure from EU airlines like LH, to spike this. Unlikely to have much effect.
From an Irish perspective, particularly worried about EI. Don't see FR taking over, nor being allowed to. FR will be a big winner and will be in a position to "turn the screws" on what they perceive to be weaker carriers … among them EI, Sky Europe, Vueling.
US market will be particularly interesting to watch; one merger will lead to another. If I had to choose two names to disappear, it would be NW and US, into DL and possibly UA? Don't see UA/DL being particularly well matched. Noticed today, however, that UA's CEO, Tilton, has again gone on record about desirability of mergers, so something stirring.
Problem with upcoming slowdown is that oil price has a lot to do with it; as long as oil remains at or above $100 - and I see that being the case for the foreseeable future - then this could be a long recession, even depression.
Political issues: expect the US, even with new administration, to fight tooth and nail over inclusion of aviation in emissions trading. That could get very bitter; could also affect next round of EU/US bilateral talks.
Nastier still, M/E situation … effect of any action against Iran, which would close Straits of Hormuz … $100 a barrel may yet look like a bargain. Would see this is being more likely next year (although certainly - and hopefully - not inevitable), particularly as Iran moves towards nuclear weapons; Israel will want to act, but held back by cooler heads in US; Cheney and "hawks" will want them to go ahead. Don't hold out much hope for ME peace, since Hamaz/Hezbollah not involved; Iran will "activate" them if attacked by Israel, possibly drawing Syria in as well.
On positive side; slowdown will - if advantage taken of it by airports - allow infrastructure to catch up and be ready for next upturn.
Just look back in 12 months and check whether these 2008 predictions are realized:
Terminal 5 will open at Heathrow
EasyJet will acquire GB Airways and continue with most of its routes from Gatwick
EasyJet and Ryanair will continue to take delivery of A319s and B738s respectively
PPRuNe posters will still be hoping for new services between Carlisle and Norwich, Newquay and Exeter, and other selected routes.
Ryanair's CEO will continue to make a noise
MyTravel will merge with Thomas Cook and First Choice will merge with Thomsonfly
More questionable predictions:
Sky Europe and Euromanx will fail
Oil will remain at over $100/bbl
FlyBe will either buy another airline or be bought
No progress will be made on any UK airport "masterplans" except those owned by BAA
Coventry will handle fewer passengers than in 2007.
By December 2008, there will be at least 3 Pakistani airlines serving UK airports
We'll all be a year older...
Terminal 5 will open at Heathrow
EasyJet will acquire GB Airways and continue with most of its routes from Gatwick
EasyJet and Ryanair will continue to take delivery of A319s and B738s respectively
PPRuNe posters will still be hoping for new services between Carlisle and Norwich, Newquay and Exeter, and other selected routes.
Ryanair's CEO will continue to make a noise
MyTravel will merge with Thomas Cook and First Choice will merge with Thomsonfly
More questionable predictions:
Sky Europe and Euromanx will fail
Oil will remain at over $100/bbl
FlyBe will either buy another airline or be bought
No progress will be made on any UK airport "masterplans" except those owned by BAA
Coventry will handle fewer passengers than in 2007.
By December 2008, there will be at least 3 Pakistani airlines serving UK airports
We'll all be a year older...
A very interesting thread, well done EI-BUD for getting the creative energies flowing!
The trouble is that it's very hard to predict what's going to happen in a definite time period. Most of the key themes mentioned already (FR acquire EI, CEE loco goes to the wall, retrenchment of UK charter industry, number of large EU airlines contracts to a mere handful, ...) most sensible and informed people would agree are likely in the long term. But the problem always is (i) how long will any given step take and (ii) where not specified, who will be victim/villain? Couple that with the power of external events to change the course of the industry. But we do live in interesting times, a general economic slowdown will bring many of the systemic issues facing the industry into sharp focus!
I will give it some thought and make my best guess predictions when I have some more time!
The trouble is that it's very hard to predict what's going to happen in a definite time period. Most of the key themes mentioned already (FR acquire EI, CEE loco goes to the wall, retrenchment of UK charter industry, number of large EU airlines contracts to a mere handful, ...) most sensible and informed people would agree are likely in the long term. But the problem always is (i) how long will any given step take and (ii) where not specified, who will be victim/villain? Couple that with the power of external events to change the course of the industry. But we do live in interesting times, a general economic slowdown will bring many of the systemic issues facing the industry into sharp focus!
I will give it some thought and make my best guess predictions when I have some more time!
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FlyBe to aquire (or attempt to) one of either BMI Regional, RE or WOW.
EuroManx to aquire two Dornier 328 and operate a slimmed down business
Flight Support to continue expanding around the UK
BA to 'suspend' MORE routes and BE to fill the gap
Eastern to lose a lot of business to FlyBe
EuroManx to aquire two Dornier 328 and operate a slimmed down business
Flight Support to continue expanding around the UK
BA to 'suspend' MORE routes and BE to fill the gap
Eastern to lose a lot of business to FlyBe
