EasyJet - 4
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This is starting to go a little off topic now but I just want to clarify this:
This is not just about comparing EasyJet to Legacy carriers based on the level of service they provide. On that basis yes you may be inclined to compare them to legacy carriers, but others will not. Personally I don't rank them much if any higher than FR for the overall service, but that's just a difference of opinion.
This is about EasyJet as a business, the strategy and business model that they adopt. On that basis you can't compare them to legacy carriers, because the way in which the company works is completely different. They don't compete to be more like BA. That is fact!
Now that's not to say EZY cannot compete for BA's passengers and undoubtedly they do that well (evidently by some of the posts on here). The reason why they do that well is because they come across to passengers more like a full-service airline but differentiate themselves through their low-cost business model (which is an internal factor, meaning the typical passenger doesn't see that).
You may be thinking, well what's wrong with that? But the issue is that EZY doesn't operate a completely unique business model therefore it competes with those who also follow that model (which again is based mainly on low costs, speed and efficiency). Now when you look at it like that, FR, W6, DY, VY etc. are the clear competition there. BA, AF, LH much less so.
Notice that you see BA for example upping their game by having to cut costs, when quite contrastingly FR are having to up theirs by improving the service. That means BA having to adapt their model and make cuts within the company (such as having to cut cabin crew costs as SOE points out). FR for example doesn't need to make such drastic internal changes, only building upon the model they have in order to compete more strongly with EZY's product. The result of that is that FR comes across of more of a threat to EZY in the future, hence why I think it's a little worrying that EZY still see legacy carriers as their biggest competition.
This is not just about comparing EasyJet to Legacy carriers based on the level of service they provide. On that basis yes you may be inclined to compare them to legacy carriers, but others will not. Personally I don't rank them much if any higher than FR for the overall service, but that's just a difference of opinion.
This is about EasyJet as a business, the strategy and business model that they adopt. On that basis you can't compare them to legacy carriers, because the way in which the company works is completely different. They don't compete to be more like BA. That is fact!
Now that's not to say EZY cannot compete for BA's passengers and undoubtedly they do that well (evidently by some of the posts on here). The reason why they do that well is because they come across to passengers more like a full-service airline but differentiate themselves through their low-cost business model (which is an internal factor, meaning the typical passenger doesn't see that).
You may be thinking, well what's wrong with that? But the issue is that EZY doesn't operate a completely unique business model therefore it competes with those who also follow that model (which again is based mainly on low costs, speed and efficiency). Now when you look at it like that, FR, W6, DY, VY etc. are the clear competition there. BA, AF, LH much less so.
Notice that you see BA for example upping their game by having to cut costs, when quite contrastingly FR are having to up theirs by improving the service. That means BA having to adapt their model and make cuts within the company (such as having to cut cabin crew costs as SOE points out). FR for example doesn't need to make such drastic internal changes, only building upon the model they have in order to compete more strongly with EZY's product. The result of that is that FR comes across of more of a threat to EZY in the future, hence why I think it's a little worrying that EZY still see legacy carriers as their biggest competition.
Join Date: Aug 2004
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I fear easyJet could be easily wrong footed by Ryanair, who seem now to be on the right track. Ryanair have been talking up 500+ aircraft in 10 years (with easyJet in the 300's), new business/family options, allocated seating and network changes to be more 'business friendly' are all encroaching on the EZY advantage.
Regarding legacy short haul, both AF/KL and LH are launching lower cost offshoots, and it should be more of a level playing field. FR with a lower cost base, competing on the same (or if not similar routes), with more aircraft could possibly stifle both markets.
Regarding legacy short haul, both AF/KL and LH are launching lower cost offshoots, and it should be more of a level playing field. FR with a lower cost base, competing on the same (or if not similar routes), with more aircraft could possibly stifle both markets.
Join Date: Oct 2011
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Yeah and FR have been talking about transatlantic for at least ten year. What is said, and what is reality are often at odds.
They park planes up all over as it is in winter, where are going to park the extra 200 and where are they going to fly more importantly?
F Castro: the hat I believe was a trial by a handful of crew in one base about six months or so ago. As far as I was concerned the trial finished and nothing was heard about the hats. But I spotted a picture of one taken by a passenger last month, so I am really unsure. They look a bit silly.
They park planes up all over as it is in winter, where are going to park the extra 200 and where are they going to fly more importantly?
F Castro: the hat I believe was a trial by a handful of crew in one base about six months or so ago. As far as I was concerned the trial finished and nothing was heard about the hats. But I spotted a picture of one taken by a passenger last month, so I am really unsure. They look a bit silly.
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FR are trying to break into mainline airports - just look at the schedules for STN to Barcelona, Madrid, Rome - they are all multiple per day, and will increase utilisation in the winter, rather than flying to marginal destinations on yield through the off season (French regional routes/summer holiday destinations for example).
Without wanting to appear tribal, I wouldn't treat the number of aircraft FR has on order necessarily as an advantage. Given the overcapacity in the European market (and I don't think we have seen the peak of that yet) having an endless stream of new aircraft could well be a big headache for Ryanair.
The proof will always be in the financial performance of the carriers. Easyjet are currently doing particularly well and have had a stellar performance in recent years. Ryanair may well be adopting the highly successful Easyjet strategy but they are doing so 3 years later and simultaneously have to improve their image. That won't be easy. (No pun intended)
The proof will always be in the financial performance of the carriers. Easyjet are currently doing particularly well and have had a stellar performance in recent years. Ryanair may well be adopting the highly successful Easyjet strategy but they are doing so 3 years later and simultaneously have to improve their image. That won't be easy. (No pun intended)
Join Date: Sep 2012
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Do remember what overcapacity is though. Simply it's where the supply exceeds the demand. But who knows what the demand will be 10 years down the line? It's extraordinarily difficult to predict demand, but let's face it, it's generally going to increase.
That's essentially why they make aircraft orders with both firm orders and options, as it gives them the flexibility of how many aircraft they actually need when there is a clearer vision in terms of the demand.
Ryanair are not going to bang an extra 400 or 500 extra aircraft into the mix. Airlines and particularly FR and EZY as examples do not just make aircraft orders for expansion although that tends to be the primary reason.
They are also used to replace the older aircraft in order to maintain a young fleet age and in the case of the A320Neo and 737MAX, are more fuel and cost efficient than current generation aircraft. FR have even managed to get 8 extra seats on it's new 737MAX series. These aircraft orders essentially allow them to further reduce their cost base.
This allows them to reduce fares which in turn helps to increase demand, a practice known as "price elasticity of demand" for those who weren't already aware, and the aviation industry does tend to be a very price elastic and price sensitive business.
Also take into account that a good proportion of these aircraft will be used to compete and gain market share from other airlines who reduce their schedules or even go bust.
If FR didn't have this huge aircraft order, they wouldn't be able to renew their fleet and reduce their cost base and they'd be losing market share and essentially be in decline.
FR may have a bigger order by number but remember their fleet size of 300 aircraft is already 50% bigger than EZY's 200, give or take a few.
That's essentially why they make aircraft orders with both firm orders and options, as it gives them the flexibility of how many aircraft they actually need when there is a clearer vision in terms of the demand.
Ryanair are not going to bang an extra 400 or 500 extra aircraft into the mix. Airlines and particularly FR and EZY as examples do not just make aircraft orders for expansion although that tends to be the primary reason.
They are also used to replace the older aircraft in order to maintain a young fleet age and in the case of the A320Neo and 737MAX, are more fuel and cost efficient than current generation aircraft. FR have even managed to get 8 extra seats on it's new 737MAX series. These aircraft orders essentially allow them to further reduce their cost base.
This allows them to reduce fares which in turn helps to increase demand, a practice known as "price elasticity of demand" for those who weren't already aware, and the aviation industry does tend to be a very price elastic and price sensitive business.
Also take into account that a good proportion of these aircraft will be used to compete and gain market share from other airlines who reduce their schedules or even go bust.
If FR didn't have this huge aircraft order, they wouldn't be able to renew their fleet and reduce their cost base and they'd be losing market share and essentially be in decline.
FR may have a bigger order by number but remember their fleet size of 300 aircraft is already 50% bigger than EZY's 200, give or take a few.
You come across as being pretty patronising to be quite honest mate. Taking a load of spiel from a GCSE business studies text book and applying it to the conversation we're having doesn't necessarily mean your argument is correct.
Making aircraft orders in a way where you can cap your fleet, expand and plan your fleet in a manner that allows you to decrease your fleet size insulates your airline from the many external factors that can cause a downturn in our industry. Some airlines are doing this whilst also achieving modest expansion.
Making aircraft orders in a way where you can cap your fleet, expand and plan your fleet in a manner that allows you to decrease your fleet size insulates your airline from the many external factors that can cause a downturn in our industry. Some airlines are doing this whilst also achieving modest expansion.
Yeah and FR have been talking about transatlantic for at least ten year. What is said, and what is reality are often at odds.
They park planes up all over as it is in winter, where are going to park the extra 200 and where are they going to fly more importantly?
They replacing current fleet but giving themselves scope for growth.
In 2014 summer they cancelled routes simply because they did not have enough aircraft plus leased in others.
Course in low season there will be aircraft parked............... they not the only one doing this.
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In fact, easyJet themselves will only operate around 25 aircraft from LGW on certain days (Tuesdays and Wednesdays) throughout this Winter, compared to up to 68 throughout the Summer.
Suprising regarding Gatwick, which invites the question what bases on the Easyjet network are least susceptible to seasonality, proportionally between the summer and winter schedules?
When the overcapacity tsunami hits it may well be easyJets options to DECREASE fleet size that assures its position of a stable profit making dividend paying airline.
Once you are past 200 aircraft the economy of scale tails off. History is littered with bankrupt airlines that over expanded and then couldn't survive whatever crisis hit the industry shortly afterwards. And lets be in no doubt that there is always an unexpected crisis around the corner in this industry.
The Norwegians and the Irish can take the role of the Germans and the Russians in WW2 whilst easyJet stays British...
Once you are past 200 aircraft the economy of scale tails off. History is littered with bankrupt airlines that over expanded and then couldn't survive whatever crisis hit the industry shortly afterwards. And lets be in no doubt that there is always an unexpected crisis around the corner in this industry.
The Norwegians and the Irish can take the role of the Germans and the Russians in WW2 whilst easyJet stays British...
Once you are past 200 aircraft the economy of scale tails off. History is littered with bankrupt airlines that over expanded and then couldn't survive whatever crisis hit the industry shortly afterwards. And lets be in no doubt that there is always an unexpected crisis around the corner in this industry..
The Norwegians and the Irish can take the role of the Germans and the Russians in WW2 whilst easyJet stays British..
RE: Southwest. There isn't the same overcapacity problem in the states. In fact they have experienced consolidation in recent years. Overcapacity in Europe will
prove to be potentially fatal for some European carriers. Clearly, having too many aircraft that you cannot fill isn't going to help you survive.
prove to be potentially fatal for some European carriers. Clearly, having too many aircraft that you cannot fill isn't going to help you survive.
RE: Southwest. There isn't the same overcapacity problem in the states. In fact they have experienced consolidation in recent years.
The point made was that after 200 aircraft economy of scale tails off....
I have not seen any study that backs this up. Therefore I am assumming poster either has details of such studies or has made up a number that suits because it is close to Easyjets fleet numbers.
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I fear easyJet could be easily wrong footed by Ryanair, who seem now to be on the right track. Ryanair have been talking up 500+ aircraft in 10 years (with easyJet in the 300's), new business/family options, allocated seating and network changes to be more 'business friendly' are all encroaching on the EZY advantage.
U2 introduced allocated seating a while back, it chases business pax, and it serves major airports (it will eventually will be at LHR).
U2's business model is quite different from FR's, even the new "user-friendly" FR.