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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: |
Originally Posted by Mike Flynn
(Post 10314104)
I think you are missing my point that airlines and small airports are subsidied by the EU. 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. |
I think you are missing my point that airlines and small airports are subsidied by the EU. |
Originally Posted by SWBKCB
(Post 10314124)
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?
Clearly axing passenger duty and airport departure fees might be a start. |
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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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 aren’t performing that well either especially if they are carrying large numbers of Codeshare ticket holders at pence in the pound; That’s the exact formula that lead to British Midlands demise! |
Originally Posted by tom7130
(Post 10299178)
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 |
Originally Posted by louelle100
(Post 10314220)
Surely flybes LHR slots would be worth quite a bit?
They can have no book value to Flybe at this time. |
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! |
Originally Posted by shamrock7seal
(Post 10314236)
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. |
Originally Posted by The96er
(Post 10314255)
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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Originally Posted by macdo
(Post 10314259)
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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Originally Posted by shamrock7seal
(Post 10314236)
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! 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. |
Very informative replies, thank you
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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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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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Originally Posted by DC9_10
(Post 10314319)
Little Red by Virgin gave up the remedy slots three seasons in. Flybe must be taking a massive hit with Q400 ops.
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)? |
Originally Posted by AirportPlanner1
(Post 10314354)
Not necessarily. More efficient flying 60 people to Edinburgh in a Dash than to Manchester in an Airbus. Not saying it’s making money, but it’s 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 ; That’s 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 can’t sublet them to anybody ever . They can’t ever be used on long haul cepting Cairo or Riyadh or medium haul to Moscow. Repeat and rewind read above post on the subject. |
Originally Posted by DC9_10
(Post 10314319)
Flybe must be taking a massive hit with Q400 ops.
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Are you suggesting that BA's UK domestics are profitable ? 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. |
Originally Posted by Rutan16
(Post 10314368)
Still carrying 60 with significant numbers being codeshare passengers at pence in the pound will never pay the bills period ; That’s exactly the formula that did in bmi ! by class meaning that far from pennies, codeshare pax can actually be worth significant revenues often better than the point to point pax! You just need to have people who know what their doing. |
I cannot see how the LHR routes make money.
A320 every hour wuth semi seamless connections or the flybe option in a Dash ! vanity ? or nice juicy sale when time permits . |
Originally Posted by Navpi
(Post 10314554)
Ior nice juicy sale when time permits .
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Rutan16, thanks for the comprehensive response and factual rebuttal. Although they may be BA’s, BA cannot use them. When you say ‘lease’ who gets paid what? |
Am I dreaming or did Flybe pay £15 million for some LGW slots not that long ago? If so, presumably they are freehold, unrestricted and theirs to sell? So that's around half the sale price of the company?
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Originally Posted by Skipness One Foxtrot
(Post 10314391)
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.
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Originally Posted by DaveReidUK
(Post 10314369)
Are you suggesting that BA's UK domestics are profitable ?
Not sure how they all stack up on an O&D basis but all the domestics produce a huge amount of feed for BA into LHR (LBA probably being the best example of this). |
Originally Posted by 01475
(Post 10313224)
The figures in the graph are utterly useless (also ignoring franchises, along with the other faults).
Flybe's accounts tell me that their underlying business might not be entirely sound, but is recoverable and certainly isn't awful. ( |
Originally Posted by AirportPlanner1
(Post 10314354)
Not necessarily. More efficient flying 60 people to Edinburgh in a Dash than to Manchester in an Airbus. Not saying it’s making money, but it’s 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)? |
Originally Posted by RexBanner
(Post 10314735)
JER, GLA and EDI all feed the Longhaul from Gatwick, a small amount will connect from Europe too.
A320 every hour wuth semi seamless connections or the flybe option in a Dash ! One of the challenges must be that flybe are competing with their borderline LHR operations with a large operation out of LCY. Now BA can do this better, in the way LHR-GLA was downsized and LCY-GLA up-sized with a move away from connections to support strong point to point London traffic but I don't see flybe having the benefits of scale to do this. |
Originally Posted by anothertyke
(Post 10314715)
Am I dreaming or did Flybe pay £15 million for some LGW slots not that long ago? If so, presumably they are freehold, unrestricted and theirs to sell? So that's around half the sale price of the company?
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Originally Posted by DaveReidUK
(Post 10314369)
Are you suggesting that BA's UK domestics are profitable ?
How the figures are represented is, of course, quite different. I can present you with figures which, on a straightforward accounting basis, show the BA Domestics as profitable. I can also present you with figures done on an equally straightforward basis which show they have lost considerable money for each of the last 45 years. What do you want me to show ? Despite all this, BA choose to let them absorb a substantial number of Heathrow slots which have great value. I did once, in consecutive weeks, pay more on a BA Monday morning trip to Aberdeen than on a trip to Miami. Both in Y. The Aberdeen flight was fuller ... A network carrier means what it says, it is the overall network which is the asset value; trying to salami slice it down and look at individual bits is, to an extent, a disconnected beancounting pastime. A considerable part of how BMI lost so much is they were constrained by Star Alliance connecting passenger revenue splitting. It worked OK where you had the long haul, but BMI, uniquely short haul only in the alliance, were short changed by all the long haul carriers into Heathrow. That was a real loss. |
Originally Posted by BA318
(Post 10314872)
The only slots Flybe have at LGW are for the NQY route. The rest were sold off for £25 million. https://www.telegraph.co.uk/finance/...t-for-20m.html
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Originally Posted by Mike Flynn
(Post 10314813)
Now you are getting in to dreamland. No UK regional operator could ever fly to Guangzhou.If anyone could challenge China Southern it would be Air Asia. Trust me I live here.China Southern already operate two flights a day from Heathrow but Guangzhou is an awful airport compared to neighbouring Hong Kong. Read between the lines. Perhaps you didn’t on purpose. |
https://www.devonlive.com/news/devon...-flybe-2236883 Could be great news if they get a wealthy owner prepared to invest in the airline |
Originally Posted by Brigantee
(Post 10314936)
https://www.devonlive.com/news/devon...-flybe-2236883 Could be great news if they get a wealthy owner prepared to invest in the airline |
Why on earth would easy jet want to get involved with a basket case regional airline ?
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Originally Posted by WHBM
(Post 10314881)
If they weren't profitable they wouldn't do them. I think you know this :)
I've spent the last 50 years watching with interest while BEA/BA gradually extricated themselves from a large network of increasingly unviable UK domestic routes. I'm prepare to accept that, on any sensible accounting basis, the presence of those remaining routes adds move value to the overall BA operation than their absence would. But that's not the same thing at all as saying that there are profitable in their own right. |
Originally Posted by Doc Q
(Post 10314948)
Why on earth would easy jet want to get involved with a basket case regional airline ?
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Originally Posted by SealinkBF
(Post 10315046)
Eliminating competition.
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