O'Leary suggests Jet2 and Globespan will go bust

[openfly]

On UK Channel 4 7pm news today, O'Leary, Ryanairs mouthy boss, announced that Jet2 and Globespan ''will go bust'' this winter. I hope he gets sued for the comment. Mind you he would love the publicity. There must be a law against damaging the reputation of a competitor.

[Airbubba]

He's probably right, a lot more shoes to drop in this down cycle...

[webby1919]

Jet2 and GSM will still be here next year. LS have a notice on their website from their Chairman telling Mr O'Leary that Jet2 have all their fuel hedged through to S09.

GSM have got lucrative, cash-rich, leases for W08 and S08 which will bring in plenty of cash to keep the airline afloat. TD is not a silly businessman, he is shrewd. GSM have most of their S08 fuel hedged too. O' Leary is just trying to divert the bad publicity away from FR after their results were issued today with a stark warning that FR may only break-even next year, which is a big drop from €409m profit this year.

[tristar500]

Although I do agree that MOL is a mouthpiece, I also agree that his comments regarding 'said airlines' are not too far from reality...

If BA are considering parking parts of the B737 fleet as are Ryanair, then God help the smaller guys who dont have the 'cushion' of having mega-bucks behind them...

Not that I want to see the smaller guys go under, but economics determine the viability of a company and right now, fuel is a major concearn for all...

[Afinehelmet]

I don't think GSM will go bust just yet. Although there was a huge loss last year, the company still has some solid business this year to help with their recovery. Loads are good so far.

However, if GSM experience any sort of re-run of last year then the loyal customers who put last year down to a "blip" may well leave. GSM will then be in a lot of trouble. This summer and winter season is crucial.

[Flyit Pointit Sortit]

If people don't pay for tickets because they are worried that the airline may fold then they might actually go bust. In this respect, MOL will have achieved his aim:=.
Similar to the interview with CC from CTC in Pilot magazine forecasting a massive shortage of pilots. The aim to get more people through his school to get into the promised land beyond.

As our CEO knows, it's all about managing expectations.:ugh:

[harrogate]

MOL's not completely out of touch with reality at all, but he's been uncharacteristically very naive with these comments. Not because he's necessarily wrong, but it's just unprofessional and it shows he's bothered by the competition, even if they're only small fry.

But his big goof was to undermine the viability of competitors on the grounds he did. It merely causes consumers to question their faith in the whole lo-co industry, potentially making them wary of buying tickets with any of the budget airlines.

I'm Joe Public and I'm definitely more cautious about buying tickets with any of them at the moment. What MOL said today set a few more alarm bells ringing.

Ryanair aren't immune from the concerns MOL clearly has about the industry at present. Au contraire - as a major player, they'll feel any adverse consumer reaction harder than most, in the some way they reap the rewards of positive consumer responses.

He needs to keep his gob shut. For his own good.

[webby1919]

GSM had a bad year in 2007, but the good thing is that they have learnt. TD has realised that the airline side of the business (remember this is not the only business that GSM have, they own hotels, travel agents, property, etc) needs proper management to manage and has employed a CEO, and Engineering Director, etc, to manage the change currently experienced at GSM. If TD had thought the airline was not worth investing more money in, he'd simply have called it a day the end of S07.

Loads are up, flights are near the high 90% on lots of flights and most are full to capacity. Winter was no exception. W08 is heavily reduced as GSMs fleet will be reduced with the disposal of the B733s and B736s, leaving only B73Gs and B738s. Just hope that the S08 flights are going to schedule and no interruption to the SH A/C to rescue the LH like last year.

[allanmack]

Think I'll listen to MOL's exact comments before judging him. What I do know is that he is very shrewd and although he spouts out the odd rediculous comment, people do sit up and take notice of what he says. One thing's for sure - it is going to be very stressful times for the airline industry and there will be further casualties in some form or other. Nobody can afford to be complacent and think that hedging or aircraft lease will fully protect them.

[daz211]

The truth hurts, alot of people hate MOL but you have to admit
the man knows what he is talking about.

I dont wish any airline to go bust, some will and MOL has a better
understanding of the situation than many people on this site.

[harrogate]

people do sit up and take notice of what he says.

And what he's saying now is that the whole industry is on shaky ground - especially the lo-cos.

Doesn't fill you with confidence in any of them does it? I've witnessed first-hand today the effect this kind of spouting has, with my two of my colleagues seriously re-thinking booking an Autumn break they've been wittering on about for weeks.

People aren't as loyal to airlines as some of these execs would like to think. Most people don't give a sh*t about which lo-co they fly with, so long as they can fly where they want to at a decent price. The vast majority of people don't have a favourite budget airline.

A better PR mind wouldn't have said what MOL did. His militant side isn't always a good trait. It is sometimes, but not on this occasion. He needs to find a way to spin some semblance of confidence into the situation, while everyone else in the industry is preaching doom and gloom. Instead he's handed it to Meeson to inject some positivity, which he duly did, to be completely fair to the chap.

In the war of words at least, it's Jet2 1 - Ryanair 0.

[Sunfish]

The truth hurts, alot of people hate MOL but you have to admit
the man knows what he is talking about.

I dont wish any airline to go bust, some will and MOL has a better
understanding of the situation than many people on this site.

I'm afraid Mr. O'Leary is talking about what he would like to see. He is doing it for a reason - to try and shift a few travellers in his direction when they make longer term travel plans, to unsettle a few bankers and creditors of said airlines, and in general make life just a bit more difficult for his competitors.....not a very nice thing to do at all.

To put it another way, there is an American businessman's quote somewhere in print to the effect that "If I noticed one of my competitors out of their depth and drowning, I'd try to ram a firehose down their throat and turn it full on." That's all Mr. O'Leary is trying to do.


Then there is the little matter of projection. People have a habit of projecting their own failings onto others. Exactly how sound is Ryanair? And please don't tell me about the mountains of cash, it's the difference between total assets and total liabilities, both of which are non-cash, that count.

In my opinion, what you are seeing is the MOL master plan unravelling.

This plan was:

1. Undercut all competitors by selling core product at less than cost of production.

2. Drive competitors out of business.

3. Raise prices in the absence of competition.

4. Profit.


Again, in my uninformed opinion, if oil prices remain high, then the chav's and chavettes won't be flying much. Aviation will once again be the province of the carriage trade who demand certain levels of service and decorum, which MOL is constitutionally unable to provide.

Just my two cents worth...

[JulietNovemberPapa]

harrogate (http://www.pprune.org/forums/member.php?u=126969). Location: Leeds

Jet2: Leeds/Bradford.

What a coincidence. :oh:

I bet he wouldn't care if SkyEurope - an airline that'll almost certainly be gone within a year - was mentioned rather than Jet2. :E

[A320fan]

harrogate (http://www.pprune.org/forums/member.php?u=126969). Location: Leeds

Jet2: Leeds/Bradford.

What a coincidence. :oh:

I bet he wouldn't care if SkyEurope - an airline that'll almost certainly be gone within a year - was mentioned rather than Jet2. :E

What has that got to do with anything??

Harrogate proves a great point that MOL went shouting his gob off saying that Jet2 abd Globesapn will go bust, he didnt think of the responses that he would get! Phillip Meeson made a cracking reply which puts Jet2 in a very strong position as even the average joe public knows that comments like MOL's are for publicity and the fact that PM has a subtle response which is much more effective than shouting absoloute rubbish on national TV......

.... altough i may just think that because im from near Leeds too ......

[The Real Slim Shady]

And you lot obviously know better :ugh::ugh::ugh:

Even the easyjet Switzerland CEO believes that only Easy and FR will survive of all the LCCs.

Next thread please.

[The Member]

I know MOL has got a reputation for taking an aggressive public stance but he runs a successful airline whatever one may say. In respect of his statement concerning Jet2 and Globespan I hardly think they are a thorn in his side on many routes.
Globespan would have been in a stronger position to weather the storm if TD had placed the airline under a proper management footing in the first place.
They have lurched from one crisis to another since their conception.
I wish neither Globespan or Jet2 to fail but there is not enough room in the current market place for them to survive longterm , and I think MOL will regrettably be proved right in his statement.:sad:

[The Desert Ferret]

The great MO'L dropped a bo??ock hedging his fuel this year and getting bitten rather badly.

Don't expect great profits at Ryanair this year.

Pre-emptive attention deflecting strike?

Love him or hate him he's interesting (and successful).

I'm intrigued how airlines and airports have "fan bases" like football teams do with the appropriate impact on objectivity.

[jiffajaffa]

WHY DID HE PARK HALF HIS AIRCRAFT UP DURING THE WINTER?


Lets do the maths... half of 168 (FR Fleet) = 84

MOL says 20% of FR aircraft parked up for winter....

20% of 168???

Anyone care to share?



MOL TALKS UTTER SH8T ..LETS BE HONEST..


MOL is a gobby git but look whos talking the sh*t now...

[Local Variation]

R5 today ran a broadcast and the 'analysts' predicted a gloomy outlook for short haul UK carriers. If this turns into a bloodbath and survival of the fittest, it will be those with the deepest pockets allied to the best control of costs that see it through. Cash is king.

Whatever you say about the man, MOL is an astute business leader with a sharp eye on the cost base of his company. His profits are made from tightly managing this cost base and he is going to be a fiercesome competitor to have for the next 6 months. His sounding out this week is akin to "ding ding Round 1". If Ryanair are predicting flat margins for the immediate future, then someone(s) will catch a cold and he's already looking at bayoneting what he perceives to be the weaker sisters.

It was also interesting to see MOL seeking European bases of his airline to share in the financial pain. Can some airports survive at their current stature without supporting his request ?

[A320fan]

Exactly Ryanair has messed up with their fuel hedging whereas Jet2 have theirs sorted throughout Summer 08, Winter 09/09 and Summer 09! As mentioned earlier so have Globespan so for now these two are here to stay! Who knows what will happen after these periods but one thing for sure is that Jet2 & Globespan are projecting profits, albeit small profts for this and next year however Ryanair is only expecing to break even due to their cr&p managament of fuel prices!! Very clever to be flying passengers who only pay a small fare with oil at $130 a barrel and no protection whatsoever!

[r-u-m-o-u-r]

O'Leary is a despicable leprauchan gimp.

Unfortunately he's probably right though

[JulietNovemberPapa]

Even the easyjet Switzerland CEO believes that only Easy and FR will survive of all the LCCs.

Next thread please.


I agree. Let's go!

[harrogate]

harrogate. Location: Leeds

Jet2: Leeds/Bradford.

What a coincidence.

I bet he wouldn't care if SkyEurope - an airline that'll almost certainly be gone within a year - was mentioned rather than Jet2.

JulietNovemberPapa

Hi. My name's Tom, originally from Leeds but now living in the east midlands. Have done for 20 years. As several people on here know. Not that it's of any relevance or any of your business. Chump.

No vested interest in any airline. As I said before, most people don't have favourite airlines (people living in the real world, that is) - and I'm no exception, I'm afraid.

You're dead right though - I wouldn't care if SkyEurope was mentioned by MOL. See the paragraph above this one for an explanation (clue: I don't have an allegiance to any airline - remember?).

MOL is a gobsh*te. That's not a perspective unique to 'fans' of Jet2 or any other airline, or any other person for that matter. Nor is it an opinion that should surprise you or anyone else, given said airline exec's propensity to emit sh*te from his gob. It's a purely logical view to adopt.

Like I said before - I'm Joe Public. Is it so hard to believe that a regular, normal person can dislike people like MOL, or can't your tiny, skewed mind comprehend that the public has an opinion on these things too? Can you only deal in basic deduction, such as this Leeds = Jet2 employee obsession thing you have going on?

Leeds is a big place.

Moron.

[JulietNovemberPapa]

said airline exec's propensity to emit sh*te from his gob


Think we ought to call the health authorities.


I'm Joe Public


Really? I could have sworn you just said your name was Tom.


tiny, skewed mind comprehend that the public has an opinion on these things too?


Yes, MOL is an eloquent, opinionated man, but I think he's all the better for it. And can't your tiny, skewed mind comprehend that the public can think differently from you?

[A320fan]

Quote:
What has that got to do with anything??
Fancy someone from Leeds trying to rebut negative comments about a Leeds-based airline. :rolleyes: :8


Fancy someone from further south saying that .... your little bash has got no credibility at all!! Technically they have only been Leeds based for the last year and i would still have exactly the same opinion of Jet2 if they were based in Australia!! WHO CARES????

Jet2 are not my favourite airline, I dont have favourites and even if I did what would it matter?? All I care about is when when some to$$er called MOL goes around chanting rubbish and saying airlines will go bust.

[harrogate]

JNP - You're not very clever are you?

What's upsetting you? (Apart from me.)

Did Jet2 turn you down?

[A320fan]

Did Jet2 turn you down?

:D:D:D:D lol loving it

JulietNovemberPapa, you seem to talk about Manx2 and Gloucester a lot in your previous posts, is that a bit of favoritism there by any chance?? ;)

[harrogate]

Exactly Ryanair has messed up with their fuel hedging whereas Jet2 have theirs sorted throughout Summer 08, Winter 09/09 and Summer 09! As mentioned earlier so have Globespan so for now these two are here to stay!

A320fan

Careful, chap - an airline managing to hedge its fuel for a couple of years doesn't guarantee its future at all. Plenty of other things can go tits up. Cheaper fuel is great, but not when it's going in planes that are only half full. Marketing spends and network quality/breadth need to be more robust than ever too.

There's also the chance, albeit a slim one at present, that fuel prices could come down, obviously meaning those airlines that didn't hedge their fuel could reap the rewards. Stranger things have happened.

Hedging is a risk, but then choosing not to hedge is also risky. Who'd be in the airline business, eh?

( JNP - *yawn*. I suggest you get a new idol. )

[Artie Fufkin]

Back on topic...

I saw MOL ranting on the BBC news at lunch and they said that FR were "bucking the current trend" by posting a large profit for the last 12 months and predicting flat for next year. They even said "what a contrast to BA"!

Do the BBC have shares in FR? Or is it just their usual "high" standards in journalism?

[greenhorn1]

Once again MOL talking out of his backside again. Jet2 going bust is what he wants to see, not the reality.
Jet2 has hedged it's fuel for this Summer, Winter and next Summer. It also owns all it's a/c (unlike Ryanair), has very profitable Royal mail contracts and has Group business outside airlines.
I seem to remember MOL telling everybody that Flybe were going to go bust in the late 90's.

[orangetree]

I believe Sunfish hit the nail squarely on the head here.
RYR are not hedged and will haemorrhage money in coming months. They are selling seats that they cannot make money on in a race to the bottom of the barrel. O'leary clearly reckons if he bleats enough about his competitors going bust he may actually get lucky and see it happen. Then he can put his fares up to a level where he can profit again. Its hard to believe that RYR are not hedged. Lesser mistakes have brought down much better airlines than his.

[EI-CFC]

Just because MOL said it, it doesn't make it untrue.

There will be casualties in the low-cost airline field over the next year. It's a given. Certainly one of two of the central European based operators will probably fold, and it's not beyond the bounds of possibilities that one of the smaller UK operators will hit hard times.

For those saying "Jet 2 has done such and such... GSM has hedged until whenever.. GSM is only one part of a bigger business" etc it matters not one jot. We've seen bigger, more expansive operators fail before over the years who had all those things and more in place. In the UK, I do think that they are probably the ones in the most precarious position. GSM is unfocussed (is it a LCC, a lessor, a charter airline, a long haul airline?) while Jet2 is just in a much weaker position (route network, fleet etc). I don't know if they will fail, but common sense seems to dictate they are on shakier ground than the big boys like FR, EZY etc

No one can predict the future alas. But I'd urge people to not write off MOL's comments just because you might not like him.

We'll see in 12 months I guess!

[leeds 65]

Why are people surprised by MOLs comments.Some of the exterior paint jobs on fr planes are more hurtful to other airlines/orgs.

MOL is entitled to his opinion and free speech.a little bit of a publicity stunt shouldnt worry the said airlines in question if they were in an ok position,should it?hmmm .Customers who purchased jet2 and globespan tickets shouldnt be worried by MOLs comments should they?hmmm

Bad publicity is good publicity:ok:

MOL talking(mouthing off other carriers) = free publicity

I believe the FR management is strong,ruthless if need be,and make no mistake they will pull out all the stops during this recession period,even if that involves grounding fleets or possibly selling aer lingus shares etc.

Also MOL is brutally honest in his commentary regarding FR themselves.Everybody knows about there lack of hedging etc etc.MOL called a recession and airline downturn last autumn.If only other airline/industry management were as transparent.

The truth hurts ,stop bashing people for there opinions

[harrogate]

Bad publicity is good publicity

That simply isn't true. Not one bit. I wish it were, because it would make my job a lot easier.

As with most things at present, confidence affects the airline industry. Now more then ever. MOL does often make sense when he talks, but his recent comments are not good for the sector as a whole. He's very close to shooting himself in the foot. It's not a case of unwarranted 'opinion bashing' or not liking MOL. It's more a case of applying a bit of common sense. Comments made earlier in this thread about how people sometimes project their own concerns on competitors may not be far off the mark in this case, and from where I'm sitting a few people are starting to get a little bit jittery about airlines and booking holidays. Confidence is low and MOL's comments today haven't done anything to stem the faith haemorrhage. Arguably he's made it worse. People do sit up and listen to MOL, which is something that may not have worked in his favour today.

As for who's stronger than who - it's all relative. With Ryanair's massive size comes bigger debt and a much higher fall if it all goes wrong. With the far more modest size of Jet2 comes a less robust network and a much older fleet. Each have pros, each have cons. But it very likely will not come down to a question of size if things start going wrong. Size don't mean sh*t.

It has to be said that the financial position of Jet2 really shouldn't be looked at purely from a lo-co airline perspective. As keeps being said - but is still important nonetheless - the airline is part of a larger business that is relatively buoyant, and controlled by a few key share holders. But then a large part of the rest of the business is FWCC, which is obviously in an industry that is also being crippled by both rising fuel costs and food costs. The airline's Royal Mail contracts are seemingly dependable, and the holiday business is reportedly doing OK too, so the point here is to not judge Jet2 solely as a lo-co airline. What it lacks as a lo-co might be compensated for in other areas of the business. Then again, it might not be. Who really knows? Not us. What's for certain though is that these people seem to be reasonably competent at running their sh*t - after all, they're a successful company. To date.

Interesting times lie ahead. As I said before, going by what I've been reading and hearing in the meeja and elsewhere about how things might turn out, I'm certainly very reluctant now to buy lo-co airline tickets for the time being. Personally, I'm going to sit it out for a while and watch. I have that luxury, because I'm in no hurry to fly anywhere for the time being. Lucky me.

This $130 a barrel oil won't be hitting the wider airline market for a good few months yet, but when/if it does things will very likely start to go off in a big way and I for one don't fancy losing my ever-decreasing disposable income in the process.

I'm by no means a panic-monger. I'm pretty optimistic that things won't be as bad as what the likes of ITN will have us believe, but just for the time being I'm going to sit in the terminal and watch, rather than sit on the plane.

[airvanman]

MOL just makes me laugh. I think he is really worried more about his own lot.

I for one have no spare dosh like most people. I think it will effect all the low cost airlines with fewer bums on seats as we all tighten our belts. This will be a sh*t time for all who work in the industry, and many airlines will go out of business.

If we have another terrorist hit on aviation (God. I hope not) I dread the implications.

[BYALPHAINDIA]

PM has lashed out at Mr O'Leary, After FR said in a TV interview, Most Airlines inc Jet 2 would not survive if the Oil Price went above 200.

PM's response was, I'm sorry but it won't be Jet 2 who goes under, As we have already bought all the fuel we need for this summer's operations.:D

The comment by MO was unproffesional banter & totally unwaranted.:*

The full story is in the Bradford T&A on the website if anyone wants to read it further.

Regards.;)

[potkettleblack]

You think that is bad. How distasteful is this one:-

http://www.independent.ie/business/irish/funeral-flights-bring-in-best-profits-says-ryanair-boss-1397374.html?r=RSS

[djfingerscrossed]

Nothing should surprise you with him now. Yet another award winning bit of PR

[cheesycol]

http://business.timesonline.co.uk/tol/business/industry_sectors/transport/article4061320.ece

So Mr O'Gob****e hasn't hedged, thus will only breakeven at $130/barrel? Oops. :D

[BOAC]

Ho Hum!
http://www.pprune.org/forums/showthread.php?t=329694

[king surf]

MOL needs a straight jacket.

[sam dilly]

The Company I Work For Has Signed Up With Jet 2 For More Than
£1,000,000 Of Charter Flights In The Next Few Months.
We Have Been Treated Very Fairly By Pm And His Team.the Flights
Already Flown ,have Been On Time , Good Food Included , Jetways
For Our Passengers, Delivered All Bags And Smiling Well Spoken Crew.
I Wont Get Myself Into Trouble By Telling In This Public Domain
What I Think Of Ruinair ,and How They Have Let Us Down On So Many Occassions On Their Cattle Class Operation.:):)
We Are Quite Sure That The Channex Call Sign Will Be Around For Many Years To Come.

[djfingerscrossed]

I regularly fly Jet2 back from Berlin in the summer rather than come home on EZY due to time differences and I have to say I always enjoy the flights. Only thing that is a little disconcerting is the age of the a/c.

[pwalhx]

Thought they had dropped Berlin?

[Musket90]

I suppose he is just stating verbally what is displayed on a number of Ryanair's aircraft "Bye Bye - Baby, Skyeurope, Alitalia, Lufthansa, Easyjet, LoT etc" difference being Jet 2,Flyglobespan, Wizz are not yet displayed on the aircraft titles.

A lot more free publicity I think.

[A320fan]

Jet2 are here for the long run, people can say what they want, free speech and all but its the usual suspects that want the demise of Jet2, and despite what everyone keeps saying Jet2 & the Dart Group are is a fairly strong position and make as has been said, make an absoute fortune from their extensive ad hoc and mainline tour op chartering their aircraft, the lucrative royal mail & cargo flights & the logisics side of the company.

[EGBKFLYER]

Thing is that despite failing to hedge, writing off millions due to Aer Lingus shares falling, grounding aircraft in the winter and being generally disagreeable, MOL still sees FR's share price go up:mad:. How I'd love to see the city/ consumers teach him a lesson...

Viva Jet2.

PS The J2 aircraft are positively NOT old. They are mature and pre-loved.:ok: