Spot the difference between legacy and LoCo

[racedo]

Has a very significant impact on Corporation Tax

None at all.

Understand where you coming from

Depreciation policy is set by Board of directors of a company and they can set whatever policy they like........................therefore management would do everything they could to ensure high or low profits by saying Aircraft will last 25 years or 1 year and Laptops 10 or 6 months so higher / lower profits shown and they get bigger bonuses or pay less tax .

However Govts want to avoid companies doing this as would mean no idea what tax they could collect PLUS they want to incentivise businesses to invest in new technology / equipment / buildings etc as this helps the economy grow. #
So for tax calculation Depreciation is added back to profits and then the Govt give a Capital Allowance over a number of years depending of what has been invested in.

A tax accountant friend explained this down the pub over a long beer or least it felt like that............................then he said thats how he and his colleagues make money by interpreting WTF the Govt are doing on tax.

[Airbourne-Adamski]

Easy to tell the Locos from the legacys.

Go into the terminal .

Passengers with no baggage, a bag from mc donalds, a tin of drink in their hands and a copy of the Sun are on loco's.

Those with baggage, having a latte and reading a copy of the times with a seat number are not.

I am presuming this was a comment made as a joke??????

If not then you are poorly mis-led and stero typing. I would challenge you to watch the easyJet check-in desks at LGW and the passenger profiles who check in. then see if your views are right.

[Zag23]

Airbourne-Adamski

I see your operation was a complete success.

[Fairdealfrank]

Quote: "Had Easyjet/Ryanair been able to get access to LHR like they have at Barcelona, Schiphol and Paris then they might have put more pressure on BA short haul."

It's not a question of ability "to get access to LHR", both U2 and FR can afford to buy slots at LHR, but perhaps not in the quantity they require.

They choose not to for three reasons:
(1) the costs of slots can be better used to offer lower fares;
(2) they don't need to be at LHR to take on BA and BD (previously);
(3) congestion and delays at LHR are an obstacle to no-frills type operations: they cannot do 25 minute turnarounds for example, constraints that do not apply at AMS and BCN.


Quote: "MOL's view was some time ago that we will have more consolidation and Europe will have 1 or 2 big (legacy) carriers, plus Ryanair and Easyjet."

Yes, it was to be FR and U2 for the no-frills, and BA (now IAG), AF-KL and LH group for the legacies.

Persumably, at the time, FR envisaged taking over EI.

His predicted "bloodbath" (sic) hasn't happened and probably won't.

[Fairdealfrank]

hub-and-spoke v. point-to-point

With the blurring of the boundaries between legacy and no-frills, there is only one fail-safe way to tell the difference: the operation of a hub-and -spoke v. pure point-to-point.

Legacy carriers provide interlining and through ticketing on their own flights, on those of it's "parner" airlines, and competitors in general, and baggage can be checked through to the final destination.

This is not the case on no-frills operators where two connecting flights, even on the same carrier, are two separate contracts, and baggage has to be collected and then dropped off again (hence no protection for missed connections, etc.).

[Peter47]

I believe that US legacy carriers have downgraded their product so much that they cannot differentiate themselves from the LoCos. Southwest & JetBlue arguably offer a better product. (Spirit & Allegiant model themselves on Ryanair). Its interesting how this seems to be the opposite to most other industries which are moving in the other direction. It would be interesting whether one of the 'Big 3' (assuming that AA / US merge) could charge a small premium for a better product.

In carriers airlines such as BA, LH, LX & KL still differentiate themselves but LH are following BA in withdrawing from or spinning off short haul services from non hub airports. LX only has small operations at GVA & BSL. BA & KL are charging extra for baggage for low cost SH point to point tickets. How long until others follow?

One commentator has pointed out is that the great thing with Ryanair is that it has forced the legacies to reduce their fares so that you don't actually have to fly FR (perish the thought) to benefit from them (as long as you live in London).

Whilst some of the difference in price structure is to due to service standards which will be reflected in the ticket price and some from flying from congested hubs - necessary to attract transfer traffic - much is due to the need to overnight aircraft. You need to provide hotels & expenses for two sets of crews to overnight one aircraft away from a crew base. How much would be saved if the legacy carriers outsourced to a company like easyJet with local crews at most bases? (I dare say that there would be a few staff issues to consider!) At LAX SkyWest provides codeshare services for three separate airlines with a separate operation for each. Could this be the way ahead or a step too far for Europe?

[PAXboy]

The only certainty in the European airline world is more consolidation in the next ten years and no one is safe.

Peter47 mentions the changes in the USA but you can easily list the ex-carriers who had it worked out - until times changed (PanAm/TWA/Eastern and all the rest). Over time, the small grow bigger. Then they get Big. And then they over reach themselves ...

As has been discussed in other threads talking about the major UK airline that is now well into it's mature years - list the companies that are still big AND comanding their market AND are 100 years old. Not just in airlines but all commerce? It's a rule of thumb that very few are able to break.

[EI-BUD]

His predicted "bloodbath" (sic) hasn't happened and probably won't.

One for debate, and I suppose the precise definition of bloodbath, but the sheer decline in the number of airlines in the EU has been big over the last few years.

EI-BUD

[Fairdealfrank]

Quote: "One for debate, and I suppose the precise definition of bloodbath, but the sheer decline in the number of airlines in the EU has been big over the last few years.

EI-BUD"

Agreed, there has and will be consolidation.

Perhaps a slow bleed rather than a bloodbath?

Don't think it will ever be a case of just 2 no-frills and 3 legacy carriers in Europe.

[1DC]

storminVery glad to see your post Stormin, which I agree with. Hope you are keeping ok..

[racedo]

Quote:

His predicted "bloodbath" (sic) hasn't happened and probably won't.
One for debate, and I suppose the precise definition of bloodbath, but the sheer decline in the number of airlines in the EU has been big over the last few years.

I agree and despite lots of names of airlines around there are not many solely independent ones.

[PAXboy]

Take a new business - such as railroads:

1. One brave company starts and goes bust
2. The bits get picked up, sometimes by govt of the day because of employment or money or other factors
3. New companies start up and regulation starts
4. Many new companies start up so more regulation
5. Time goes by with a few mergers and a few start ups and failures
6. More regulation
7. You are now a parent and tell your children that you have seen this behaviour before
8. The country goes through a very bad slump/depression so more closures and mergers
9. Govt of the day may well decide to nationalise or, at the very least, regulate a great deal more
10. Time goes by with a few mergers and a few start ups and failures all aimed to 'make the industry more efficient and blah blah'
11. Govt of the day may well decide to privatise or, at the very least, change the regulations considerably which is re-regulation but billed as de-regulation
12. Time goes by with a few mergers and a few start ups and failures
13. Continue the loop until you are a grandparent and tell the little ones that you have seen this behaviour before
14. You die
15. The loop continues ...

Does any of this sound familiar?
Humans like to call it 'progress'

[nivsy]

Certainly the gap between low Cost and Legacy has diminished. Indeed the latest offerings from BA Gatwick of a cost with or without bags is a proving point plus naturally EZY have now intoduced allocated seats and the days of the scrum should have gone. Other things I have noted - well obviously (for the likes of EZY against BA out of LGW - newer, cleaner aircraft. A tendancy to depart on schedule or ahead of schedule form various airports has also been experienced. Sure there can be issues with low cost if in transit however it is interesting that actually the airport of Milan Malpensa is thrying to deal with that to ensure seamless LCC to LCC transfer. This could be the way forward....

Nivsy.

[neil_2008]

This is an interesting debate however one can't help looking at the legacy charter operators in the same breath. Maybe as a result of having the life squeezed out of the short haul sun routes to France & Spain (certainly in the competitive South-East corner) the traditional holiday companies have reacted by steadily increasing the cost of traditional charter flights to slightly further afield destinations.

Its now ironic that you can fly cheaper with a traditional flag carrier or similar via a hub than it costs to fly point to point with a charter operator (operating as a 'low cost' carrier) to those mid - long haul destinations.

All of this I'm convinced is relatively short term, under 30's today with new families are less reliant on travel agents and holiday companies as their parents were, also with comparison tools online becoming the norm in searching for travel options this exploitation of the traditional holiday maker is surely not sustainable.

[easyflyer83]

You could argue that the very same point to point charter flights have actually improved in many ways compared to how they once were. i.e all economy 757's and later 767's.

Take the TOM product for instance. PTV's, meals are still served, seat pitch isn't bad plus a premium economy style cabin for those who want to pay for it. For your average leisure passenger travelling in economy there really isn't that much difference.

Give me the legacy via a hub any day as I like to clock up the airlines and aircraft types but quite frankly you average punter doesn't give a sh*t. Long haul, many still want the frills but the kudos of flying the legacy's just isn't there anymore. There is still a bit of residual 'wow-ness' for those flying Virgin for the first time to see Mickey Mouse but even the Virgin innovation aspect has faded over the years.

[LNIDA]

FairdealFrank not always

Norwegian are by any measure a low cost airline and they through ticket on many routes,even with hold luggage, in fact if you check out their website you will see that you can select either direct or connecting routes.

You of course pay for food and drink and they make big play that they don't need to give you a free newspaper because they provide free WiFi on board so you can surf/read what you want

They also shortly to start long haul flights, so the gap gets ever closer

[racedo]

All of this I'm convinced is relatively short term, under 30's today with new families are less reliant on travel agents and holiday companies as their parents were, also with comparison tools online becoming the norm in searching for travel options this exploitation of the traditional holiday maker is surely not sustainable.

I know few parents with kids who have booked a package holiday in the last 3 years but I know lots who have booked flights, accom and car hire separately.

The ability to come and go from different airports has been important for some as more than a few have started in one airport and have no wish to backtrack to arrival airport or even departing airport particularly in South East.

Flying into Madrid and departing from Santiago or into Rome and flying from Naples or into Nice and back from Pisa opens up lots of different opportunities that people exploiting.

[PAXboy]

A friend of mine works in a small, traditional travel agency. They are in the High Street of a prosperous town in the Home Counties where many commute to London. They continue to do great business - with the over 50s. They know they are in a terminal business.

Taking a 10 day break with friends in late May to the Canaries, we:

• searched property rental sites
• checked out locations on G Earth
• read information from reccomendation sites - which we mostly discounted as we had no means of verifying statements and went with gut instinct
• we could see availability and communicate direct with the agent or owner
• this lead us to drop the first villa owner when we did not like their response.
• booked flights with different carriers for the out and back
• researched abd booked car hire
• co-ordinated all this between ourselves and the property owners through email and SMS
• payment by credit card and transfers within the group by direct bank txfer completed online
• When I need euros, I will get them at the Post Office or delivered by my bank (or collect) that will depend on the rates that I will check (where else?) online

Simples

[Phileas Fogg]

Some of the legacy airlines have what might be commonly referred to as "open jaw returns", namely fly out to one airport and fly back from another.

Most recently I used an open jaw return with Air France KLM, and because the fare was some £200 cheaper routing via CDG rather than direct from AMS to SIN I routed, on the outbound, CWL/AMS/CDG/SIN with AF and I returned MNL/AMS/CWL with KL and all on a cheap (ish) economy return.

[Phileas Fogg]

Passengers with no baggage, a bag from mc donalds, a tin of drink in their hands and a copy of the Sun are on loco's

I doubt one will find many copies of the Sun in the LPL terminal ... Unless things have changed the Sun is banned for life on Merseyside following their antics in the wake of the Hillsborough disaster.