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1. You have asserted that Stobart can afford to give bargain fares away because they own the airport unlike EZY and FR who don't.
2. A franchise fee of 20% of ticket price assumption is pie in the sky. Net margins industry-wide are only 4% +/- 1%.
2. A franchise fee of 20% of ticket price assumption is pie in the sky. Net margins industry-wide are only 4% +/- 1%.
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Flight_mode,
While I agree that the suggested 20% is pie in the sky (and unlikely anybody on this forum knows the true cost), there are cost savings under the flybe brand (or any franchise, like centralised services, res systems, system support staff, marketing team (some direct savings here), some elements of procurement etc. etc. So makes it hard to estimate the likely % cost...but likely to be greater than the typical airline net return....
While I agree that the suggested 20% is pie in the sky (and unlikely anybody on this forum knows the true cost), there are cost savings under the flybe brand (or any franchise, like centralised services, res systems, system support staff, marketing team (some direct savings here), some elements of procurement etc. etc. So makes it hard to estimate the likely % cost...but likely to be greater than the typical airline net return....
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flight_mode, if 20% (in this case £6) is way over the odds, surely that only reinforces my argument that average starting fares aren't too bad at all because of the ancillary income.
I'm not sure that the definition of 'franchise fee' is being being correctly applied in this discussion. The franchise system is widely used in many industries and is basically the fee paid by the franchisee for the right to trade under the franchisor's brand. The fee also covers such things as some marketing, booking system, bulk buying power etc. and, in the case of an airline, yield management algorithm software. Normally a franchise fee is around 10% of the franchisee's turnover but I wouldn't like to guess the actual percentage that Stobart pay to Flybe.
Certainly franchisee's cost savings and increased sales reduce the net cost of the franchise fee but there is no way we can estimate that reduction in this case.
What is certainly true is that Stobart has sources of ancillary revenue, such as car parking and terminal spend that most airlines do not enjoy.
Certainly franchisee's cost savings and increased sales reduce the net cost of the franchise fee but there is no way we can estimate that reduction in this case.
What is certainly true is that Stobart has sources of ancillary revenue, such as car parking and terminal spend that most airlines do not enjoy.
Last edited by Expressflight; 27th May 2017 at 07:44. Reason: redrafted
What is certainly true is that Stobart has sources of ancillary revenue, such as car parking and terminal spend that most airlines do not enjoy.
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Would it be fair to assume that in the olden days all the types of ownership & costings being conducted big style in & out of the Terminal building @ SEN might have been termed robbing peter to pay paul ?......
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Stobart's flights have to eventually show a profit. To suggest that it's ok for the operation to be forever subsidised by extra revenue in and around the terminal is wrong in my opinion.
If the airline running at a loss doesn't matter, then why not have the aircraft do touch and goes all day. Think of the revenue produced in landing fees.
If the airline running at a loss doesn't matter, then why not have the aircraft do touch and goes all day. Think of the revenue produced in landing fees.
I hadn't noticed anyone suggesting that "it's OK for the operation to be forever subsidised by extra revenue .....".
It's obviously helpful though in the early stages where basic fares are being kept low for the ancillary income to be greater than would be the case normally.
I get a feeling this particular debate is rather going round in circles - shall we move on?
It's obviously helpful though in the early stages where basic fares are being kept low for the ancillary income to be greater than would be the case normally.
I get a feeling this particular debate is rather going round in circles - shall we move on?
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I think any notion that the airport subsidizes the airline is for the birds. Their 2017 results reported an EBITDA of £100k from 871,816 PAX. That’s 11p per passenger.
If airports owning airlines and vice versa was a good business model Ryanair (with €4.3bn cash in the bank), EZY, BA, etc. would have been buying airports years ago.
If airports owning airlines and vice versa was a good business model Ryanair (with €4.3bn cash in the bank), EZY, BA, etc. would have been buying airports years ago.
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Weren't Ryanair interested in buying STN a few years back?
Ryanair withdraws from Stansted auction - Telegraph
Anyone know when the apron/taxiway work will be completed?
Ryanair withdraws from Stansted auction - Telegraph
Anyone know when the apron/taxiway work will be completed?
Last edited by tws123; 27th May 2017 at 11:56.
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Expressflight
Quote: "Get a feeling this particular debate is rather going round in circles - shall we move on?"
I don't think we can or should. The synergy created by Sobart in joining together the parts of aviation related activity they control is fascinating. I'm definitely interested in where others think it will end up; very much included in that is your good-self.
Quote: "Get a feeling this particular debate is rather going round in circles - shall we move on?"
I don't think we can or should. The synergy created by Sobart in joining together the parts of aviation related activity they control is fascinating. I'm definitely interested in where others think it will end up; very much included in that is your good-self.
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If airports owning airlines and vice versa was a good business model Ryanair (with €4.3bn cash in the bank), EZY, BA, etc. would have been buying airports years ago.
Brymon owned/operated PLH & NQY airports, the owners of Air UK (B & C Shipping) also owned Servisair (so guess who did all of their handling) as well as an airport or few, anything in AMS is pretty much owned by KLM and so the list goes on!
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Well in this case it's a good idea for an airline to own an airport, or rather perhaps the other way round, either to demonstrate that it's possible to operate from the airport or because not many other people will.
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Ahem ... TBI (that owned Flightline) also owned CWL and Scavsta airports, amongst others, guess where Flightline opted to fuel stop en-route to/from LED one trip and why one of their 146's was registered G-?TBI?.
Brymon owned/operated PLH & NQY airports, the owners of Air UK (B & C Shipping) also owned Servisair (so guess who did all of their handling) as well as an airport or few, anything in AMS is pretty much owned by KLM and so the list goes on!
Brymon owned/operated PLH & NQY airports, the owners of Air UK (B & C Shipping) also owned Servisair (so guess who did all of their handling) as well as an airport or few, anything in AMS is pretty much owned by KLM and so the list goes on!
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tws123
It was initially said, I believe, that Bravo and Charlie would be closed until about the second week of June; would think the same would apply to the apron. Don't know if they're keeping to schedule but when I looked yesterday Bravo seemed to be a bright new shiny concrete taxiway (still closed) and the apron was coming on well. Charlie still has ongoing work and I can't see what's happening there. Let's hope it doesn't overrun by 4 months like the roadworks at Kent Elms on the A127!!
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