Long Haul Low cost out of Stansted true or False?
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Capetonian
I take your point. There was a UK start-up in the late 1980's called Paramount Airways operating (iirc) MD83's on Non-Smoking flights from Belfast & Glasgow!!! Great business plan!!
Can Lo-Cost Long Haul work? Yes it can.Back in the mid-late 1980's I used to 'commute' LGW-MIA with a certain 'New Kid On The Block' that operated 2 old Classic B747's that offered £99 London-Miami, $99 Miami-London.
Shrewd move, Sir Richard, shrewd move.
I take your point. There was a UK start-up in the late 1980's called Paramount Airways operating (iirc) MD83's on Non-Smoking flights from Belfast & Glasgow!!! Great business plan!!
Can Lo-Cost Long Haul work? Yes it can.Back in the mid-late 1980's I used to 'commute' LGW-MIA with a certain 'New Kid On The Block' that operated 2 old Classic B747's that offered £99 London-Miami, $99 Miami-London.
Shrewd move, Sir Richard, shrewd move.
Air Asia fares just prior to dropping the London route after they moved to LGW were very close to the likes of Emirates and Ethiad on the same route (albeit with a stop involved)
It they are serious about returning, it'll be interesting to see how they try to compete with the Middle Eastern carriers.
It they are serious about returning, it'll be interesting to see how they try to compete with the Middle Eastern carriers.
Paxing All Over The World
If you find a carrier who - after using low prices to open a route - keeps the prices low into the future: Make a note and tell the world, because they are going to be unique.
I am not cynical or angry about this, it's just my observation of the world I see.
I sit to be corrected.
I am not cynical or angry about this, it's just my observation of the world I see.
I sit to be corrected.
Thread Starter
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PAXBoy
Surely Southwest, Ryanair and Easyjet answer your question regarding starting low cost and carrying on with such model, I grant you they are on a regional level rather than transcontinental level as attempted by Oasis Hong Kong, and Air Asia X..
Do correct me if am wrong on the above as I always don't mind being corrected its the only way an old fart like me can still learn without going to University, unless O Levels rather than A levels are still respected in this industry
Many safe landings
WA
Surely Southwest, Ryanair and Easyjet answer your question regarding starting low cost and carrying on with such model, I grant you they are on a regional level rather than transcontinental level as attempted by Oasis Hong Kong, and Air Asia X..
Do correct me if am wrong on the above as I always don't mind being corrected its the only way an old fart like me can still learn without going to University, unless O Levels rather than A levels are still respected in this industry
Many safe landings
WA
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wannabe
Usual story is --- there's a world price of jetfuel.For short haul, fuel is 40% of total cost so if Loco cost per passenger km of everything other than fuel like planes, staff, airport fees is 50% of full service carriers cost per pass km, that gives you a 30% margin to work with relative to the competition. That's enough of a window to get in and stay in the market. So SW, RYR and Easy made it work for them.
Long haul, fuel is 70% of total cost, time zones and speeds mean it's difficult to improve on plane productivity, no equivalent to four rotations/day effect, so margin to full service unlikely to be more than 10%. That may not be enough given the perceived advantages of the incumbents.
Will be fascinating to see if Norwegian, Air Asia etc can make it work for them. Obviously if fares are £1000, even 10 per cent is appreciable if its your own money. That's in their favour relative to the regional market.
Usual story is --- there's a world price of jetfuel.For short haul, fuel is 40% of total cost so if Loco cost per passenger km of everything other than fuel like planes, staff, airport fees is 50% of full service carriers cost per pass km, that gives you a 30% margin to work with relative to the competition. That's enough of a window to get in and stay in the market. So SW, RYR and Easy made it work for them.
Long haul, fuel is 70% of total cost, time zones and speeds mean it's difficult to improve on plane productivity, no equivalent to four rotations/day effect, so margin to full service unlikely to be more than 10%. That may not be enough given the perceived advantages of the incumbents.
Will be fascinating to see if Norwegian, Air Asia etc can make it work for them. Obviously if fares are £1000, even 10 per cent is appreciable if its your own money. That's in their favour relative to the regional market.
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Surely Southwest, Ryanair and Easyjet answer your question regarding starting low cost and carrying on with such model, I grant you they are on a regional level rather than transcontinental level as attempted by Oasis Hong Kong, and Air Asia X..
I'm with the cynics on this, although I'd like to be proved wrong, not that I would use a LCC for longhaul, but plenty of people would be happy to do so.
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Come Back SILVERJET
Excellent service, and great price.
Luton was a great base for their service.
And still could be.
Long Haul LCC are starting from LON to Philippines.
Air Asia stand a good chance too.
Bring Back OASIS while you are at it.
Glf
Luton was a great base for their service.
And still could be.
Long Haul LCC are starting from LON to Philippines.
Air Asia stand a good chance too.
Bring Back OASIS while you are at it.
Glf
DADDY OH - Of course Paramount was a charter airline and not scheduled, yes it was a great business plan, which parts did you enjoy most? I hope you liked the parts I wrote, I have a copy if you wish to refresh your view of the details.
Arguably Paramount may still have been around today had the then Chairman not run off with all the money!
Arguably Paramount may still have been around today had the then Chairman not run off with all the money!
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Norwegian will not up sticks and move to STN or anywhere else, the company are very very pleased with their LGW operation which has exceeded all expectations at this stage and I'm told long haul is selling really well.
It is too early to say that they have made long haul work, but despite all the dreamliner problems and the negative press associated with it, it seems to be doing very well, the 2013 financials are out in a few weeks so we will see.
The question is when does short haul become long haul from a passengers point of view? Norwegian already operate some of the longest 738 sectors in the world (OSL/DBX & TOS/LPA) to name a few, with block times of 7 hours, yes they are limited to around 155-160 seats, but the 737MAX will likely see that increase to full or 8 - 9 hours and if you fly long haul in Y class then whats the difference ?
Loading catering for a full flight and giving the food away/then throwing 20% in the bin is wasteful
If Norwegian prove the concept, then many will follow, there is for now a world of difference between a FR LoCo flight and a NAS one, thats one of the reason they've been successful at LGW amidst the sea of Orange.
It is too early to say that they have made long haul work, but despite all the dreamliner problems and the negative press associated with it, it seems to be doing very well, the 2013 financials are out in a few weeks so we will see.
The question is when does short haul become long haul from a passengers point of view? Norwegian already operate some of the longest 738 sectors in the world (OSL/DBX & TOS/LPA) to name a few, with block times of 7 hours, yes they are limited to around 155-160 seats, but the 737MAX will likely see that increase to full or 8 - 9 hours and if you fly long haul in Y class then whats the difference ?
Loading catering for a full flight and giving the food away/then throwing 20% in the bin is wasteful
If Norwegian prove the concept, then many will follow, there is for now a world of difference between a FR LoCo flight and a NAS one, thats one of the reason they've been successful at LGW amidst the sea of Orange.
I can tell you exactly how Paramount started, there was a demand based largely Owners Abroad charter programme from Bristol and Cardiff and the hole was going to be filled by a proposed new Cardiff based charter airline. To fill in the programme some flights were being operated ex SEN as well with a proposed Boeing 737-300 but it all went wrong for a number of reasons. John Faraday and his team stepped in to pick up the pieces and the name Paramount was chosen at dinner in a pub in Haywards Heath, the main consolidator and commercial arm at the start was Viking International who also owned the Unijet Group (later bought by First Choice)... sorry OP for the thread drift!
Why not Long Haul low cost from Stansted, you wont get me on a low cost long haul with 30" seat pitch but I am sure many will be willing and it isn't that the catchment area is lacking?.
Why not Long Haul low cost from Stansted, you wont get me on a low cost long haul with 30" seat pitch but I am sure many will be willing and it isn't that the catchment area is lacking?.
Paxing All Over The World
wannabe-aviator Yes, I was referring to long haul low cost, due to the thread title, despite the thread drift!
For example, I recall the full service carrier Virgin Atlantic opening service to South Africa and all the words about fares coming down. In the early days - but they soon found what BA and SAA knew, that the JNB + CPT run is a cash cow. I am a fan of VS and they must charge what the market will bear. and the way that FR makes it's money is well known and EZ (naturally) push fares up as much as they can. We all know that fares are too low and the entire airline world is on thin ice - I include airports and manufacturers in that. (A sweeping statement I know, but the cost of air travel is very low)
LNIDA
Good question!
For me, the figures are: 4~6 hours = Medium, over 6 = Long and that is 'wheels to wheels' which is essentially LON~NYC etc. However, there are many factors to consider before selecting a carrier:
For example, I recall the full service carrier Virgin Atlantic opening service to South Africa and all the words about fares coming down. In the early days - but they soon found what BA and SAA knew, that the JNB + CPT run is a cash cow. I am a fan of VS and they must charge what the market will bear. and the way that FR makes it's money is well known and EZ (naturally) push fares up as much as they can. We all know that fares are too low and the entire airline world is on thin ice - I include airports and manufacturers in that. (A sweeping statement I know, but the cost of air travel is very low)
LNIDA
The question is when does short haul become long haul from a passengers point of view?
For me, the figures are: 4~6 hours = Medium, over 6 = Long and that is 'wheels to wheels' which is essentially LON~NYC etc. However, there are many factors to consider before selecting a carrier:
- Actual time in the seat (inc boarding, taxi time etc.)
- Time zones crossed
- Time of day for the sector
- Holiday/work
- If holiday, is it going to be a restful one so you don't mind being a little cramped, or active and you need to be 'good to go'.
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longhaul low cost
Until a few years ago, the so-called "legacy" carriers were offering some very cheap fares "down the back" on trunk routes outside the peak periods, e.g from LHR on the likes of BA, VS or equivelants: JFK £200, YYZ £280, CPT £500, HKG £300, etc.. This must have had on an impact on longhaul "no-frills" operators as these were without extras.
Regretably, those days appear to be over, so the longhaul "no-frills" operators may stand a better chance this time around.
Regretably, those days appear to be over, so the longhaul "no-frills" operators may stand a better chance this time around.
People express? They were among the first and they started from a SH operation. Why did they fail?
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Until a few years ago, the so-called "legacy" carriers were offering some very cheap fares "down the back" on trunk routes outside the peak periods, e.g from LHR on the likes of BA, VS or equivelants: JFK £200, YYZ £280, CPT £500, HKG £300, etc.. This must have had on an impact on longhaul "no-frills" operators as these were without extras.
Regretibly, those days appear to be over, so the long haul "no-frills" operators may stand a better chance this time around
Regretibly, those days appear to be over, so the long haul "no-frills" operators may stand a better chance this time around
I think we can guarantee any budding Long Haul Flexible Fares (Wrongly called LCC - thats a business model not a price/ticketing system) carrier would find the competing legacies dumping their excess economy seats at pretty competitive rates rather swiftly - to ensure those new guys go out of business - One thing those legacies all have (even through they book losses) is huge cash reserves and can wait out 18 months before the market corrects to support their normal practises !
Heres the thing by similar logic those very legacies already have to dump quite a few of those Economy seats at pretty competitive rates where over capacity already exists - Notably LHR-JFK !
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where over capacity already exists - Notably LHR-JFK !
What killed People Express was having no revenue management system. American came to market with lead in low fares as well as their usual high margin fares. PeopleExpress could only compete on the fares so were selling more and more lowest fares where American were selling only the lowest fares they needed to whilst matching PeopleExpress on entry level pricing. The lack of complexity at the loco meant they didn't actually know when they could sell at a higher margin and get away with it. This is why revenue management is crucial.
There's a fine line between niche and over-reach, like Air Florida, ValueJet, PeopleExpress etc
Last edited by Skipness One Echo; 21st Jan 2014 at 10:36.
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Good point but it does have plus points. The airlines manage to fill the seats at the front and make a lot of money leaving a very good deal for normal people not on expenses down the back.
What BA/AA probably need if they want to play the frequency and premium game (With the required last minute flexible flight change requirements) are a fleet of very very premium heavy 788s with perhaps under hundred at the back of the bus specifically for this route !
Lets see 7 flights a day plus one spare - 8 would suffice.
It clear BA have been trying to manage the excess Y capacity some on those high J models - Just 177 economy seats on some of those 744s !
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What killed People Express was having no revenue management system. American came to market with lead in low fares as well as their usual high margin fares. PeopleExpress could only compete on the fares so were selling more and more lowest fares where American were selling only the lowest fares they needed to whilst matching PeopleExpress on entry level pricing. The lack of complexity at the loco meant they didn't actually know when they could sell at a higher margin and get away with it. This is why revenue management is crucial.
Those algorithms and matrices employed mean that they achieve maximum revenue most of the time and also mean some customers may pay more than on a legacy !