Ozzy, now I'm really baffled.

If we put the numbers of aircraft to one side, I think you are saying that a long-term gap exists for Flybe 2 in future because the service level provided by the likes of Eastern on SOU-MAN right now is only one flight a day and that isn't adequate. One look at the Eastern website for early October (4 weeks away) shows the route going to a 2 x daily morning + evening schedule. Same for Blue Islands on EXT-MAN from next summer. Now whether or not they make those moves, only they (or time) can tell. You say that routes like this represent an opportunity for regional carriers as passenger numbers recover from the pandemic. Looking at the plans laid out on their booking systems for all to see, the evidence is clear that Eastern and BI agree with you. Going back to aircraft numbers, it looks like Eastern don't need to add any aircraft to do this - they increase the utilisation of the existing ATR72s as I am presuming they plan to do.

So I'm really none the wiser as to where this gap is. The premise is based on taking a very short-term snapshot, assuming that it remains unchanged for the future, passenger demand increases and the now-incumbents either choose not to do anything about it or are incapable of doing so. The evidence out there already shows that isn't the case.

Albert Hall ... I suspect that the confusion arising here is because you're focusing solely on SOU/EXT-MAN in your response there. I acknowledge that I used those two routes as examples for the purpose of illustrating a wider point, but the regional market encompasses many potentially viable city-pairs across the whole of the British Isles. I personally don't envisage the relatively small operations of BCI/EZE/LOG expanding sufficiently to saturate all of those routes in the post-covid era; others may disagree. On routes which Blue Islands or Eastern do offer a full day return option, the market is likely to be satisfied and the opening for a second carrier goes away. Unless a newcomer fancies challenging them on price which cannot be ruled out. But so far, the day return has been timetabled but never actually offered in reality since FlyBe exited the market. If they do actually go double-daily from October, then GREAT ... that will inform us of the rate at which business travel might be expected to recover (barring a "firebreak lockdown" scenario). We also desperately need to see foreign travel restrictions lifted so that interline bookings can resume in earnest. But as we see across the air travel market in general, if a route remains starved of capacity for a lengthy period of time, competitors will see that as an invitation to help themselves to the incumbent's lunch. That's business.

Let's be clear also that we're still mired in the 'chicken and egg' phase of Covid restrictions. Will they / won't they? It is difficult for any airline to plan against this backdrop. But remember that this discussion arose in the FlyBe 2.0 thread to assess whether there is a market opening for them. Their timescale for this isn't the here and now. It is (probably) months hence ... and maybe never. I have continuously emphasised the difference between travel demand in post-covid times and that which we experience in the thick of it. I contend that demand numbers will look very different when all this uncertainty is behind us ... others may disagree. But FlyBe 2.0 and others like them will stand or fall on post-covid demand. I do expect a demand bounceback in that environment ... not to 2019 levels, but to numbers alot healthier than those we're seeing now. All carriers must plan based upon their own interpretations of market conditions ahead, but I have outlined my view and I stand by it.

I may be proven right, I may be proven wrong. As may you. But we will only know the facts on that with the benefit of hindsight after the event. Everything else is conjecture, how ever strongly-held our views.

Any credibility of statements being made by one poster went out of the window with the assertion that easyJet had a commendable strategy when the CAA figure for July lay bare just how bad several of these routes were. Load factor of c.20% on NQY-BHX and INV looks like a calamitous rather than commendable strategy to me.

Alot of factors come in to play on decisions such as that, not just direct profits to the bottom line. Aircrews can gain and maintain currency on flights bringing in some actual cash-flow, which circuit-bashing does not. Aircraft left unused for long periods become costly to return to service. Short revenue generating sectors can make sense to address these problems at a time like this. Never underestimate the value of bringing a bit of actual cashflow through the door. Not all routes saw load factors as poor as those you cite anyway. Some have seen decent take-up.

Which ones have seen decent take up?
And at what price point?

Well my EasyJet A320neo ABZ-MAN was 100% full two and a half weeks ago. That's not bad. And the prices for the MAN-NQY were so high that I decided not to book ... that generally indicates that the flight has sold well.

Yield ... I don't have access to EasyJet's books. Can you enlighten us?

Of course not, but you're clearly smart enough not to be making predictions from two data points.
BTW easyJet flying a high volume A320 every second day on ABZ-MAN makes Loganair's attempt to offer business friendly frequency fatally undermined. This is NOT any arguement in favour of a flybe model. Same thing happened on the IOM. You can have cheap fares as and when the volumes allow or higher fares with more flights but it's a huge challenge to have both in some of these markets. Any addition is seldom all net new.

I didn't make a prediction, Skip? And I haven't argued the case in favour of EasyJet versus Loganair either. Competition can come at a cost. But I address what happens in the real world ... not a rose-tinted one. Business is unforgiving.

Business is indeed unforgiving as I suspect the investors in Flybe 2 will discover if it ever gets off the ground.

Any news ?

Long run model
 

I think the long-run commercial model for all but the most niche short haul routes is an A320 sized, lowest seat mile cost aircraft. Once, twice, triple daily. If a carrier comes in with a small jet or turboprop and builds volumes via frequency, a loco will come on the route, so they have no future. It’s hard and unfair but that’s about it. There is no future for Flybe, Loganair etc. apart from dodging EasyJet, Ryanair et. al.
unless they invent a 50 seater with seat mile cost the same as an A320.

There probably is some opportunity on thinner routes but there won't be loads of money to make on them. The problem Flybe/ Loganair will always have is along heavier routes they will always be up against a low cost airline or a flag carrier where they may struggle to compete on price or perceived service / brand.

They did. It's called a Q400. However, when you end up paying near enough 3 x the real leasing cost you've got no chance to make money.

You CAN make money on low volume relatively high frequency routes, Loganair's bread and butter is exactly this BUT they're not low cost. As soon as the volumes hit a certain level it makes more sense for an easyJet or a Ryanair but as soon as that happens, frequency is lost. You can't have everything.

RVF750, you keep making statements like that (posts #495 and #496) and it's simply not true. I happen to have a schedule of the leases and they are all in the $150k per month area which is a market-normal rate pre-Covid for leasing a Q400 - G-JECL was at $122,245 plus Eur27,428 per month for example.

The only aircraft on different terms were a small number on which Flybe had done an "equity release". The amount of equity (or, in other words, the cash they needed out of the deal to cover previous losses) was directly related to the finance cost of the aircraft thereafter.

Yes, leases have fallen after Covid, as they have for every aircraft type. But the change in lease rentals through a pandemic which hadn't really got under way in the UK before Flybe collapsed cannot have caused it to collapse.

And let’s face it, if you need to enter into an aircraft lease involving equity release, you’re not in great shape financially.

Any news on what base or bases will be starting up

Starting with BHX - future plan is MAN but at some later time. I doubt much will be visible this year...

Skipness One Foxtrot

In what sense? Internally, or to consumers?
Because LM is cheaper and more flexible for me as a customer than Flybe, which appealed only to the undiscerning.

They're high cost because of the high frequency model using low capacity turboprops. Same as Aurigny or Blue Islands, as soon as volume hits a certain ceiling, it's open for an A320/B737 operating loco to launch low frequency and high volume service, which can actually drive volume and lower prices but out of season connectivity can be poor and reliability worse. See Isle of Man for the best example IMHO.

Now both models are needed, no one wants a return to BA LHR-Scotland fares at 1990s prices but sometimes both business models can trip over each other where no clear winner is apparent IMHO.

indeed, as SLF I prefer the loco model as it has provided many new services as well as low fares. No one operating under the 1990s model would have operated triple daily 186 seaters on a route like BRS-BFS, but that’s what’s on offer. I can remember dispatching Dan Air budgies that couldn’t make money on BFS-BRS-CWL-BFS services in the 1980s
Can someone offer triple daily 50 seaters with fares like EasyJet? I don’t think so. There seems to be a break point where fares are so low ( in the £30 - £50 per sector) that the volumes step change and you can fill 320s. So you either run Loganair business type services with hefty prices or reduce the fares and drive volume like EasyJet. The problem is that if you prove the viability of a route to generate decent volumes at £150 per sector, the locos know from their price elasticity experience that they can come on the route with a 186 seater and fill it. I don’t see a future for the Loganair model except for Highlands and Islands type services where volumes will always be low.

ETOPS; interested to hear your take on when this will all actually happen. I used to work for them and have also heard BHX, then MAN and perhaps BHD/SOU, but things continue to be kicked along the road with no firm dates announced.

How long can a “virtual airline” afford to take to get its act together? They have a bunch of people working for them, all being paid, an office (somewhere) requiring rents, still only one aged Dash on the books (or is it?) and apparently some pilots, crews and administrators all being slowly recruited if LinkedIn is to be believed.

But one thing they’re not doing is generating any income by flying anything, even the odd charter and certainly not (as far as I can tell), doing anything wrt crew retraining to make that happen any time soon. How long can that last?

Its all very well sitting waiting for the right moment to hit the market with something crowd pleasing, but from where I sit with experience of many years painfully watching Flybe drift from one crisis to another, I haven’t seen anything to convince me I wasn’t right to keep well clear of this revised operation when loosely offered the chance to get involved.

This one is easy. While other airlines are flying around trying to get whatever income they can to pay for their fleet and wages bill, Flybe can afford to wait until the time is right to actually make a profit. The low fixed costs are nothing compared to running services at a loss.

I hope you’re right.

There needs to be at least a couple of months from flights going on sale, to first flight operating, if only because pax will be a bit sceptical after March 2020. Granted operating empty flights would be a disaster... but when *should* that first real flight be ? Would maybe Jan 2022 give enough time to have everything ready for a photo opp with a cake ?

Davidjpowell

Interesting view. Flybe must now be paying for aircraft (otherwise they could not hold an AOC] and the bunch of consultants on day rates on not come cheap. They will certainly be burning cash and the only question is how much. You are then assuming every other rival airline is burning cash. How can you say that with certainty ?

Flight crew vacancies advertised on LinkedIn today
 

Adverts for Line Captains, First Officers, Cabin Managers, Senior Cabin Crew and Junior Cabin Crew all out on LinkedIn today.

I suppose I can't be certain. I'm pretty positive though!

The only way an airline can make money at the moment is if they can downsize their fleet to remove fleet cost, get rid of the crew (without paying redundancy), and downsize their head office costs in line with their current schedule. I don't believe that has happened. Airlines have saved what they can, perhaps made some redundancies and borrowed lots of cash. Logan Air for instance took a £25m facility.

If they get the right fleet and route structure they are going to come to market with no debt from the last 2 years. It will be interesting to see what difference that makes.

It’s likely not true that they will have no debt. They had a Dash 8 for a couple of months, have been paying management and consultants since start up and will have a huge advertising bill to replace all the Flybe broke stories that appear when you google them. It will depend how much they have in start up money but they are spending a lot with no income at all.

The Dash 8 they did have (G-CLXC), is no longer with them. It ferried across the pond to Canada, and has been de registered by the CAA on the 10th September 2021.

As I mentioned it will be BHX base to start with..

https://www.linkedin.com/jobs/flybe-...on=1&pageNum=0

Speculating here but I suppose a BHX base means there is a high chance they will be operating to Belfast, Edinburgh, Glasgow and Amsterdam - the old traditional Flybe stomping ground.

So they will be up against easyjet - who I suspect will try to stick around on those routes post Covid.

Intrigued to see how this fares!

Possibly, but I would put more money on the likes of STR, LYS, BER, NOC and possibly the Channel Islands.

On BHX / Scottish and Belfast routes business passengers need frequency and there could be a gap in the market if EZY don't offer more than 2 daily on GLA / EDI.

I can't see a fleet of more than 5 a/c in the first year.

Good luck everybody.
This isn’t Cyrus’s first rodeo and they wouldn’t be investing millions if they didn’t believe in this new airline.

On BHX-GLA/EDI, if easyJet remain and pick up volume, there's no gap in the market. It stops the old higher frequency low volume model from making any money as the volume to support it is cut away. IOM is the current case study. The "old traditional stomping grounds" are not the same as they were.

Looking at Flybe 2, it is technically possible for them to have no debt. The start-up costs could well have been funded through equity instead of debt but either way, it is money on which either a bank or the shareholder is expecting a fulsome return!

I think other airlines have done exactly as you describe (Eastern for one). Many airlines have taken on loans with Loganair included, and what isn’t clear now is where they all sit. Jet2 reported that they had taken a Government CCFF loan but their cash position was strong and if you look at the net debt position then it was quite strong. Others could well be in the same boat. I think the one thing you can say with certainty is that no airline will have taken on debt just to keep losing money and without taking actions to cut their cash burn radically. No-one is that stupid.

In other words, I don’t think anyone can say for certain whether or not Flybe 2 has a great advantage over others. It might have, but might not.

There is still a market for them but the landscape has definitely changed that's for sure. I see no reason why they won't be able to push the likes of T3, LM etc off most of their routes like they did in the past (obviously not the Scottish highland routes). We know T3 rarely stick around on routes when competition turns up and LM are all over the place with their fleet. They must have at least 5 different types currently complicating their ops? Not to mention their main re-fleet are circa 25 year old ATRs that are no match to the q400. I think its important to remember that a lot of BEs trunk routes were up to 5 flights a day, whilst that will not be sustainable any more, 3 flights a day could be. Also worth mentioning that a lot of the French regional routes that they served have are not being served by anyone so that market is still there for them. Also some key hub routes like SOU to CDG etc. There is a place for a smaller BE and if its debt free they stand a good chance.

There is a very good reason why those French regional routes are not currently being served, work it out for yourself!

Good post, but the reason they won't easily push a.n.other off is that they'll need to lead on price as a lot of people, certainly many regulars will know they went bust, closed down and left a debt trail. The price will have to be good. And Loganair have a load of old jets that can go head to head with a Q400 if that's felt necessary, and be honest, on short haul, Joe Public can't tell a 25 year old ATR from a 20 year old Q400.

SKOJB

Where did I say that they needed to be served straight away? Do you think all those people with second homes in France sold them during lockdown? If anything COVID has probably increased the chance of more people buying holiday homes. When things open up fully then the market will be there.