Jetmagic - Operations ceased!

[Flying Mech]

Just heard Jet Magic in Cork have gone bust according to TV3 News

[Vapor]

You got there just before me....

Here is the statement from their website

Quote
JETMAGIC SUSPENDS

OPERATIONS



Cork based regional airline, Jetmagic, announced the suspension of its operations with immediate effect this evening (Wednesday, January 28, 2004). On the recommendation of the Board of Directors, flight operations have been suspended and an Extraordinary General Meeting of shareholders will be convened to consider winding up the company.



In a statement Jetmagic said it was a matter of deep regret for shareholders, directors, employees and supporters of the project that despite wide acclaim, Jetmagic had not proved to be a viable operation. Expected passenger demand did not materialise, especially in terms of business travel. In the case of a number of routes – including Brussels, Rome and Milan - the company had already announced that they had been, or would be, discontinued. The decision by competitors to introduce flights to some of Jetmagic’s most successful destinations had also impacted on the company’s business forecast for 2004.



The company enjoyed high passenger loads on a number of routes – particularly those to ‘holiday’ destinations, including Alicante, Barcelona, Nice, Nantes and Milan. However, there were very disappointing bookings on business routes - Brussels, London City, Edinburgh, Liverpool and Paris - with only Belfast City achieving satisfactory levels.



Jetmagic’s shareholders invested some €10 million in the airline which started operations from Cork last spring, including investments made by existing shareholders In the past month. There were a number of expressions of interest from third parties, based on a revised three year operating plan. However the short term financial requirements of keeping the business going proved insurmountable, the statement said, and the Board had no other option but to suspend operations.



The appropriate Authorities have been informed of the position and their assistance sought in the matter of an orderly wind-down with minimal impact on the airline’s customers. A formal meeting of creditors is being arranged.



Passengers booked to travel with Jetmagic are advised to make their own alternative arrangements with other airlines. Those who have paid for their Jetmagic flights by credit card should contact the card issuer who should arrange for a refund. Passengers who have taken out travel insurance should contact their insurer. If they have paid by a means other than by credit card and they have not taken out travel insurance then they should send any claims to



Jetmagic

Refunds Department

5100 Airport Business Park,

Cork,

Ireland.





A special free phone number has been set up to provide information and advice - the number to call is 1800 301060 within the Republic of Ireland, and +353-21-4518915 from outside the Republic of Ireland. These numbers will be operational from 7am on the 29th January 2004.


Unquote

[Tom the Tenor]

I regret posting this bad news but tonight it was announced in Cork that Jetmagic have ceased operations. No other details at the moment.

As a Cork enthusiast Jetmagic meant so much to me and for the time being I am just devastated at this news. This is terrible!

[rookie skypilot]

I didn't think that CRK with a population of only around 100,000 could sustain the amount of new routes planned by Jetmagic. Maybe DUB could do with a premium service to Europe now that Aer Lingus have gone low cost.
Sad news alright.

[Tom the Tenor]

Jetmagic began routes to Britain last September coming to the end of the summer season. Hardly the best time. Routes to London City and Liverpool were were very poorly supported with Edinburgh performing somewhat better, perhaps sustainable at some time in the future.

Brussels was cut from two to one daily service around the end of August start of September 2003 and the route was axed completely at the end of October. It is ironic that in the last five weeks or so of the Brussels service the loads had improved and quite dramatically so at times. In recent weeks there were rumours that Brussels might have been reinstated - perhaps, not a bad idea!

On the whole Belfast performed satisfactorily and reasonably good loads have been sustained even through the winter period so no great problem there with Belfast.

The French destinations to Nantes and Nice did very, very well all last summer and were doing okay over the winter months too, not great but more than reasonable for the time of year. Paris CDG was a loser though and it should not have been - a 6 pm departure must have been a bummer - early morning surely would have been a better bet?

Alicante and Barcelona had wonderful loads throughout last summer and continued to do well enough through the winter. ALC and BCN were cancelled just once in recent weeks to the best of my knowledge.

Not as sure of how Milan and Rome have been doing over the winter. The loads were fine last summer and at the Christmas period there were quite a few 30+ loads. Yesterday, there were 28 pax from Milan. Both the Italian routes were due to be dropped for the coming summer. The dropping of Rome was disappointing but as it was a three hour flight there and another three hours back they probably wanted the aircraft to do some shorter sectors - there was talk of two new routes to France. Milan was more understandable as EI are due to go there twice weekly for the coming summer.

Brussels with two daily rotations, London City with two to three daily rotations and Liverpool with two daily rotations along with Paris CDG really helped to screw Jetmagic. They did have a new slot for a 0735 departure to LCY which would have meant better loads for the summer due to overflow from standbys on EI to LHR but that is just history now.

There was just not enough cash flow from the business routes in particular - I wonder is the moral of the story to stick to leisure routes ex Cork for a new entrant? Maybe so, but how sustainable on smaller regional jet aircraft and for bigger aircraft Cork is just too small?

What a sad day for aviation in Cork.



:(

[Eh Hello?]

Using expensive (presumably) jets and selling cheap was always a recipe for disaster, especially on unproven routes such as Brussels and Liverpool. Pity to see them go but I doubt that any of their realtively successful route(s) will be vacant for long - the phoneline between Galway and ATR is probably busy right now! Aer Arran got their Cork positioning right - gradual build and realistic expectation of what they can sell for - Jetmagic didn't. Welcome to de real world!

[michaelknight]

Bad news indeed.

Right idea, but I'd seriously question the number of routes they opened initally, maybe to many? I think to start they should have opened 3-4 routes, got a foothold on them and sustained decent load factors, and then reviewed the situation, and expanded from there.

Also, I have spoken to a number of people in the Munster region, who had never heard of Jetmagic! Not good news as this area would have obviously been their target audience. Furthurmore this would have been compounded by the fact that I never saw (untill recently) any ads in the paper re: Jetmagic. Recently I saw one in the Irish Times. Maybe they were advertising in another paper but I didn't see their ads!!

Shannon airport, should not have been too much of a threat to Jetmagic, as European destinaions are pretty limited from there, expecially if you exclude the Ryanair handful.

But the damage has been done, €11M debt in 9 months is not good news.

Michaelknight

[tashkurgan]

Very sad development. Having flown Aer Arann ATR and Jetmagic's Dornier and EMB, there is no comparison. Jetmagic will be sorely lost this summer. There is just so much turboprop flying that one can take - back to the ear muffs and a large paperback.

[Tom the Tenor]

From listening to radio phone ins etc this morning it is clear that the plain people of Cork were more than happy to try what Jetmagic had on offer especially to the sunny leisure destinations. It is far more evident now that the likes of so called businessmen just failed to support the flights to London City in particular. However, in saying that, it could also be argued did Jetmagic get it a little wrong in the first place by going to LCY? The last year BA operated to Cork from Gatwick they carried 160,000 passengers on the route - surely if Jetmagic had gone to LGW instead they would have had a far more captive market?

[tashkurgan]

You could be right Tom although I have used them for both business (LCY) and holiday (Rome) flights. If the new CEO saw that things were this grim last November, then he sould have cut routes, trimed down the company and concentrated on the holiday destinations. Time isn't on your side when you are loosing money. To your point regarding LGW, yes I would have used them on that route as well.

[BRUpax]

With regard to Brussels, I believe that their timings were all wrong. First of all the actual schedules were not ideal. Secondly, they began the operation just before the Summer when business loads traditionally go down. Not surprisingly the route bombed and they soon cut it down to a single daily, thus even less enticing for the businessman. In early September they dropped the route altogether just at a time when business traffic picks up after the Summer lull. I believe Brussels would have been a successful route had it been given a fair chance.

Anyway, sad to hear the news.

[mysecretsmile]

I was gutted to hear the news this morning regarding Jetmagic - my heart goes out to the 100 odd staff who fined themselves on the dole queue.

Lets hope the successful routes that Jetmagic operated can be picked up by other airlines, I certainly believe the BHD-ORK route will be snapped up (if I was a betting man my money would be on Aer Arann).

[ALLMCC]

mysecretsmile


Your suggestion that BHD - ORK might be suitable for Aer Arann would be OK as long as they they didn't make the same mess as they did with BHD - DUB. I'm sure you recall this barely lasted 8 weeks and the lack of success was due to poor scheduling and fare structure which hardly encouraged healthy support. If they can come up with suitable timings and fares than they would have as good a chance as any of making a success of it.

However, it should be borne in mind that one of the attractions of Jetmagic service was its speed - the ATR would be considerably slower which is why the Q400 of Flybe might be much more suitable.

[runawayedge]

Jet Magic were doomed from the start. The delay in obtaining an AOC, having 3 aircraft on the ground while leasing others, the wrong aircraft, delay in certification for London City, using Cork as a hub, how could 100,000 people support this level of service particularly when they are part of the expectant low yield Irish market. There were so many questions. even if it had worked, a loco seeing the success would have wiped them anyway. Cork has improved in recent times but I think future growth is in the charter market. I do sympathise with the staff, and investors who had the balls to run with this project. You all know how to make a million in aviation....start with ten

[controller friendly]

:( :confused: :(

When i first saw the cancellation to BHD this morning I thought it was just another weather problem....unfortunately not.. :(

Sorry for all the people who's livelihoods depended on them....good luck in the big bad world...:uhoh:

[Harry again]

Condolences to all there, especially Nick C, respected former colleague. (My best wishes to you and yours, Nick, good to see you a few months ago).

Strange that in a time of world-wide air travel boom, the jobs market is so poor, and so much bad news presents.

[No comment]

Sad news, condolences to all involved.
Correct me if I'm wrong but was the LCY Embraer certification initiated by Jetmagic? If so then at least one good thing came about from their existence.

[CCR]

Runwayedge, most of what you say is correct. However, the pop of Cork is about 250,000 to 300,000 now. Including the commuter towns and its about 1/2 million. Expect to see RE grow its base there!

[LVL CHG]

How much longer until DUO collapses too? I guess BHX is a much larger city than Cork, but operating expensive jets (read high CASM) with few seats can't be good without possible hub connections.... I hope DUO can manage much better and learn from the Jetmagic disaster...

[Ace Rimmer]

It a great shame...a good idea maybe just the in the wrong place?

No Comment: Yep it's my understanding that it was jetmagic that pushed for LCY certification at least that's what the Jungle jet gang tell me.

I too would notbe surprised if Padrig and his merry gang aren't working on expansion plans right about now.

[runawayedge]

Yes the city population is about 100,000, with surrounding about 250,000. The only possibilities for RE is Belfast. All the other sector legs are too long for an ATR. It has just proven again that Dublin, Cork and Shannon just cannot provide a decent yield. Growth possibilities are now limited to holiday type destintations out of Cork. If RE did decide to take up some of the routes they are only developing routes for a loco to pounce if they prove viable.

[KAT TOO]

I agree it will be an uphill battle for DUO,with very few airlines making any money any one with out an established market are going to find it tough going. If magic lost 10 mill in such a short space of time i dread to think what the up front cost of someone like Jet2 must be, brave men and deep pockets (i hope!!)

[Tom the Tenor]

Runwayedge, two of Jetmagic's routes, Jersey and Nantes are very likely to be taken up from Cork. If RE decided to take them up with their ATRs they are surely within the range of their aircraft.

So, if Jersey and Nantes are taken up by another carrier that will mean that with the arrival of EI on new routes to BCN, ALC and Milan it will mean that 5 of Jetmagic's 11 routes will still be around come the summer. Regretably, I am choosing to exclude London City and Liverpool for any further development from Cork for the forseeable future. However, and I am sorry to keep pressing about this so much, there is an opportunity there for a Gatwick service.

Also, it has now be proven that flights to Belfast with good timings will work. Jetmagic's last ever flight to Belfast on Wednesday evening had 24 pax out and 21 pax in - they are good loads given the time of year. Bearing in mind that FlyBe are pulling out of Cork on their BHX service at the end of March for what they believe will be richer pickings to Perpignan I do not see them trying Belfast - Cork again like a few years ago. I would like to be pleasantly surprised, though!

[runawayedge]

Jersey and Nantes are too seasonal for RE, have my doubts about the yield too. Assuming peak slots were available to Gatwick RE could not possibly make any money out of there with an ATR. Needs min 100 seater. Why did CityFlyer cease with the RJ...me thinks they were having yield difficulties. A successful route is not just volume. I am lead to believe the load factor on Belfast with Jetmagic was 40%. I also hear RE are concentrating on developing out of GWY presently. Do they have capacity. Belfast will work at a proper time say 7.30am departing 18.00. Jetmagic was just too early. Finally, Tom, my original point EI have proven that the future for Cork is scheduled or charter operations to sun spots.

[CCR]

I agree with Tom the Tenor, RE should go for Belfast, Nantes and Jersey. Will miss the GX service to Nice! Runwayedge, even Limerick has a larger poplulation than 100,000. The greater Cork area including all its commuter towns has a population of 1/2 million people. I know, I live here;)

[Tom the Tenor]

BA had all ready bought out City Flyer by the time they chose to axe Cork. Cork was axed because of corporate greed by British Airways managers. Cork was profitable but BA wanted more so they decided to use the aeroplane to try somewhere else.

City Flyer used ATR-42s, ATR-72s and BAe RJs from Gatwick so a full spectrum of different sizes there. Something the size of a ATR-72 or bigger would probably be best for LGW all right.

As for EI Cork is just an irritation. The closest EI has come to creativity in Cork is to axe Dublin leaving all the fat to RE and to cut LHR for the coming summer, cut Paris and cut Amsterdam to provide 2x7 services to BCN, ALC, Milan. What geniuses!

Yes, I just want to add my support for the great service we had to Nice - five times weekly last summer to zero this year. Great loads too. Such a shame!

[Eh Hello?]

Given that RE's earliest Dublin flight only leaves Cork at 7am, imho any additional early departure opportunity from Cork would be more profitable heading for Dublin rather than Belfast? RE were badly bitten by Belfast last year - a 44-seat ATR may just be too big a challenge for such a thin route when there are other more lucrative Cork or Galway opportunties around.

[runawayedge]

Agree with eh hello re better opportunities. Pop of Cork City is 127,187. City and County 420,510. Limerick City & County 175,529 and surprisingly Galway City & County is now bigger than Limerick...just got that from irish gov census. Galway now 3rd biggest city. However, back to my point without labouring it tom, BA and EI have diluted Cork because 'they cannot get the yield' on UK routes from Cork or indeed other irish state airports. Check gatwick peaktime charges. A 72 will not work. You will fill the aircraft, and lose your pants. 66 seats will NOT pay. You need min 100. Many to the sun is future for CRK.

[CCR]

Runwayedge, if you live in Cork, you would know that the city boundary is only 3 miles...thus the majority of Cork's suburbs are not included in the census!! However, the county figures include suburbs + commuter towns = almost 1/2 milliion! As a Belfast native living in Cork for the last 10 years, it is not much smaller than Belfast! I travelled the GX Cork to Belfast service many times, always good loads! The reason why RE Dublin to Belfast service didn't work was that the cities are only 100 miles apart...too close and crappy flight schedule.:cool:

[runawayedge]

CCR I agree completley with all you've said, Dublin Belfast was mindboggling, but again Tom and yoursef are missing the point...will you get the yield on a double daily to Belfast. Another point...will RE continue all their current Cork routes....doubt it...Birmingham with Flybe gone yes, Dub yes, Edinburgh yes with magic gone, Southampton...jury is out...Bristol.....hmmm

[Doors to Automatic]

The problems were down to yield as well as load factor. On the longer "more successful" routes like Rome the yields they were achieving would have required 90+ passengers to break-even. A tall order on a 37-seater!

All in all an ill-thought-out business plan using inappropriate aircraft for the wrong markets. Sadly the airline was doomed the day it began flying which is a shame given the outstanding level of service which was provided.

Condolences to all who have lost jobs particularly those who swithced from other jobs in the industry in order to be part of a vibrant start-up.

[runawayedge]

My sentiments doors...

[Helipolarbear]

My condolences to all 110+ Jet magic employees!
Based at CRK, I watched daily the pax loads. They were chaotic in percentage, but never the less yielded an on going average that appeared to be slowly increaseing. Lot's of out going payments that didn't match the revenue returns!
37 pilots for three aircraft,Hosties,engineers, gound staff new call center, Own maint, Aer Rianta charges as well as the other airports charges abroad, leased Turboprop's from Germany, even a sub charter of Westair's HS 125-700.........the mind boggles. Nothing wrong with the Operational end and the people involved. Great team environment evidently. However,
The Biz Plan and marketing was hopeless. A serious lack of strategy and awareness of the ficleness of the industry.€11 million debt in 9 months. Was an audit completed at the 3 and 6 month mark?
RTE were very eager to announce the poor 40 lads who were stranded in Cork for a stag party! But they seemed to miss the point of the seriousness situation of 110 people losing their jobs who have mortgages, car payments, kids etc, let alone the relocation move and change that will impact them financially!
I hope they all get jobs very soon, despite the dark clouds Ryanairs senior exec's announced recently for 'Low Cost' airlines.
Good Luck to all at Jet Magic.:(

[Tom the Tenor]

More bad news this afternoon. I have heard that Serviceair at Cork are about to lay off up to half it's staff following the Jetmagic collapse. Wonder what are the chances of many of those staff being taken on again later in the year as the IT season begins? Hopefully, some, at least.

[MarkD]

Once again condolences to all at ORK, at least they were an airline offering more service rather than the less we are getting all too used to elsewhere. Perhaps an all-EMB135 fleet would have made more sense but obviously the 145s were a bargain post Swissair.

While others recall ATRs and RJs on ORK-LGW, I think it was a Dash 8 took me there in late 2000. The advantage of the dash being it could land straight in on the E-W runway at ORK.

It would be nice to think RE would do a deal with BA and re-instate LGW, especially as it would open opportunities to fly home cheap in the winter on Air Transat and Zoom to LGW! Let's face it if BRS and SOU can support a AT7, why can't south London?

[galley-wench22]

KAT TOO

From the initial press release when Jet2 launched, the set up cost was 2 million GBP.

[No comment]

Mark D good point about the RE LGW op, however Zoom dont have a Winter programme at Gatwick this year. Air Transat do but not much of one. Still I think you'd fill an ATR on the route without OOM & TSC...

[Dash-7 lover]

One of their EMB135's dived into the Isle of Man the day after they ceased ops, for about an hour and then shot off somewhere......maybe to drop of the remaining cash in an Isle of Man bank??????? Anything to do with an ex-Manx Airlines boss perhaps....(alledgedly!)

[Tom the Tenor]

I understand the ERJ 135 flew from Ronaldsway to Southampton.

The Cork Airport passenger figures for Jan 2004 were up 22 per cent on Jan 2003. Any future growth for Feb-March will be so much less now with poor GX gone.

Such a shame about GX.

[glynn-kayes]

Apparantly,their best peforming route regards to business travel wasORK-BHD and that service only just paid for itself and did not make a profit,and just about paid its way.All in all a very sad day for irish avaition and the people at Jetmagic.Thank God im retiring from this industry next Friday,and will give a rundown of events as I see and chose.,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,, ,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,, ,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,, ,,,,,,,,,,,,,,,,,,,,,,,,

[Headset starter]

MarkD,

Surely the operating costs of both Embs are very similar, and given the 145 has 11 more seats, Jetmagic would have prefered filling those rather than a fleet of 135s.

The 135s were obviously essential for the LCY route, but without knowing much more than the population figures for ORK it must have been difficult to get serious load factors on thin routes with the 145s.

However if you do your marketing correctly, and understand that you have traffic waiting for you then its a different matter. From what I read it took them 2 years to get their business plan written, so surely in that time they could have done some decent work and gathered enough data to ensure bums on seats.

I believe they (or someone else) should look elsewhere in the UK to take their operating model, and they will probably make a real success from it.

HS

[Tom the Tenor]

Jetmagic's leisure routes worked. Nantes, Nice, Barcelona, Alicante, Rome, Milan worked well with fine loads last summer and even through the winter the loads, I am sure, were well within Jetmagic's business plan.

The dismal failure of two Brussels flights, London City, Liverpool and a badly timed Paris did the damage and not having a summer schedule for 2004 ready before Christmas last did not help too.

[CCR]

I think they made several mistakes, the initial AOC debacle, having to wet lease aircraft whilst the embraers were grounded, the delay in the 135 certification to LCY, under financing of the company. It seemed overstaffed, 37 pilots for 3 aircraft. Their passenger numbers in their unsuccessful routes were growing slowly. If only GX could have lasted the winter.... What startup airline expects to make profits in their first year?
The best hope for Cork is for RE to grow its base there. It will be interesting to see if EI add any more routes ex Cork now that one of their competitors is gone.:(

[Red Four]

Isn't it about time someone took their web-site off line? Or at least put some warnings of the situation for potenetial customers to see.

4

[Cyrano]

Red Four:

When I go to www.jetmagic.com I get a rather stark "Jetmagic suspends operations" statement, which seems like enough warning. (Admittedly the other day it was still possible to get to the "original" pages if you knew the addresses or if you searched via google, but anyone browsing casually would find the home page statement first.)

[Tom the Tenor]

Was up at EICK yesterday for a little while. Sad to see the Jetmagic sales and office area so abandoned and left as it is now as a shrine to failure. I wish the geniuses that run the place, Aer Rianta, would now clear the site. Even putting the Christy Ring statue back in place would do for a start.

Also, it is likely that at least another generation or more will pass before we will ever see a new start-up at Cork again. Maybe never?

[runawayedge]

Is a pity...guess the guys at Cork were faster at seizing the aircraft. Might not see it as detrimental to their brand retaining the remnants of a failed airline based on their patch. Makes one think...

[Red Four]

Cyrano :ok:

thanks, I hadn't noticed that; as I guess like a lot of folk, I had the particular web-page I was interested in 'favourites' , and it still takes you right there.

4

[FlyingV]

Chief Exec is hopeful rather than condfident

http://www.onbusiness.ie/2004/0216/jetmagic.html

[lowfaresbuster]

with Aer Arann jumping in on the ORK-BHD route, BmiBaby starting a new London Route, Aer lingus starting Barcelona, Milan etc., 37 pilots and no plane, €3.5 million of Debt and Cork consumer confidence gone, it will take a gutsy investor to put his cash into this. Also the return on investment will only happen if this company makes profit- there will be no buy-outs like FR-Buzz, Easy-Go as the airline has no valuable slots/brand.
Maybe they would be better off starting a new airline in Shannon or Derry.

[CCR]

There is a lot of interest in the Cork Business community on a rescue at this late stage or even another startup. Shannon already has Skynet and EUJet based there. As for Derry, I heard rumours about Ryanair starting a base. We'll have to wait and see.

[lowfaresbuster]

CCR, EUJet's base in Shannon doesn't provide it with any scheduled traffic.
Ireland has 3 main cities, served by DUB, ORK and Belfast(x2)- these have been proven to be dominated by low fares players for the last 5 years, excluding newer entries to low fares arena like Aer Lingus and Aer Arann, well over 70% of the scheduled traffic from the 3 main cities is low fares, travellers are used to the extemely low fares offered by these airlines.
JetMagic was trying to be everything that Ryanair isn't, were Cork people willing to pay for this?- the short answer is no.
For every 300 passengers that fly ORK-STN every day, there was only 15 willing to pay a premium to go to London City with jetMagic.
Cork doesn't have that many City-Slickers looking to go to the square mile in London, in any case Aer lingus to Heathrow is just as cheap and convenient to London City.
I wish jetMagic the best of luck, but where I think their business plan went wrong, is that they were afraid to get a big plane and stack the customers high and cheap, as they were afraid of the bold Mr. O'Leary coming in and spanking their bare bottoms, the opening for these were Alicante/Malaga/Belfast; these are all now gone.
And as for Mr. O'leary- his pig headedness and moratoreum on new routes ex-Ireland until Aer Rianta go on a fact-finding mission to Charleroi (to see how real airports are run) has opened the door to Aer Lingus, HLX, Germanwings & Basiq Air in Dublin; and Aer Lingus in Cork (the same door that was open in Cork for Jetmagic).

It remains to be seen if all the Corkonian business men will dip their hands in their pockets to bail out "Air Examiner"

[AlanM]

Shame - nice friendly pilots who came into LCY.

Gone but not forgotten!

http://www.pbase.com/image/24961149.jpg

[Tom the Tenor]

Whilst Cork's Merchant Princes decided to say a big 'No' to Jetmagic it must again be stated that quite a lot of the plain people of Cork did try and liked what was on offer at GX. The good loads on the leisure routes is testimony to that.

I cannot help being just a little suspicious about the crocadile tears now being supposedly shed by the chamber of commerce types. Feeling just a little guilty, are we, boys?

[Eh Hello?]

Tom,

You can't expect business people to support something if it is not delivering what they want, nor can you expect a business model to succeed if it is very fundamentally flawed. Business people will look for convenience and cost ahead of loyalty to a local business. If LHR offers more choice of service or if, like the majority of passengers to London, they need to visit somewhere other than the East side of the city or catch a long haul connection, then LCY would be a second choice. Gatwick was a huge opportunity overlooked by JetMagic. Bmi Baby have now closed that gap.

It would be interesting to see on what basis Jet Magic thought there was a market for a double daily Brussels service, or indeed a double daily Liverpool or Edinburgh, the latter putting a double daily Embraer (needing good financial returns) up against Arran's nosier. longer but relatively low fare ATR. Did Arran collapse - no. Also, whilst they were well known in Ireland, how did they sell from the other end of the route? I'm sure they would not spend big bucks in Italy for a three per week service to Cork (eh, wheresa dat?). The final admission of getting it wrong was their acceptance that you cannot sell everything yourself and decision to finally sell on travel agency systems and pay commission.

If Jet Magic moved away from the "sexy sleek new jet into City" idea and had started with a few cheap MD80's or Fokker 100's, they may have succeeded. Whilst there was definite demand for their leisure routes, the economics of using Embraers with relatively low fares just didn't make sense. Medium sized jets, Gatwick instead of City and a low fares (not cheap and cheerful, but economic low fares) approach may well have worked.

Maybe nobody wanted to tell the emperor about his new clothes?

[lowfaresbuster]

Eh hello-
I agree with all your points.
Especially paying travel agents a commision of €1 per sector.
The average booking in Ireland is a return flight for 1.2 people, so Jetmagic was paying travel agents €2.40 on average per booking-the travel agents in Cork are charging booking fees per head of between €15 and €25 anyway, so none of them were turned on by this commision (that cost more to administer than what it was worth to either party), the customer will always have dictated what price/aiport they want anyway; so if an agent can sell them an Aer Lingus Fare to Heathrow cheaper, the chance of the agent being bothered to convince a customer to go with a higher fare to LCY with jetmagic for the extra revenue of a price of a cup of coffee is zero.

Also their website didn't work half the time.

[AlanM]

When they decided to fly in to LCY with the Embraer, they did a few proving flights as part of the CAA type approval.

Who paid? JetMagic or Embraer??

Alan

[runawayedge]

Tom...without being rude, if you go back to the early days of this thread, if you listen to the post mortems on Jet Magic, the simple facts are it was the wrong aircraft, in the wrong place. Aer Rianta airports equal low cost and therfore low yield. The market is used to it and will not support an operation like Jet Magic. A bigger aircraft may have worked. The product was flawed from day one. Sadly, it's over...time to move on

[frogone]

Got to disagree with the 'wrong aircraft' point to a certain degree. I appreciate this was the case with LCY as the EMB was not certified to fly into LCY at the start of operations, therefore a bit more forward planning could have been done on this aspect.

But I think the EMB for Cork wasn't a bad choice, starting a new airline especially out of Cork, one of the first to be based solely out of Cork, was a challenge but. Firstly the aircraft was a jet which is a plus, at the end of the day, they could have picked the ATR42/72 which has similar capacity, but went for the jet instead, which I think was a good idea. But I don't subscribe to the point that a larger aircraft should have been used.

The EMB 135/145 is easier to fill than a B737 say circa 150 seats. At the end of the day it comes down to the load factor, if you can get the 50 seats filled on the 145, well then 100%LF, and that's got to make money, but on the other hand if you use a B737 and fill say 50 seats of 150 avail, that's a LF of 33%, and that doesn’t make money.

Where JM went wrong was not solely down to aircraft choice it was simply they started too big. With a huge route structure, all over Europe. The should have opened tops 4 routes, 2/3 to the UK and 1/2 to continental Europe. Tops. Get a foothold on those routes, and be recognised as the main carrier on them, build up a good image on them, punctuality etc. Reassess the situation, and then worry about expansion onto further routes.

City was a bad idea from the start as the aircraft wasn't certified to fly into LCY. City gives off this 'groovy' place to fly into, mainly for business travellers, but at the end of the day, if the suits weren’t going to fill the seats, Gatwick was the better destination, at least there are far more connecting flights especially for the 'bucket & spade brigade' who would have filled more seats. And not forgetting the business travellers, there's always the Gatwick express to get you into London in 30 mins. Sure isn't that the time you spend over LHR in the hold these days?!

The idea of an airline based out of Cork, wasn't a bad idea, it could, and should have worked, but it was executed badly with some over ambitious plans. Now with Aer Arann taking a few routes from Cork, BMI baby on the scene, Jet Magic maybe at this stage is a lost cause.

Irishrover

[brabazon]

Irishrover, you say:

"The EMB 135/145 is easier to fill than a B737 say circa 150 seats. At the end of the day it comes down to the load factor, if you can get the 50 seats filled on the 145, well then 100%LF, and that's got to make money, but on the other hand if you use a B737 and fill say 50 seats of 150 avail, that's a LF of 33%, and that doesn’t make money. "

Load factor alone isn't everything - the key is what is your break even load factor based on "realistic" fares and then what load factor do you achieve and at what fare levels.

The 737 may have a higher breakeven level than an ERJ in pure passenger number terms - that's just a measure of the difference in costs, but I would argue that a 737 offers the ability to have a mix of fare levels - to stimulate demand with cheap fares and then late availability higher fares to make money. It seems with JM that they started with low fares to stimulate the market, but were unable to get the higher yields from the business passengers. Wasn't the load factor on Brussels something like 33%? Don't know what it was on LCY, but even with only 37 seats the ERJ 135 needs a number of regular business-paying passengers to make money - it sounds like they weren't coming forward to fly on JM.

It's not easy setting up an airline and even more difficult to make money out of it, and yet investors seem to be willing to part with their money in the pursuit of a dream.

[frogone]

brabazon,

Fair point I simplified the LF thing too much, yes I appreciate that there can be a mix of seat prices, so with a 737 there's more scope to charge differing fares. Just the point that was made earlier in the thread, that a 'bigger' aircraft should be used, how big B747/B777? Still think the EMB wasnt a bad choice, if you can fill with proper prices.

The Brussles route, I'm not too sure of the LF, I heard, now only heard that the average LF was 27% over all routes, now could be total trash.

I would also highlight the fact that I never saw any ads either TV/Newspaper for Jet Magic, I did see just the one in the Irish times about a week before they went under. A number of people I spoke to in the Munster region had never heard of them! Which is poor form, considering there are limited European services out of Shannon, and a good 3 hour drive on average to Dublin from the Munster area.

Irishrover

[teachin]

Brabazon, you say "It's not easy setting up an airline and even more difficult to make money out of it, and yet investors seem to be willing to part with their money in the pursuit of a dream."

True it is not easy to start up an airline and true difficult again to make money but your third point that investors are willing to part with money doesn't seem to be completely true. Look at NOW, perfect location - Luton, perfect aircraft selection - 737, good route network selection, low-cost - popular trend being taken up, yet investors seem not to want to fund them, still they remain unfunded, many false starts and still no airline...

[Cyrano]

Teachin:

Let's say that there is scope for differing opinions about the "perfection" of some of what you cite for NOW. In particular I would not regard Easyjet's home base as the "perfect location" for another low-cost. And as for "good route network selection", the jury's out on that one in the absence of a definitive list of destinations. Low-cost is a popular trend which established itself in the UK a few years back but "*being* taken up" in the UK? I think it *has been* taken up... and then some: the market's saturated.

In addition, you didn't mention Now's wrong-headed flat-rate pricing model which - IMHO - was on a fast track to nowhere.

Somehow I think these might be a couple of the reasons why the investors steered clear.

Happy to debate this over on the Now thread if you want.

We now return to our regularly scheduled Jetmagic programming...

[runawayedge]

teachin, in fairness the NOW thread is the place for your points, let's not try and bring that in here. There is enough opinion including plenty of yours totalling 10 pages there on NOW. One is a potential birth, sadly this is a post mortem.

[Hogg]

Lads, can u please read the thread titles before posting!

This particular one is "Jetmagic-Operations ceased!"

doh :ugh: Thanks Hogg