FlyBe - 6
Join Date: Sep 2010
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If you don't like the facts then not my problem but I'm certainly not trying to undermine Flybe as I still have many friends left there.
Is there anything in my previous post that is inaccurate?
How much fuel can a 175 carry with a full passenger load at the Flybe, cost effective, reduced MTOW?
Join Date: Sep 2010
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I'll take that as a 'no nothing was inaccurate' answer to my first question and an 'I don't know to my second'.
I'll tell you if you want. 4.5 tonnes. 5.5 with a Dash load. Can't go far on that. In fact give it a 40 knot headwind and you can take just about minimum fuel between LGW and INV. Not an ideal Dash replacement, even if it is the same cost to operate.
I'll tell you if you want. 4.5 tonnes. 5.5 with a Dash load. Can't go far on that. In fact give it a 40 knot headwind and you can take just about minimum fuel between LGW and INV. Not an ideal Dash replacement, even if it is the same cost to operate.
Join Date: Mar 2003
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@: Leg
Not that difficult to understand, me thinks.
Toyota tries to sell me a car. It consumes, say 7 litres / 100 miles.
VW tries to sell me a car as well. It consumes, say 8 litres / 100 miles. So VW says we will throw in competitive financing etc., so the cost per mile will be the same as the Toyota. This calculation has to be based, of course, on a certain price for a litre of petrol.
So, let's say, all that happens when the price for a litre of petrol was 1 GBP. Three years later, a litre of petrol is not 1 GBP, but 1.20 GBP.
Is the cost per mile for both cars still the same if the other variables are unchanged?
Or to put it differently, is Embraer covering the additional fuels costs through flexible financing / lower acquistion costs for as long as Flybe operates the E175?
Not that difficult to understand, me thinks.
Toyota tries to sell me a car. It consumes, say 7 litres / 100 miles.
VW tries to sell me a car as well. It consumes, say 8 litres / 100 miles. So VW says we will throw in competitive financing etc., so the cost per mile will be the same as the Toyota. This calculation has to be based, of course, on a certain price for a litre of petrol.
So, let's say, all that happens when the price for a litre of petrol was 1 GBP. Three years later, a litre of petrol is not 1 GBP, but 1.20 GBP.
Is the cost per mile for both cars still the same if the other variables are unchanged?
Or to put it differently, is Embraer covering the additional fuels costs through flexible financing / lower acquistion costs for as long as Flybe operates the E175?
Join Date: Jan 2005
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Using your numbers, the incremental cost for 100 miles has increased.
Your sums were based on £7 and £8 which is a difference of £1 which has to be covered by a reduction in other costs. With the increase in fuel price on the same journey, the numbers are now £8.40 and £9.60 so £1.20 needs to be found. That's a 20% increase in cross-subsidising the fuel costs that needs to be squeezed out of another budget. If you can't do it then you have become less profitable.
Your sums were based on £7 and £8 which is a difference of £1 which has to be covered by a reduction in other costs. With the increase in fuel price on the same journey, the numbers are now £8.40 and £9.60 so £1.20 needs to be found. That's a 20% increase in cross-subsidising the fuel costs that needs to be squeezed out of another budget. If you can't do it then you have become less profitable.
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Leg, i have read all the same internal info that you will of read about leasing costs, fuel and other operating costs of the 175 against the Q400. I completely understand why you think that they are on par. One question if you don't mind. Why the hell did I loose a shed load of sby last winter to operate the Q400 on a 175 route. The answer is ops were told to do that to reduce fuel costs. The 175 is not as cheap as the company want you to Think. Infact I believe they could be the downfall of this airline. The one reason for that is the man who was responsible for buying them quite simply didn't do his homework and sums correct and has f**ked up big time. Embraer saw him coming a mile off and flogged him a dead horse!
Join Date: Sep 2007
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It is difficult to believe that a jet can be as economical as a Q400 even with all kinds of financial incentives thrown in at the outset. It is the daily operating costs which make the difference in a time of rising fuel prices, to think otherwise is to swallow the car dealer's assurances.......
The deal for the 175s worked versus the Q400s when fuel was at $70/barrel, and that's where it was when the deal was done. Plug fuel prices of $110/barrel into the calculator and it looks very different indeed....and is part of the current problem.
Join Date: Nov 1999
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Here is some background to the deal structure, from the time it was announced.
Even so, Strong notes that the cost, per trip, of operating the E175 was £200 above that of a Q400. The E175 has ten more seats, and the higher cost would have meant Flybe had to sell at least three of those on a guaranteed basis to make up the difference. That was too much risk, Strong says.
In came BNDES, the Brazilian export credit agency, which offered 85% financing support on the deal at what Strong calls “competitive rates.”
The entire package meant that on a per-trip basis, the E175 could now match the Q400. In the end, Embraer signed a firm contract for 35 of the aircraft, 65 options, and 40 purchase rights. Some of the options are soon to be exercised. There is still one caveat, though. Flybe’s math assumes a $90 price for fuel. At $110, the airline has to sell at least one of the extra ten E175 seats to again reach cost parity with the Q400.
In came BNDES, the Brazilian export credit agency, which offered 85% financing support on the deal at what Strong calls “competitive rates.”
The entire package meant that on a per-trip basis, the E175 could now match the Q400. In the end, Embraer signed a firm contract for 35 of the aircraft, 65 options, and 40 purchase rights. Some of the options are soon to be exercised. There is still one caveat, though. Flybe’s math assumes a $90 price for fuel. At $110, the airline has to sell at least one of the extra ten E175 seats to again reach cost parity with the Q400.
Join Date: Mar 2003
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Does that make sense?
As they seem to calculate on the basis of an average fare of 66 GBP / 102 USD (3 seats needed to be sold to make up the higher per trip cost difference of the E175 of 200 GBP), one additional seat sold would buy them less than one barrel of jet fuel...?
As they seem to calculate on the basis of an average fare of 66 GBP / 102 USD (3 seats needed to be sold to make up the higher per trip cost difference of the E175 of 200 GBP), one additional seat sold would buy them less than one barrel of jet fuel...?
Join Date: Dec 2011
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Leg: As many posters have highlighted the fact the financial package appeared to make it look like the 175 could come out costing the same as an old q400 is irrelevant and the core of the problem. As we know, where operating costs like fuel are variable, finance sits in a strict structure. Basically it looks like BE are realising the discounted finance is not so positive looking now fuel has risen $20 a barrel. The fact someone high up who presumably has a good level of education was mugged in to buying the completely wrong tool for the job by the dangling of a relatively simple carrot is astounding and is now costing people their livelihoods. I mean you wouldn't go out and buy a car with a 5 litre engine because the salesman made the finance workable would you?! This is basic business sense and due diligence we are talking about, personally the person responsible should be one of the ones losing their jobs.
Besides the fact that the general consensus is that a turboprop is more economical than a jet just like a diesel car is over a petrol the fact that the turboprop exists and is still racking up considerable sales surely is proof enough that a jet is not on a par for the majority of shorthaul operations? If your argument was right Leg then surely ATR and Bombardier would cease to exist?
Surely the fact saab's, twin otter's, metroliner's, beech 1900's, emb 120's, dorniers, ATP's, Let 410's old dash's and ATR's are still in active service long after most of them were being produced whereas the equivalent jets are largely only survived as private jets adds further to the argument?
Surely BE would not be able to sustain (and to have grown to the extent it has) the majority of its routes with a pure jet fleet? Take Sou for example, at any one time there has been up to 15 routes just to France. Can you really imagine this being sustainable with just the 175?
Basically to summarise, it looks like some clown who should have known better has sold out a dynamic and well placed company into locking themselves into a $1bil deal for a shiny yet unworkable tool in place of the gem (q400) that has made them what they are and at the expense of many jobs and maybe even the company itself.
Besides the fact that the general consensus is that a turboprop is more economical than a jet just like a diesel car is over a petrol the fact that the turboprop exists and is still racking up considerable sales surely is proof enough that a jet is not on a par for the majority of shorthaul operations? If your argument was right Leg then surely ATR and Bombardier would cease to exist?
Surely the fact saab's, twin otter's, metroliner's, beech 1900's, emb 120's, dorniers, ATP's, Let 410's old dash's and ATR's are still in active service long after most of them were being produced whereas the equivalent jets are largely only survived as private jets adds further to the argument?
Surely BE would not be able to sustain (and to have grown to the extent it has) the majority of its routes with a pure jet fleet? Take Sou for example, at any one time there has been up to 15 routes just to France. Can you really imagine this being sustainable with just the 175?
Basically to summarise, it looks like some clown who should have known better has sold out a dynamic and well placed company into locking themselves into a $1bil deal for a shiny yet unworkable tool in place of the gem (q400) that has made them what they are and at the expense of many jobs and maybe even the company itself.
The one reason for that is the man who was responsible for buying them quite simply didn't do his homework and sums correct and has f**ked up big time. Embraer saw him coming a mile off and flogged him a dead horse!
personally the person responsible should be one of the ones losing their jobs
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Look, if you're sweating your assets, the dispatch reliability of the E-Jet is a significant factor. If you can get that for approximately the same costs as a Q400, great, no brainer. Customer confidence goes up, more pax carried etc etc. The problem is, Flybe don't sweat their assets.
Join Date: Jan 2005
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One factor about the deal depending on which side of the company you are on, is that there is very little demand for the E175 type rating. HR must be pleased with that.
On line timetable says BE are going daily (excl. Saturdays initially, which starts in December, 2 daily) on SOU-GVA from the start of the W13 schedule.
Presumably an attempt to take on EZY down at BOH who run almost daily (during the ski season)?
Presumably an attempt to take on EZY down at BOH who run almost daily (during the ski season)?
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Flybe may have increased frequency for W14 although still rediculously expensive. Mid Jan for 5 days (3 full days skiing with the family) from Bournemouth is c£250 with Easyjet compared to the same period from Southampton of c£600. When will Flybe learn!! 
