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Flybe-9

Old 18th Nov 2018, 09:36
  #921 (permalink)  
 
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I think you are missing my point that airlines and small airports are subsidied by the EU.

Airlines such as Flybe are recipients of this money as are the marginal east coast airports.
Remove O and G plus EU subsidies and airlines such as Flybe and Eastern have big bottom line problems.
Our research shows that over the past 10 years government agencies have spent £80m on helping private enterprise to increase the number of flights. Airports in the UK are – or are supposed to be – commercial operations. Airport companies build them then recoup their money by leasing space and landing rights to carriers and renting out pitches for shops. Until we had completed this research, government policy looked wrong but consistent: the free market was being allowed to let rip, regardless of the environmental consequences. Now we know that the government has intervened to accelerate this growth.

Of the £80m, £17m has been spent by bodies controlled by the national assemblies. Scottish Enterprise has spent £8m on developing air routes between Scottish airports and English or European cities, and on subsidies and grants to British Airways, Ryanair, Loganair and BAA. Invest Northern Ireland has spent £3m on developing new air routes. The Welsh Assembly Government has paid £6m to construct and run a new airport terminal, subsidise the Scottish company Highland Airways, give the airlines discounts for airport charges and market flights from Cardiff to Paris and Barcelona.

Here's the full list of subsidies paid out to UK airports:









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Old 18th Nov 2018, 10:00
  #922 (permalink)  
 
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Originally Posted by Mike Flynn View Post

I think you are missing my point that airlines and small airports are subsidied by the EU.
The EU does approve PSO routes but that money usually comes from local or UK government i believe.
As for Wales yes the Welsh government has spent money to promote Wales and too invest in parts of Wales like the North West in building and supporting the Anglesey route. That's their job and let's be frank they are held back in doing it in parts by the UK government and EU rules and if Wales was independent then it would be a lot different.
I'm sure Flybe has benefited from that investment as well considering how their Cardiff airport operation has grown but that's not a negative thing that's a good thing as it's created jobs that wouldn't have otherwise been there. It is the job of local authorities to promote investment in their areas and airport's are one way of doing that.
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Old 18th Nov 2018, 10:09
  #923 (permalink)  
 
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I think you are missing my point that airlines and small airports are subsidied by the EU.
But the EU supports many industries, not just aviation and believe it or not just in the UK, as does the UK and the national governments. In the short term at least, the UK government will be replicating the structure of EU subsidies - what's your point?
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Old 18th Nov 2018, 11:42
  #924 (permalink)  
 
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Originally Posted by SWBKCB View Post
But the EU supports many industries, not just aviation and believe it or not just in the UK, as does the UK and the national governments. In the short term at least, the UK government will be replicating the structure of EU subsidies - what's your point?
My point is that to what degree do we as taxpayers subside ailing internal airlines.

Clearly axing passenger duty and airport departure fees might be a start.
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Old 18th Nov 2018, 11:53
  #925 (permalink)  
 
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Directly, we don't - they benefit from funding for PSO routes and there may be some cash for new route support (no tax on fuel, mind). I expect the amounts you've listed above are for investments in infrastructure - similar to many other industries.
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Old 18th Nov 2018, 12:38
  #926 (permalink)  
 
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The UK is exceptionally parcimonious and tight fisted in Awarding and supporting PSO routes by comparison to competing economies.

Imho and it only an opinion Flybe operations retain one of the failures that dogged BA Regional for decades- having competing routes and hubs at both Manchester and Birmingham ; They really should focus on one or the other to strenghten the overall offering .

Further those Scottish remedial slot services probably arenít performing that well either especially if they are carrying large numbers of Codeshare ticket holders at pence in the pound; Thatís the exact formula that lead to British Midlands demise!
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Old 18th Nov 2018, 13:42
  #927 (permalink)  
 
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Originally Posted by tom7130 View Post

I see you point but I think that they would focus on their biggest bases. I would probably close EMA and then cancel the routes out of LHR if they were an option
Surely flybes LHR slots would be worth quite a bit?
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Old 18th Nov 2018, 14:03
  #928 (permalink)  
 
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Originally Posted by louelle100 View Post
Surely flybes LHR slots would be worth quite a bit?
They remain part of the IAG (BA) grand father holding and have a whole host of strings attached for a number of years yet; If Flybe were to fail in the next months and I do hope they don’t these slots would revert to IAG (BA) almost immediately .

They can have no book value to Flybe at this time.
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Old 18th Nov 2018, 14:29
  #929 (permalink)  
 
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They would definitely NOT be given to BA - the whole point of these slots is that they are to be given to an independent operator for U.K. domestics. If anything they could go to other airlines who presumably would have apply to operate them on domestic services.

Trust Flybe will act promptly with regard to the company sale, if anything - to stop all the rumours about their demise!
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Old 18th Nov 2018, 15:11
  #930 (permalink)  
 
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Originally Posted by shamrock7seal View Post
They would definitely NOT be given to BA - the whole point of these slots is that they are to be given to an independent operator for U.K. domestics. If anything they could go to other airlines who presumably would have apply to operate them on domestic services.
The slots definitely would return to BA until such time another operator applies to operate the selected routes. The remedy slots were for those seeking to fly LHR-ABZ/EDI/NCE and Moscow only.
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Old 18th Nov 2018, 15:17
  #931 (permalink)  
 
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Originally Posted by The96er View Post
The slots definitely would return to BA until such time another operator applies to operate the selected routes. The remedy slots were for those seeking to fly LHR-ABZ/EDI/NCE and Moscow only.
Does that mean the Flybe slots cannot be sold by Flybe (or whoever owns Flybe in the future) to generate cash?
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Old 18th Nov 2018, 15:24
  #932 (permalink)  
 
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Originally Posted by macdo View Post
Does that mean the Flybe slots cannot be sold by Flybe (or whoever owns Flybe in the future) to generate cash?
I believe that if an operator fly the routes for a number of consecutive years (Not sure how many) then the slot are then Grandfathered to them to use as they wish. Flybe could be playing the waiting game to cash in later - if they're still around.
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Old 18th Nov 2018, 16:54
  #933 (permalink)  
 
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Originally Posted by shamrock7seal View Post
They would definitely NOT be given to BA - the whole point of these slots is that they are to be given to an independent operator for U.K. domestics. If anything they could go to other airlines who presumably would have apply to operate them on domestic services.

Trust Flybe will act promptly with regard to the company sale, if anything - to stop all the rumours about their demise!
SHAMROCK THEY ARE BA (IAG) slots however they are currently leased to FLYBE under the strict terms of the Bmi purchase remedy competition requirements

The terms of use are that the nominated carrier or carriers may request BA relinquish a number of slots for use on routes to Riyadh, Nice, Moscow, Aberdeen , Edinburgh and Cairo.
Todate only two carriers have tried their luck and only on the same two Scottish routes

Under the terms of the original approval of the IAG-bmi deal, the European Commission had demanded IAG release 14 daily slot pairs at London Heathrow in order to facilitate new entry. These comprise seven slot pairs to facilitate new competition between London Heathrow and either Edinburgh and/or Aberdeen and five daily slots to be used between London Heathrow and Nice, Cairo, Riyadh, Moscow, Edinburgh and/or Aberdeen.

To secure grand father rights the operator must complete three years (six consecutive seasons) of operations and even after that may only repurpose the use of the slots on domestic or EU routes or on the Cairo, Riyadh or Moscow routes if they want.They may not use them on any long haul or lease them out without express approval of IAG and competition authorities.

BTW the responsibility for choosing which slot pairs (there are a total of 12 daily pairs available) of which five must be used on the currently dormant international routes or plus the two said domestic rest directly with IAG (BA), so they can if needs be manipulate the offerings if they so choose.

All that’s why they have no book value to FLYBE any time soon.

As an aside BA are also mandated to allow Virgin Atlantic access to the Shuttle services for connecting passengers at very advantageous rates.

Whilst not directly related to the bmi purchase there are also remedial slots available from IAG (BA) to competing carriers on the Boston Miami and even JFK routes under certain circumstances. Delta have used these for Boston and Miami routes from Heathrow though the Miami services have since been terminated and placed in the hands of DELTA UK better know as Virgin Atlantic using VS slots rather than remedial ones.

Last edited by Rutan16; 18th Nov 2018 at 17:29.
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Old 18th Nov 2018, 17:10
  #934 (permalink)  
 
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Very informative replies, thank you
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Old 18th Nov 2018, 17:16
  #935 (permalink)  
 
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The LHR slots never become Flybe's - they remain as a leasehold rather than a freehold. All that happens over time is that they can be shifted from ABZ and EDI routes to any other short-haul route of Flybe's choosing, should it elect to do so. Flybe can also apply for the unused remedy slots at LHR and they have done so for Summer 2019, to be used on any short-haul route of its choice. However, they cannot be sold and cannot be leased to any other airline - so of no value to Flybe unless they can actually make money flying them.
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Old 18th Nov 2018, 17:17
  #936 (permalink)  
 
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Little Red by Virgin gave up the remedy slots three seasons in. Flybe must be taking a massive hit with Q400 ops.
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Old 18th Nov 2018, 18:39
  #937 (permalink)  
 
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Originally Posted by DC9_10 View Post
Little Red by Virgin gave up the remedy slots three seasons in. Flybe must be taking a massive hit with Q400 ops.
Not necessarily. More efficient flying 60 people to Edinburgh in a Dash than to Manchester in an Airbus. Not saying itís making money, but itís not necessarily losing too much.

Could BE sub-let the slots to someone else? Or even if it came to it launch a route to Guangzhou (operated by China Southern)?
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Old 18th Nov 2018, 18:56
  #938 (permalink)  
 
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Originally Posted by AirportPlanner1 View Post


Not necessarily. More efficient flying 60 people to Edinburgh in a Dash than to Manchester in an Airbus. Not saying itís making money, but itís not necessarily losing too much.

Could BE sub-let the slots to someone else? Or even if it came to it launch a route to Guangzhou (operated by China Southern)?

Still carrying 60 with significant numbers being codeshare passengers at pence in the pound will never pay the bills period ; Thatís exactly the formula that did in bmi !

Its also the massive weakness in the HAL third runway argument. Domestic routes other than those adopted by BA will never work on a purely commercial basis.

Second no they canít sublet them to anybody ever .

They canít ever be used on long haul cepting Cairo or Riyadh or medium haul to Moscow.

Repeat and rewind read above post on the subject.

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Old 18th Nov 2018, 18:57
  #939 (permalink)  
 
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Originally Posted by DC9_10 View Post
Flybe must be taking a massive hit with Q400 ops.
Are you suggesting that BA's UK domestics are profitable ?
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Old 18th Nov 2018, 19:37
  #940 (permalink)  
 
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Are you suggesting that BA's UK domestics are profitable ?
I believe GLA/EDI -LHR are, also given the fact LCY feeds nothing and has the highest % of elites on the network and that BA offer services to LGW as well, they'd need to be in th eblack to justify the aircraft.
Seems odd to fly all of that at a loss! LGW and LCY have to stand on their own two feet as there's almost zero feed to long haul outwith the first wave LGW southbounds.

Last edited by Skipness One Foxtrot; 18th Nov 2018 at 19:59.
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