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-   -   Flybe-V1 (https://www.pprune.org/airlines-airports-routes/637085-flybe-v1.html)

Albert Hall 8th Sep 2021 16:47

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.

OzzyOzBorn 8th Sep 2021 17:36

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.

Flightrider 8th Sep 2021 17:57

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.

OzzyOzBorn 8th Sep 2021 18:07

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.

Skipness One Foxtrot 8th Sep 2021 18:33

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

OzzyOzBorn 8th Sep 2021 19:30

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?

Skipness One Foxtrot 8th Sep 2021 20:38

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.

OzzyOzBorn 8th Sep 2021 21:40

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.

willy wombat 8th Sep 2021 21:53

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

fjencl 20th Sep 2021 18:51

Any news ?

Blackfriar 20th Sep 2021 20:56

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.

cavokblues 21st Sep 2021 07:27

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.

RVF750 21st Sep 2021 16:03

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.

Skipness One Foxtrot 21st Sep 2021 18:34

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.

Flightrider 21st Sep 2021 20:45

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.

willy wombat 21st Sep 2021 22:13

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

fjencl 22nd Sep 2021 12:06

Any news on what base or bases will be starting up

ETOPS 23rd Sep 2021 08:47

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

ajamieson 23rd Sep 2021 16:18

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.

Skipness One Foxtrot 23rd Sep 2021 17:56

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.

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