Flybe - 7
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Its a commercial loan that must be payed back to the Welsh government! Just like getting a loan from any bank, any airport can do it. The airport should be free to do what they want with it, just like Bristol, Gatwick or any other airport taking out a bank loan to aid expansion.
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Good luck CWL you're going to need it, Flybe frequently open and shut routes and bases and seemingly have no loyalties where airports are concerned. Their route planning is akin to pin the tail on a donkey after vodka shots and as a whole they remind me of a beached whale, breathing but directionless. And before I get derided as a hater, I regularly use Flybe, like their product and have never experienced any problems. I just get frustrated that since their 'strategic review' they appear to have lost the plot in many areas.
How is it known that its a loan on commercial terms, and what are the terms of the payback? Different environment, but student loans are loans....and I think we all know what proportion of those get repaid!! This has all the hallmarks of state aid, particularly from an administration which has already played fast and loose with EU rules before now by awarding a PSO to an organisation which wasn't an AOC holder, in the first award to Manx2!!
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Looks like Eastern Airways have drawn first blood and won the battle. As Flybe.com are dropping the Leeds - Aberdeen link at the end of this month.
Good news is that from the start of the summer 2015 schedule the "flyshuttle" will continue operate up to 3x daily linking just Jersey-Southampton-Leeds.
Good news is that from the start of the summer 2015 schedule the "flyshuttle" will continue operate up to 3x daily linking just Jersey-Southampton-Leeds.
Last edited by LBIA; 5th Mar 2015 at 20:22.
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In the EU, a commercial-rate loan from Government can still be considered as illegal state aid if a rational private investor would not have made the same investment on a raw financial basis, or if the loan distorts market competition.
As an example of the thinking involved:
http://www.mwe.com/European-Commissi...a-f0bb5170ab6d
Would you, as a market-wise private-sector airline investor, have made the loan to FlyBE? Discuss, with reference to previous attempts to establish routes out of Cardiff.
As an example of the thinking involved:
http://www.mwe.com/European-Commissi...a-f0bb5170ab6d
Would you, as a market-wise private-sector airline investor, have made the loan to FlyBE? Discuss, with reference to previous attempts to establish routes out of Cardiff.
Join Date: Aug 2007
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No loans have been made to flybe. The Welsh Government, as shareholder, made a loan to Cardiff Airport. Cardiff Airport has entered into a commercial agreement with flybe, as they could have done with any other airline that wants to fly from Cardiff.
Runway30, I'm honestly not sure if you are choosing not to get the line of debate here or genuinely don't see it. Whether an intermediary, in the form of Government-owned Cardiff Airport, is involved or not, the money is still Government funding. It could even be construed as such if an airline went to an independent bank and borrowed the money but the Government or airport owned by said Government guaranteed the loan.
Whichever way you cut it, it's taxpayer dosh. If you are as familiar with the arrangements as your postings imply, can you tell us how much is involved, then everyone can make their own judgement as to whether this passes the commercial sanity test?
Whichever way you cut it, it's taxpayer dosh. If you are as familiar with the arrangements as your postings imply, can you tell us how much is involved, then everyone can make their own judgement as to whether this passes the commercial sanity test?
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- Can it be shown (as El Bunto says) that a market economy investor (a private investor interested only in getting a return on his investment, and not caring about broader social, societal or economic impact) would reasonably have made a similar loan on similar terms?
- And can it be shown that the deal that CWL has made with flybe delivers incremental profitability for the airport?
)
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Before this goes further, can you please all ask yourself one question.
Do you have proof that any of the loan money or "state aid" as you insist on calling it, was even handed out to flybe? Theres a possibility it was, but theres no actual gurantee unless anyone has access to the books. We should all wait until sufficient evidence comes to light instead of speculating.
Do you have proof that any of the loan money or "state aid" as you insist on calling it, was even handed out to flybe? Theres a possibility it was, but theres no actual gurantee unless anyone has access to the books. We should all wait until sufficient evidence comes to light instead of speculating.
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There are two important principles here
1) debt neutrality - can a competitor airport borrow money at the same rate of interest that Cardiff Airport is paying the Welsh Government?
2) obtaining a commercial rate of return - over the ten year term of the agreement will Cardiff Airport make an overall profit regardless of how much money is given to flybe as start up aid?
1) debt neutrality - can a competitor airport borrow money at the same rate of interest that Cardiff Airport is paying the Welsh Government?
2) obtaining a commercial rate of return - over the ten year term of the agreement will Cardiff Airport make an overall profit regardless of how much money is given to flybe as start up aid?
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Gay friendly - I usually read your posts with interest as I do with OltonPete's however you are starting to sound a little bitter and like an old groaner. The routes have gone from BHX and its time to accept it. Who knows the routes they have proposed for STN and BOH may work, they may not. But that's not unique to Flybe.
I remember TOM opening DSA and CVT in a big fan fair. That didn't go to plan. Monarch did W flights through NQY and BLK. That didn't last. It's all about trying it out and if future bookings are low but there is an opportunity to use the planes elsewhere (even must an extra EDI that would make money) they will do that.
Good luck to CWL and lets see what happens.
I remember TOM opening DSA and CVT in a big fan fair. That didn't go to plan. Monarch did W flights through NQY and BLK. That didn't last. It's all about trying it out and if future bookings are low but there is an opportunity to use the planes elsewhere (even must an extra EDI that would make money) they will do that.
Good luck to CWL and lets see what happens.
Cyrano - while I support your line of thinking, the last time I complaine to the EU about state aid, I received a polite letter saying the EU accepts complaints only from people or rival companies who can show some sort of likely loss or detriment to their business. Joe Public's anger about waste of taxpayer funds doesn't count as reason for a complaint to be listened to... if a complaint is to be addressed, it'll need to come from BRS or BHX airports or Cityjet/Eastern...
Gay friendly - I usually read your posts with interest as I do with OltonPete's however you are starting to sound a little bitter and like an old groaner. The routes have gone from BHX and its time to accept it. Who knows the routes they have proposed for STN and BOH may work, they may not. But that's not unique to Flybe.
I remember TOM opening DSA and CVT in a big fan fair. That didn't go to plan. Monarch did W flights through NQY and BLK. That didn't last. It's all about trying it out and if future bookings are low but there is an opportunity to use the planes elsewhere (even must an extra EDI that would make money) they will do that.
Good luck to CWL and lets see what happens.
I remember TOM opening DSA and CVT in a big fan fair. That didn't go to plan. Monarch did W flights through NQY and BLK. That didn't last. It's all about trying it out and if future bookings are low but there is an opportunity to use the planes elsewhere (even must an extra EDI that would make money) they will do that.
Good luck to CWL and lets see what happens.
What people, especially on some of these threads, fail to understand is that the old days of allowing a route development period of 1 - 2 years, during which losses are budgeted for, are long gone.
We live in a far more short-termist world, where if a route isn't performing in terms of yield within a season it's pulled. Ryanair are past masters at this, FlyBe are too now. Personally I doubt that all the recently announced adventures into CWL / BOH / STN will pass the profitability test but we shall see.
Armchair pundits (of which I would count myself as one) simply have to accept this business model and get over it when "their airport" has routes launched, then chopped - it's going to keep happening!
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It's interesting to see Flybe are going into CWL, and I wish them well. CWL has, historically, been a bit of a graveyard for Regional Airlines over the last 15 - 20 years.
Their share price has been dismal over the last 12 months and am sure that the investors, are getting frustrated about the lack of positive progress and Flybe's financial statement in January, did nothing to please them, in fact quite the reverse, following all the redundancies, the rebranding of Flybe into the purple way, along with all the hype, the only reason Flybe are still in business, is probably due to the £150 million the CEO, secured from the city a year ago and managed to persuade them, that this Company was one in which to invest and the past was behind them and moving forward and I think Saad Hamaad deserves credit for securing that deal. Touring the bases following the restructuring announcement, with senior management, dressed in some bizarre costumes along with a Mexican band beggared belief. However, he is the new man at the controls, and running the airline, that was his decision, one assumes.
The fact Flybe has a number of 195's sitting on the ground, costing some £26 million a year is not helping and therefore, I rather suspect, that the current CEO has ordered his commercial team, to do something " visible " to pacify the frustrated investors, hence the decision to base two aircraft at CWL, which appears to be sponsored by The Welsh Development Agency, so I would imagine, the cost to Flybe is probably minimal. It's a curious decision, because, Flybe has always maintained, that it was uneconomic to have two stand alone airframes in a base. I also think, Flybe's route planning does appear somewhat haphazard, almost akin to pining the " tail on the donkey " after a night at the Jug and Claret. Sure, I think it's better to use the grounded jets to do something, but the investors are not stupid, they need to see results, before their patience runs out, once the £150 million has been spent, I don't really know where Flybe go to get more cash, to keep the business solvent. I think the next 12 months or so will be the deciding factor, whether this Company is still in business - I hope they survive and my doubts about their survival are proved wrong and that all the loyal employees ultimately enjoy some reward, which the new directors received with their " Golden Hello's, Huge Salaries and Share Incentives "
Their share price has been dismal over the last 12 months and am sure that the investors, are getting frustrated about the lack of positive progress and Flybe's financial statement in January, did nothing to please them, in fact quite the reverse, following all the redundancies, the rebranding of Flybe into the purple way, along with all the hype, the only reason Flybe are still in business, is probably due to the £150 million the CEO, secured from the city a year ago and managed to persuade them, that this Company was one in which to invest and the past was behind them and moving forward and I think Saad Hamaad deserves credit for securing that deal. Touring the bases following the restructuring announcement, with senior management, dressed in some bizarre costumes along with a Mexican band beggared belief. However, he is the new man at the controls, and running the airline, that was his decision, one assumes.
The fact Flybe has a number of 195's sitting on the ground, costing some £26 million a year is not helping and therefore, I rather suspect, that the current CEO has ordered his commercial team, to do something " visible " to pacify the frustrated investors, hence the decision to base two aircraft at CWL, which appears to be sponsored by The Welsh Development Agency, so I would imagine, the cost to Flybe is probably minimal. It's a curious decision, because, Flybe has always maintained, that it was uneconomic to have two stand alone airframes in a base. I also think, Flybe's route planning does appear somewhat haphazard, almost akin to pining the " tail on the donkey " after a night at the Jug and Claret. Sure, I think it's better to use the grounded jets to do something, but the investors are not stupid, they need to see results, before their patience runs out, once the £150 million has been spent, I don't really know where Flybe go to get more cash, to keep the business solvent. I think the next 12 months or so will be the deciding factor, whether this Company is still in business - I hope they survive and my doubts about their survival are proved wrong and that all the loyal employees ultimately enjoy some reward, which the new directors received with their " Golden Hello's, Huge Salaries and Share Incentives "
Last edited by Flatspin Fumble; 6th Mar 2015 at 15:53. Reason: Typo
Join Date: Jan 2006
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Cancelled routes
Cloud1
I agree the routes have gone and it is best to move on but I had my moan to the CEO and I got a reasonable reply from the COO - PR speak of course and I expected no better but at least he had time to reply to probably to what he thought was a crackpot.
What I think got some BHX locals mad was why were some flights put on sale for summer 16 when all the yield data for summer 15 and most of winter 15/16 would have been available so what changed? One poster on another forum had eight flights cancelled from two withdrawn routes which is probably at the extreme end but nonetheless inconvenient to say the least.
Incredibly BHX has lost 11 routes but no aircraft! This again contradicts one of their statements of better aircraft utilisation - if you take a look at the BHX schedule, the winter utilisation was good but summer is nowhere near as tight, which is probably good in one way. So it is not a case of removing aircraft making better use of your assets and tightening the utilisation.
One Dash starts it flights at 15.05, a 175 sits on the ground for four hours from mid morning, another has a three hour turnaround time. There are no second wave Dash 8 flights from BHX on Monday, Wednesday and Fridays until the extra Jersey starts in June and one BHD 175 flight changes to a Dash 8.
Of the routes withdrawn you could see that there were issues with 8 or 9 of them but the worrying aspect is the Toulouse and Waterford which were both Dash 8 flights with high load factors, no competition and decent fares (Waterford slightly softer in winter) and they couldn't make money.
Share price yesterday was down on the Thursday night price but 3.5p better than the start of the week.
Deano777
Re the 195 - Thank you, all back to normal the 195 is once again showing on BHX-CDG including my flights.
Pete
I agree the routes have gone and it is best to move on but I had my moan to the CEO and I got a reasonable reply from the COO - PR speak of course and I expected no better but at least he had time to reply to probably to what he thought was a crackpot.
What I think got some BHX locals mad was why were some flights put on sale for summer 16 when all the yield data for summer 15 and most of winter 15/16 would have been available so what changed? One poster on another forum had eight flights cancelled from two withdrawn routes which is probably at the extreme end but nonetheless inconvenient to say the least.
Incredibly BHX has lost 11 routes but no aircraft! This again contradicts one of their statements of better aircraft utilisation - if you take a look at the BHX schedule, the winter utilisation was good but summer is nowhere near as tight, which is probably good in one way. So it is not a case of removing aircraft making better use of your assets and tightening the utilisation.
One Dash starts it flights at 15.05, a 175 sits on the ground for four hours from mid morning, another has a three hour turnaround time. There are no second wave Dash 8 flights from BHX on Monday, Wednesday and Fridays until the extra Jersey starts in June and one BHD 175 flight changes to a Dash 8.
Of the routes withdrawn you could see that there were issues with 8 or 9 of them but the worrying aspect is the Toulouse and Waterford which were both Dash 8 flights with high load factors, no competition and decent fares (Waterford slightly softer in winter) and they couldn't make money.
Share price yesterday was down on the Thursday night price but 3.5p better than the start of the week.
Deano777
Re the 195 - Thank you, all back to normal the 195 is once again showing on BHX-CDG including my flights.
Pete