Why do so many people try to start an airline ?
SWBKCB has it - it's the unbelievable drive of customers to save a quid by driving halfway across country to leave in the middle of the night in a plane that yo'd be fined for operating if you crammed in livestock in the same way.
Which is the most successful new airline in the past 40 ears in Europe - Ryanair - famous for doing NONE of the things that rog747 dreams of
"If I did (I likely would be quite mad I hear you all cry) then I would like to look at starting an Airline that goes back to basics offering Passengers a decent product, and showing them some respect.
IE; Hold Luggage and seat allocation included, hot meals on flights sat in a Comfy seat, all with decent leg room."
That's what a bundle of people have tried - and that's why they fail - they underestimate just how low customers are wiling to go
Which is the most successful new airline in the past 40 ears in Europe - Ryanair - famous for doing NONE of the things that rog747 dreams of
"If I did (I likely would be quite mad I hear you all cry) then I would like to look at starting an Airline that goes back to basics offering Passengers a decent product, and showing them some respect.
IE; Hold Luggage and seat allocation included, hot meals on flights sat in a Comfy seat, all with decent leg room."
That's what a bundle of people have tried - and that's why they fail - they underestimate just how low customers are wiling to go
That's what a bundle of people have tried - and that's why they fail - they underestimate just how low customers are wiling to go
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The better experience described does actually exist, in London/south-east at least - BA’s Club Europe. Lounge, more space, meals. Quite an extensive Med/sun network compared to decades past.
There is no evidence of there being appetite for a premium offer at scale. Not enough willing to pay for it, or to go out of their way to access it. Why bother, when you can jump on a Ryanair a short distance from home at Exeter, Norwich, Teesside etc
There is no evidence of there being appetite for a premium offer at scale. Not enough willing to pay for it, or to go out of their way to access it. Why bother, when you can jump on a Ryanair a short distance from home at Exeter, Norwich, Teesside etc
The better experience described does actually exist, in London/south-east at least - BA’s Club Europe. Lounge, more space, meals. Quite an extensive Med/sun network compared to decades past.
There is no evidence of there being appetite for a premium offer at scale. Not enough willing to pay for it, or to go out of their way to access it. Why bother, when you can jump on a Ryanair a short distance from home at Exeter, Norwich, Teesside etc
There is no evidence of there being appetite for a premium offer at scale. Not enough willing to pay for it, or to go out of their way to access it. Why bother, when you can jump on a Ryanair a short distance from home at Exeter, Norwich, Teesside etc
yes there are those who pay more for comfort - I do - but not on trips of a couple of hours....................... but I have quite well heeled friends and family who won't pay for any sort of upgrade even on long haul
Why do they fail? An obsession to make a name for themselves above all else. For those with serious credentials then it’s wrong place wrong time.
Conversely, the successful ones I.e Easyjet, Ryanair capitalised on deregulation and shook the market up, they also created a gap for Jet2 whilst destroying the traditional charter companies like Air 2000, JMC etc etc by decimating the market forcing consolidation and the ultimate demise of Thomas Cook.
The smaller ones like Eastern, nobody really knows how these survive but it’s usually an expensive hobby for the owner(s) who make their money in other sectors and are happy to just keep throwing money at them to keep them afloat.
Barriers to entry in the airline sector are extremely high and are only getting higher as the environmental impact mitigated by increased taxes/costs, the OP alluded to the old saying, and in most cases it’s true. However, in the case of airlines like Jet2, that made a couple of people a lot of money!
Conversely, the successful ones I.e Easyjet, Ryanair capitalised on deregulation and shook the market up, they also created a gap for Jet2 whilst destroying the traditional charter companies like Air 2000, JMC etc etc by decimating the market forcing consolidation and the ultimate demise of Thomas Cook.
The smaller ones like Eastern, nobody really knows how these survive but it’s usually an expensive hobby for the owner(s) who make their money in other sectors and are happy to just keep throwing money at them to keep them afloat.
Barriers to entry in the airline sector are extremely high and are only getting higher as the environmental impact mitigated by increased taxes/costs, the OP alluded to the old saying, and in most cases it’s true. However, in the case of airlines like Jet2, that made a couple of people a lot of money!
Paxing All Over The World
I agree that the timing was right for all the LCCs, not just the two most notable in the UK/Europe, as the format has spread around the world. But not only deregulation but the widescale take up of the Internet. U2 and FR both started with call centres and dumped them as soon as they could. When EZY started, their call centre phone number was painted on the planes. Once people got used to the idea of shopping for all components parking/flights/bags/food/transfers/hotel it was the end of the main High Street travel agents. The others like AirBNB all piled in and that cut the inclusive tour off at the knees.
The customer has learnt to fine tune every aspect. Hotels and carriers will show you how you can save money by taking the 06:00 on the previous day or even just three hours later on the same day, arrive the next day. Going into that level of detail on the phone is very expensive for the seller. So you can tweak every aspect of the trip to see where you save money and where you splurge. The same drivers have ended the era of the Department Store. I am amazed that some have lasted this long, as their older customers are dying and the younger ones shop around online - before they go to the shop itself - if they do.
There is not a single line of business that has not been eviscerated by the Internet. For airlines, it is not just that the carriers went on-line but the Bucket Shops too and then the 'fan' sites who compare all the facilities, food etc. they make money through advertising and, sometimes by through selling. These sites are now the pile of 'colour brochures' that you used to get in the High Street, or posted to you twice a year. The Inclusive Tour companies turned into 'Booking' and 'LastMinute' and numerous others. There are even online sites that specialise in low cost Biz class.
When I decorated my first flat (late 1970s) there were small DIY and Hardware shops. They were put out of business by the DIY superstores. THEY are now losing to direct shipping and, as we discovered last week, major paint sellers will send you paint samples (at a price) and then ship the can to you. I can shop the websites of the DIY stores for something I know - and chose which to go to or have deliver to me. Simples!
Lastly, I suggest, that the 2008 financial crash and (in the UK) austerity meant everyone wanted to save money. The next biggie was Covid19. A lot of people had not really recovered from 2008. Then (in the UK) the economy was broken by Liz Truss and not many folks feel in the mood to splash out on getting to the holiday in more comfort.
Whilst I do pay to upgrade for long haul, I agree with Asturias56. I have friends with a LOT more money than me, who also regularly trravel long haul, and they will not upgrade. On one trip back from JNB, they got upgraded to WT+ and said to me, "I wouldn't pay for that". These are the reasons why Global will not work.
For purchasing (practically anything) the Internet and the FR style of pricing is now the only BIG game in the world. Specialists will always exist around the edges but the Legacy carriers learnt the hard way. Some have still not learnt!
1995, Boeing 737!!
Why easyJet is orange
The customer has learnt to fine tune every aspect. Hotels and carriers will show you how you can save money by taking the 06:00 on the previous day or even just three hours later on the same day, arrive the next day. Going into that level of detail on the phone is very expensive for the seller. So you can tweak every aspect of the trip to see where you save money and where you splurge. The same drivers have ended the era of the Department Store. I am amazed that some have lasted this long, as their older customers are dying and the younger ones shop around online - before they go to the shop itself - if they do.
There is not a single line of business that has not been eviscerated by the Internet. For airlines, it is not just that the carriers went on-line but the Bucket Shops too and then the 'fan' sites who compare all the facilities, food etc. they make money through advertising and, sometimes by through selling. These sites are now the pile of 'colour brochures' that you used to get in the High Street, or posted to you twice a year. The Inclusive Tour companies turned into 'Booking' and 'LastMinute' and numerous others. There are even online sites that specialise in low cost Biz class.
When I decorated my first flat (late 1970s) there were small DIY and Hardware shops. They were put out of business by the DIY superstores. THEY are now losing to direct shipping and, as we discovered last week, major paint sellers will send you paint samples (at a price) and then ship the can to you. I can shop the websites of the DIY stores for something I know - and chose which to go to or have deliver to me. Simples!
Lastly, I suggest, that the 2008 financial crash and (in the UK) austerity meant everyone wanted to save money. The next biggie was Covid19. A lot of people had not really recovered from 2008. Then (in the UK) the economy was broken by Liz Truss and not many folks feel in the mood to splash out on getting to the holiday in more comfort.
Whilst I do pay to upgrade for long haul, I agree with Asturias56. I have friends with a LOT more money than me, who also regularly trravel long haul, and they will not upgrade. On one trip back from JNB, they got upgraded to WT+ and said to me, "I wouldn't pay for that". These are the reasons why Global will not work.
For purchasing (practically anything) the Internet and the FR style of pricing is now the only BIG game in the world. Specialists will always exist around the edges but the Legacy carriers learnt the hard way. Some have still not learnt!
1995, Boeing 737!!
Why easyJet is orange
Last edited by PAXboy; 8th Feb 2024 at 18:37. Reason: extra photo + link
PAXboy, whilst I agree with you that the internet has been a turning point, it is all a number of holes that lined up at that time. However, in more recent years with the growth of Jet2Holidays, they managed to tap into a traditional way of booking package holidays and they do this very well. This suggests that if you get the right product for the right market then there is potential to grow. That said, there is still only a finite market, and the industry seems to rely on attrition to an extent.
Paxing All Over The World
Yes pug, I take your point. I have heard good things about J2 and if they have found / refound a market for a package - that is great. I do not usually book packages, as I've been independently minded all my life. Also, I have never had children. Mrs PAXboy does but they are grown up and make their own choices - not least as one of them worked in the travel market for a long time.
The short haul market is totally catered for and Europe is sorting out their trains. The medium haul has come within range of the LCCs due to the ER versions and I think very little new business to be found there. It is true that the long has been searching for a new format following: 1) the Laker era 2) the wide-body aircraft 3) ETOPS. But no one thinks there is a luxury market hiding in the rainbow.
I certainly admire FR for their clear stance on customer service. I suspect that they benefit from each year producing new customers, turned 18 and ready to put up with anything to get away from their parents. At the other end, some parents might then think that will travel in a different manner!
It looks as if the era immediately following deregulation was (shall I suggest) the 'Silver' era, following the Gold! Whether we have yet reached the Bronze age, it is too early to say!
The short haul market is totally catered for and Europe is sorting out their trains. The medium haul has come within range of the LCCs due to the ER versions and I think very little new business to be found there. It is true that the long has been searching for a new format following: 1) the Laker era 2) the wide-body aircraft 3) ETOPS. But no one thinks there is a luxury market hiding in the rainbow.
I certainly admire FR for their clear stance on customer service. I suspect that they benefit from each year producing new customers, turned 18 and ready to put up with anything to get away from their parents. At the other end, some parents might then think that will travel in a different manner!
It looks as if the era immediately following deregulation was (shall I suggest) the 'Silver' era, following the Gold! Whether we have yet reached the Bronze age, it is too early to say!
Yes pug, I take your point. I have heard good things about J2 and if they have found / refound a market for a package - that is great. I do not usually book packages, as I've been independently minded all my life. Also, I have never had children. Mrs PAXboy does but they are grown up and make their own choices - not least as one of them worked in the travel market for a long time.
The short haul market is totally catered for and Europe is sorting out their trains. The medium haul has come within range of the LCCs due to the ER versions and I think very little new business to be found there. It is true that the long has been searching for a new format following: 1) the Laker era 2) the wide-body aircraft 3) ETOPS. But no one thinks there is a luxury market hiding in the rainbow.
I certainly admire FR for their clear stance on customer service. I suspect that they benefit from each year producing new customers, turned 18 and ready to put up with anything to get away from their parents. At the other end, some parents might then think that will travel in a different manner!
It looks as if the era immediately following deregulation was (shall I suggest) the 'Silver' era, following the Gold! Whether we have yet reached the Bronze age, it is too early to say!
The short haul market is totally catered for and Europe is sorting out their trains. The medium haul has come within range of the LCCs due to the ER versions and I think very little new business to be found there. It is true that the long has been searching for a new format following: 1) the Laker era 2) the wide-body aircraft 3) ETOPS. But no one thinks there is a luxury market hiding in the rainbow.
I certainly admire FR for their clear stance on customer service. I suspect that they benefit from each year producing new customers, turned 18 and ready to put up with anything to get away from their parents. At the other end, some parents might then think that will travel in a different manner!
It looks as if the era immediately following deregulation was (shall I suggest) the 'Silver' era, following the Gold! Whether we have yet reached the Bronze age, it is too early to say!
Inter-EU, specifically the northern regions of Europe to the med I think will continue to struggle with slots, paired with the ongoing plan to tackle climate change, possibly dictating the use of larger aircraft from a smaller number of base airports. Thats a longer term concern though.
pretty bleak picture painted here -a Ryanair world not just aviation where only the price matters, although, to be fair to Ryanair, they do go to a lot of the way places.
Since moving from LHR country to the SW Ive used Jet 2 a few tiems and found them very good, they do seem to invest in their customer facing staff who in my experience have a good customer facing ethos both on the ground and in the cabin.
Following many complaints about baggage handling at Bristol (Britain's worst airport??) run on the cheap by a Canadian pension fund, Jet 2 ditched the outsourced one-size-fits-all baggage handling contract and put their own people in.
As a rule,sad as it is individuals dont belong in mega industries, Ok Bezos invented his own industry and Musk is from Mars but its a big risk. Back in the day of deregulation in my industry telecoms/internet there were lots of people of entrepreneurial bent who thought I can find a niche and do better than some big ex Govt monolith . A few worked for a while but they pretty much all ended up being bought at Ch 11 prices by bigger fish and some just never did industry specific due diligence (usually via lawyers who knew and know little about technology based industries) .
If you want to see a little bit of fighting back try looking at the Nationwide Ads before they get taken down as big banks use their financial clout with Government and thus regulators to stop people telling the unpleasant truth about them.
I dont think I can post a sample as it is effectively advertising but it is both relevant and funny
Since moving from LHR country to the SW Ive used Jet 2 a few tiems and found them very good, they do seem to invest in their customer facing staff who in my experience have a good customer facing ethos both on the ground and in the cabin.
Following many complaints about baggage handling at Bristol (Britain's worst airport??) run on the cheap by a Canadian pension fund, Jet 2 ditched the outsourced one-size-fits-all baggage handling contract and put their own people in.
As a rule,sad as it is individuals dont belong in mega industries, Ok Bezos invented his own industry and Musk is from Mars but its a big risk. Back in the day of deregulation in my industry telecoms/internet there were lots of people of entrepreneurial bent who thought I can find a niche and do better than some big ex Govt monolith . A few worked for a while but they pretty much all ended up being bought at Ch 11 prices by bigger fish and some just never did industry specific due diligence (usually via lawyers who knew and know little about technology based industries) .
If you want to see a little bit of fighting back try looking at the Nationwide Ads before they get taken down as big banks use their financial clout with Government and thus regulators to stop people telling the unpleasant truth about them.
I dont think I can post a sample as it is effectively advertising but it is both relevant and funny
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I do like the story from Branson where his flight to a ski trip was cancelled so he went down the way, found a charter operation, chartered a plane and then came back to the gate and sold seats to pay off the charter and made a few bucks for his trouble. I think there was more work after that.
To address the more fundamental question as to why so many people try to start an airline, I'm reminded of a quote by another famous entrepreneur, Steve Jobs: “The people who are crazy enough to think they can change the world are the ones who do.”
So, the answer is fairly simple, perhaps we're just a bit crazy...?!
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He wasn't flying to a ski trip, although the rest of what you say is correct; Branson explains how the idea of starting Virgin Atlantic came about here.
To address the more fundamental question as to why so many people try to start an airline, I'm reminded of a quote by another famous entrepreneur, Steve Jobs: “The people who are crazy enough to think they can change the world are the ones who do.”
So, the answer is fairly simple, perhaps we're just a bit crazy...?!
To address the more fundamental question as to why so many people try to start an airline, I'm reminded of a quote by another famous entrepreneur, Steve Jobs: “The people who are crazy enough to think they can change the world are the ones who do.”
So, the answer is fairly simple, perhaps we're just a bit crazy...?!
I won £4.40 this week on the Euromillions --- any old Tristars out there LOL
If you need a Director on a salary of only £250k a year PM me......................
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I agree that the timing was right for all the LCCs, not just the two most notable in the UK/Europe, as the format has spread around the world. But not only deregulation but the widescale take up of the Internet. U2 and FR both started with call centres and dumped them as soon as they could. When EZY started, their call centre phone number was painted on the planes. Once people got used to the idea of shopping for all components parking/flights/bags/food/transfers/hotel it was the end of the main High Street travel agents. The others like AirBNB all piled in and that cut the inclusive tour off at the knees.
The customer has learnt to fine tune every aspect. Hotels and carriers will show you how you can save money by taking the 06:00 on the previous day or even just three hours later on the same day, arrive the next day. Going into that level of detail on the phone is very expensive for the seller. So you can tweak every aspect of the trip to see where you save money and where you splurge. The same drivers have ended the era of the Department Store. I am amazed that some have lasted this long, as their older customers are dying and the younger ones shop around online - before they go to the shop itself - if they do.
There is not a single line of business that has not been eviscerated by the Internet. For airlines, it is not just that the carriers went on-line but the Bucket Shops too and then the 'fan' sites who compare all the facilities, food etc. they make money through advertising and, sometimes by through selling. These sites are now the pile of 'colour brochures' that you used to get in the High Street, or posted to you twice a year. The Inclusive Tour companies turned into 'Booking' and 'LastMinute' and numerous others. There are even online sites that specialise in low cost Biz class.
When I decorated my first flat (late 1970s) there were small DIY and Hardware shops. They were put out of business by the DIY superstores. THEY are now losing to direct shipping and, as we discovered last week, major paint sellers will send you paint samples (at a price) and then ship the can to you. I can shop the websites of the DIY stores for something I know - and chose which to go to or have deliver to me. Simples!
Lastly, I suggest, that the 2008 financial crash and (in the UK) austerity meant everyone wanted to save money. The next biggie was Covid19. A lot of people had not really recovered from 2008. Then (in the UK) the economy was broken by Liz Truss and not many folks feel in the mood to splash out on getting to the holiday in more comfort.
Whilst I do pay to upgrade for long haul, I agree with Asturias56. I have friends with a LOT more money than me, who also regularly trravel long haul, and they will not upgrade. On one trip back from JNB, they got upgraded to WT+ and said to me, "I wouldn't pay for that". These are the reasons why Global will not work.
For purchasing (practically anything) the Internet and the FR style of pricing is now the only BIG game in the world. Specialists will always exist around the edges but the Legacy carriers learnt the hard way. Some have still not learnt!
1995, Boeing 737!!
Why easyJet is orange
The customer has learnt to fine tune every aspect. Hotels and carriers will show you how you can save money by taking the 06:00 on the previous day or even just three hours later on the same day, arrive the next day. Going into that level of detail on the phone is very expensive for the seller. So you can tweak every aspect of the trip to see where you save money and where you splurge. The same drivers have ended the era of the Department Store. I am amazed that some have lasted this long, as their older customers are dying and the younger ones shop around online - before they go to the shop itself - if they do.
There is not a single line of business that has not been eviscerated by the Internet. For airlines, it is not just that the carriers went on-line but the Bucket Shops too and then the 'fan' sites who compare all the facilities, food etc. they make money through advertising and, sometimes by through selling. These sites are now the pile of 'colour brochures' that you used to get in the High Street, or posted to you twice a year. The Inclusive Tour companies turned into 'Booking' and 'LastMinute' and numerous others. There are even online sites that specialise in low cost Biz class.
When I decorated my first flat (late 1970s) there were small DIY and Hardware shops. They were put out of business by the DIY superstores. THEY are now losing to direct shipping and, as we discovered last week, major paint sellers will send you paint samples (at a price) and then ship the can to you. I can shop the websites of the DIY stores for something I know - and chose which to go to or have deliver to me. Simples!
Lastly, I suggest, that the 2008 financial crash and (in the UK) austerity meant everyone wanted to save money. The next biggie was Covid19. A lot of people had not really recovered from 2008. Then (in the UK) the economy was broken by Liz Truss and not many folks feel in the mood to splash out on getting to the holiday in more comfort.
Whilst I do pay to upgrade for long haul, I agree with Asturias56. I have friends with a LOT more money than me, who also regularly trravel long haul, and they will not upgrade. On one trip back from JNB, they got upgraded to WT+ and said to me, "I wouldn't pay for that". These are the reasons why Global will not work.
For purchasing (practically anything) the Internet and the FR style of pricing is now the only BIG game in the world. Specialists will always exist around the edges but the Legacy carriers learnt the hard way. Some have still not learnt!
1995, Boeing 737!!
Why easyJet is orange
Those passengers who abandoned the call centre, they were used to, to use the bewildering new marvel called the internet were rewarded with a discounted price.
Now the airlines could change passenger behaviour from the operationally expensive, or if they couldn’t change behaviour, pass the cost directly to the passenger by selling ancillaries.
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It isn’t that passengers don’t want convenience, they all want extra legroom, lie flat beds, drinks, meals, flights that depart convenient to them but they only want to pay 1p for it (yes, I have flown Ryanair for 1p). However some passengers will pay more than 1p so you can sell them convenience. How much convenience each passenger will buy will vary with cost.
Here is an interesting comparison that I actually made this week. I flew from Barcelona to London, the choice is between Vueling and BA, two airlines with the same owner. After ancillaries, the price was exactly the same. On one, I was sitting at the front with extra legroom, I paid to take my baggage on board but went to a less convenient airport. On the other I had very little legroom, the same two bags went into the cabin for free and I arrived at a much more convenient airport. The choice I made was reduced legroom but more convenient airport.
The exercise every prospective airline CEO should do, before deciding anything else, is sit down with a blank piece of paper and decide where their new airline sits on the Convenience/Cost line. It is not the case that only lowest cost is successful now because some passengers will pay for convenience and the decision is how much convenience you give them in the basic ticket price and how much you offer with ancillaries.
Any prospective CEO who chooses the aircraft first and then works backwards hasn’t looked at demand, they have decided to supply their idealised version of an airline and ultimately have planned bankruptcy.
Here is an interesting comparison that I actually made this week. I flew from Barcelona to London, the choice is between Vueling and BA, two airlines with the same owner. After ancillaries, the price was exactly the same. On one, I was sitting at the front with extra legroom, I paid to take my baggage on board but went to a less convenient airport. On the other I had very little legroom, the same two bags went into the cabin for free and I arrived at a much more convenient airport. The choice I made was reduced legroom but more convenient airport.
The exercise every prospective airline CEO should do, before deciding anything else, is sit down with a blank piece of paper and decide where their new airline sits on the Convenience/Cost line. It is not the case that only lowest cost is successful now because some passengers will pay for convenience and the decision is how much convenience you give them in the basic ticket price and how much you offer with ancillaries.
Any prospective CEO who chooses the aircraft first and then works backwards hasn’t looked at demand, they have decided to supply their idealised version of an airline and ultimately have planned bankruptcy.
Paxing All Over The World
Well said runway30. I was in Telecoms for 27 years including throughout deregulation. Some made a fortune, most did not. By about 2010 it was all over. The small fry had been swallowed up by the big boys. The raft of new jobs that new technology provided, drifted away as the technology matured and no longer required skilled engineers and constant, on site monitoring.
Rather like the fallout from deregulation of airlines.
Rather like the fallout from deregulation of airlines.
