orange in the red (Merged)

[Engee73]

Do open your eyes Norman.

With 80%+ load factors, I don' think easy is having too many problems attracting pax.

What sort of yield is BA managing with £14 fares?

easy's entry in to the real world continues to be a remarkable sucess.

[omoko joe]

with 80% load factors I'd have thought the idea was to make money, not lose 47mil.

[stormin norman]

Engee73

What sort of yield is BA managing with £14 fares?
Its called loss leaders !

With Easy's 80% Load factors ,low airport charges
(Ltn,Stn) How do you lose money ?


Answers to the easy board please!

[Stockpicker]

How to make/lose money as LCC

IMHO the biggest difference between EZY and Ryanair is the airports they fly to. As long as Mr O'Leary can persuade airports to pay him to land (worth their while if they get car parking/shoppping revenues), he gets highly subsidised new routes so grows faster. If on the other hand like EZY you fly to more established airports (LGW, CDG) it's a lot hard to grow profitably and fast at the same time. Does this stack up with anyone elses's view?

[Norman Stanley Fletcher]

Stockpicker has got it right folks. I am an A320/1 driver working for a direct competitor to easyJet at LGW, and I reckon our costs are lower than theirs. Incidentally I am well-disposed towards easyJet and wish them to do well but not ahead of us!

The traditional low cost model is to fly from somewhere in the middle of nowhere to somewhere else in the middle of nowhere, provide absolutely no in flight service and make everyone believe that they really have gone where they want to go after all! Ryanair are a perfect example of a company who stick religiously and extremely successfully to that formula. easyJet have however veered from that model in that they are now taking on the traditional carriers (Monarch, Thomas Cook, GB Airways operating as BA, My Travel etc). In addition there are all sorts of other companies like Jet2, BMI Baby etc starting up from different places but to easy's destinations, and easy's natual advantages are gone. People can get fares as cheap or cheaper plus get a meal and good service with these other airlines. The 'in-yer-face' management attitude at easy is now starting to backfire as suddenly there is a raft of negative publicity ranging from bad cabin service, pilot disputes and now big losses. In the meantime the other airlines I mentioned are just quietly getting on with their lives and are making modest profits. There is no doubt that yields have been affected in all companies by this current price war, but easy have really overstretched themselves and are not in a position to fight a long-term battle. They had delusions of huge inefficiencies at these other companies that they could capitalise on, whereas in reality these companies are by and large well-run and very efficient.

Then comes the new aircraft type. Our company has just had a change from 737s to Airbuses (albeit on a much smaller scale than easyJet are planning), and although it has been well handled, it has been extremely hard work for a lot of people. How easyJet, already under the microscope, are going to manage that transition I do not know. They can only take so many ab-initio or inexperienced pilots into their system and they apparently require 200 Airbus pilot next year. They seem to have made little or no provision to recruit and train Airbus crews as yet, and seem to be relying heavily on the demise of My Travel to fulfil their experienced pilot requirement next year. Recent events on the stockmarket are showing that My Travel may yet have a few more breaths in them, and that makes easy's position difficult. I am not aware of anyone in our company (or indeed any other) being recruited to assist in this task, and unless handled extremely carefully it means that chaos could ensue at a time when stability is required.

As a former employee of Debonair, the unfolding situation at easyJet seems remarkably similar. I am loath to say the bubble has burst at easyJet, but cannot help but feeling that the internal pressures are so great that the bubble is certainly bulging massively!

[Nil further]

Norman et all , i work in the land of orange for my sins, no its not perfect , however you all seem to be overlooking the fact that considerable amounts of existing easy pilots have considerable Airbus experience incuding many TRE ,TRI etc.
A figure of 30% of existing crews having airbus experience was quoted to me by a person from the orange shed could be complete b*******s that bit but Ive met lots of guys on the line with preious experience on Airbus and ive never heard of anyone waiting or wishing for MyTravel to go bust.

"be careful what you wish for it may come true "

Rgrds to all

[Airbrake]

Nil, I think your figures for Airbus rated pilots at EJ are vastly over estimated. We have in the region of 600 pilots at Easy and no way are 200 of them Airbus rated. Of those that are rated very few will be prepared to move base for the aircraft. Gatwick is the current favourite to get the Airbus first and even those keen to return to an Airbus cockpit will have to consider the high cost of housing/rent in that area.
As for My travel nobody wants them to go bust. However, I think we would be naive to think that Easyjet do not see them as a potential source of rated and experienced pilots. As for planning ahead at Easy, well, we don't even know for sure where these aircraft are going to go yet, never mind who is going fly them.
As one last point, any new Airbus Captain will be on a 10% pay cut for the first 6 months for his trouble, that's hardly encouraging any body to jump ship.

[FlapsOne]

Airbrake

To qualify your reply a little - a newly promoted/DE employed captain will earn 90% of the full command pay for 6 months. A current EZ 737 captain moving to airbus will retain the same pay.

We wouldn't want people to get the wrong message now would we?


Norman Stanley Fletcher

The 'traditional model' you quote is that of Ryanair and no other. Hardly traditional !!!!!!!!

[Norman Stanley Fletcher]

FlapsOne

Thanks for your reply. I think it would be fair to say that the 'traditional model' I described would be true for Debonair, Buzz, Go, SouthWest Airlines in the States and of course easyJet themselves in the past. My point is that easyJet are operating far more as a traditional airline with all the rise in costs that will bring. Do not misunderstand me - I will them well but I think their traditional advantages have been eroded now they are competing on the level playing field with everyone else. Time will tell!

[omoko joe]

Ok then, so nobody will transfer internally from Boeing to Bus unless its in the base they want to be at. As for outsiders they will be disadvantaged for 6 months. So in real terms unless you are an unemployed bus driver or your company is about to go bust then stayin put is the better option...if you're a captain. My guess is that Easy will attract plenty of F/o's for their buses but few captains which is probably what they want anyway. I presume 73 guys who have passed assessments will be offered Bus commands?

[In trim]

The Airbus will be introduced to a single base at a time, with the selected bases, one-by-one, converting fully to Airbus. That means that if you operate from that base, you will move types!

Operationally you will see a mix of both types in and out of many airports, but from the crew perspective, certain airports will become wholly Airbus whilst others will remain 737.

[Airbrake]

Flaps, thanks for clearing up any ambiguity!
Just to make it absolutly clear, that 6 months does of course start from completion of line check, so all DE Captains will be on 90% pay for about 8 months in total.

[Fly_Right]

In Trim,

I wonder where you get your information from. Although Gatwick will be the first Airbus base with the first 11 UK aircraft going there starting in Mar 2004 absolutely nothing has been decided after that!
The cost of transforming say STN from Boeing to Airbus (14 A/C) would incur £3.4 Million in Boeing training costs. (ie the cost of training the new entrant pilots onto the Boeings wherever they go from STN). Another scenario would be to grow each base as the Airbusses are delivered. As easy has training credits for 6 crews per Aircraft that would mean no retraining costs at all. I'm glad I don't have to do that particular juggling act.

[FlapsOne]

Norman

Which airfields in the middle of nowhere did/do EZ and Go operate?

Debonair used 1 I think - Pontoise - which was badly marketed as Paris. Others such as Moenchengladbach and Peruggia were never advertised as anything other than what they were. They also flew to Munich, Rome, Helsinki, Zurich, Toulouse, Nice - the genuine airports, not distant 'relatives'.

In Trim

I thought the busses were starting to arrive in August?!?!?!?
Has the plot changed again?

[no sig]

Norman SF

I can't help but think, Monarch, BA and the others you mentioned are attempting to take on easyJet, not the other way around. I'm not sure there is a 'traditional model', SWA perhaps, but they are in an entirely different environment. The name of the game is low cost and easyJet is way ahead many of our competitors. Ryanair have of course done well with the regional airports, however, much of the travelling public do wish to fly to the major airports and will pay easyJet the modest premium on fare to do so.

Further, I'm not sure why you say easyJet are overstretched? They are expanding and have consolidated the merger of Go.

The European airline business has to change, the IT charter market is changing, the majors have to find a better way and easyJet is well positioned to deal with them. Quitely getting on with modest profits isn't something most business' aspire to.

You will be aware that the Airbus introduction is going to be with our Swiss operations first and is progressing well, they come on to the UK reg next year and, believe me there has been a considerable amount of planning by the dedicated project team
which has many consumate professionals working in it, they'll have thought of everything you have.

[unwiseowl]

Back to the original subject: Does anyone remember Ray Webster making a statement soon after 9/11 which went like this "if we have a rescession then great because that will provide the ideal environment for us to thrive". I guess he must be hoping the rescession goes on and on!!!!

[carlos vandango]

getting rid of Webster would go some way in making up their substantial loss although they'd probably half to pay him a couple of million to go.

[In trim]

Fly Right,

As I said, the plan at present is to introduce the Airbus one base at a time. To have mixed bases would add too much complexity, additional crew requirements (standby coverage for 2 fleets, etc.)

Where will the second UK base be? The decision for the first was pretty obvious, but the second needs a lot more work to get the most cost-effective solution.

Obviously the cost of transitioning a base such as STN would be huge, and for other reasons (maintenance, training, etc.) I suspect STN and LTN will remain 737 bases for the forseeable future.....after all, there will still be a fleet of 60'ish 737's for quite a while yet.

[fiftyfour]

I am surprised that EJ think that that all they have to do is come onto a route, and then they will automatically get the passengers. Most airlines like BM, BA, FLYBE, and all the established traditional charter airlines are making moves to stand their ground and keep what they have.
The only thing that is certain, is that EJ have commitments for over one hundred brand new aircraft. Serious money. Even, if they convert to leasing, it is still serious money - recession or not. There are no guarantees that there will be enough passengers to fill them, and the competition isn't going to lie down. I will not be 'investing' in EJ, and I sincerely hope that my pension fund managers stay well clearas well.

[FlapsOne]

I am surprised that EJ think that that all they have to do is come onto a route, and then they will automatically get the passengers.

But they do get the pax. Hardly any routes in the last 3 years have been binned. Most, if not all, of the routes introduced in the last 2-3 years are still running succesfully.

Most airlines like BM, BA, FLYBE, and all the established traditional charter airlines are making moves to stand their ground and keep what they have.

Making moves to do nothing! ergo: They don't have the balls for change perhaps?

There are bucket loads of reasons for this financial loss over the last 6 months (most of which were avoidable !!!) but none of them are to do with pax numbers!

(EZ are not in the RED as the title of this thread suggests by the way).