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View Full Version : Will the Charter Market be hit badly?


Obi Wan Kirk
6th Oct 2001, 13:12
In the past few weeks we have seen many airlines like Virgin, BA, Alitalia, KLM, lay off pilots due to the Sep 11 events.

I've been asking everyone I know if they are still planning to go on holiday and it seems everything is quite normal. Instead of going to the US, Egypt, Tel Aviv people seem to be heading off to Greek islands, Canary islands,etc.

I am wondering if Charter airlines like Volare, Excel, Blue Panorama, JMC, Air 2000, LTU, Hapag-Lloyd, that operate medium haul aircraft such as A320s, B737s and B757s will be affected like the major carriers?

My guess is no and that the market will pick-up, am I being too optimistic?

Flapskew
6th Oct 2001, 15:24
Charter market is being hit as are most of the carriers. 1,100 jobs to go at Air 2000, accross the board. Need cash flow in order to survive. Pax bookings provide the cash, but bookings are down. Believe things will improve eventually, hopefully by the new year. Difficult times ahead for all of us in the industry.

BoeingBoy
6th Oct 2001, 15:34
All will depend on consumer confidence being established with due consideration to the level of hostilities in Afghanistan. If we see covert/low levels of war then the global economy will stabilise and people will start to believe it's safe to book next years two weeks in the sun, if more terrorist attacks occur and the bean counters go into even greater heights of knee jerking then we will be looking at a giant downsizing of the UK holiday industry.

At the moment we have full planes only because the people currently flying booked their holiday pre-September and would face losing all their money of they cancelled. The Brits are long used to the levels of security that are now only appearing Stateside, and have lived with 'terrorism' for over thirty years courtesy of the Northern Irish problem. It would take a lot to stop them travelling.

euroboy
6th Oct 2001, 15:37
Thomas Cook have announced 500 redundancies today, due to customers cancelling holidays or not booking.
Most people are travelling at the moment with holidays booked a while back.

I think people will go on holidays to the Med-mainly Spain and Portugal, Canaries.
The long haul charter market will down turn.
Most customers are only cancelling holidays to Egypt, Middle East destinations.
Thomas Cook was slight different to other Travel Agents in the UK, in the fact they employed Admin. staff to deal with the "backroom" work such as filling, dealing with paperwork from the tour ops. This work will be done by the Sale Consultants as with the other Travel Agents.

B772
6th Oct 2001, 16:40
How have operators such as British World reacted to the new environment.

CrashDive
6th Oct 2001, 19:17
Touch wood (finger on head), and perhaps god only knows why (actually, mostly because we've an excellent team at the top) we seem to be doing reasonably well at BWA, i.e. very little impact (and no, that's not a pun), all helped by the fact that our business is, fortunately, quite diversified..... unlike poor old Flightline (who live in the offices beneath ours) who had something like seven of their fleet of eight 146's on contract with Swiss Air.

Now I won’t tempt fate by talking of our very upbeat plans for next year, but let's just say 'Watch this space' !

SOPS
6th Oct 2001, 22:36
Just like to add that up to now, KLM has not layed off pilots ( I think)

northern boy
6th Oct 2001, 22:51
Everyone is hoping that this nonsense will be a horrible memory by next summer. The situation is not helped by the media jumping on every aviation story and twisting it to make a sensational story. The Air 2000 TCAS incident being a favorite. My local news channel interviewed some of the pax who were led into swearing blind that they would be too terrified to fly again. (Click here for a link to the aforementioned TCAS story: Air 2000 forced to make emergency descent (http://www.pprune.org/cgibin/ultimatebb.cgi?ubb=get_topic&f=1&t=015993))

Once the US alliance do whatever it is they are going to do in terms of building improvements in Kabul and providing no more aircraft are hijacked by loony suicide merchants, then the great travelling public will decide they still need their two weeks down the med. Most of the charter outfits recognise this and any layoffs seem to be both temporaray and minimal. Its the long haul sector that is badly hit and even that will recover eventually. Then maybe I'll get my job back.

Nb. Edited by Crashy only to put in the above link.

[ 06 October 2001: Message edited by: CrashDive ]

Warwick Hunt
7th Oct 2001, 00:24
A very critical time for the industry who have managed to confuse the public big time over the last 2 years by swamping travel agents with holidays and their respective brochures up to 2 years ahead.

The fact that the glosseys are released so far ahead means that for folk who have booked already for next summer, all they will lose should they cancel is their small deposit.

The industry has traditionally seen the post-xmas period as the key time to book people on their summer holidays. Should there be unfavourable world circumstance leading up to this date, war, redundancy or uncertainty, then this will hit the charter sector massively. There has been a massive re-organisation already in recent history and the industry will fear the coming months with trepidation.

The plus point about all this is the desire of folk to holiday more than once a year. I guess that if Europe and its hot spots are considered safe then folk will holiday.

The downturn in this industry and the job cuts could possibly be caused by the infiltration of the low-cost carriers into their home territory, so a consolidation by the charters has been on the cards for a while, but lots of people want to be sheparded into their destination so there should be room for both.

Beaver
7th Oct 2001, 17:22
Flapskew :-

Just a small point but worth mentioning :- First Choice Holidays has announced that it is to cut 1,100 jobs, half in UK. As Air 2000 is but one component of that Group it will have to bear a proportion of those 550 UK based redundancies, as will all the other parts of the company. Let's keep things in perspective here!!

A and C
7th Oct 2001, 22:48
If you think that a few terorists will come between the english and a week in the sun forget it !,in my view this is an atempt by the holiday companys to create a holiday shortage next year to harden prices and create better profit margins using the gulf war.....err i mean the terror err....economic crisis as an excuse.

To day the boss of GE was interveiwed on the TV and in his opinion the economy in the US will be on the up by the second or third quarter of 2002......crisis ? the only crisis is the one that the press is talking us into.

Obi Wan Kirk
8th Oct 2001, 11:45
I reckon the Gulf war crisis and this one are quite different.

In the Gulf war the problem was that Kuwait's oil had been seized by Iraq and this effected oil prices. Today the US and UK forces are attacking the Taliban, who do not own oil. I reckon this military campaign will be over very soon and the terrorists work slowed down, if not stopped.

So, people book your holidays in the sun!

flugpants
8th Oct 2001, 15:15
Unfortunately, things are not quite that simple! Many of the UK airlines send a number of aircraft to the States and Canada for Wet Leases in the Winter months. Due to the town-turn in domestic and overseas travel, these aircraft will not be departing for Atlantic shores this Winter.

The UK Winter Sun programmes do not nearly fill the number of aircraft that are sitting around - and indeed the demise of the Cruise Market has already hit a number of airlines. Put on top of this the cancellation of many red-sea diving and winter sun tour programmes, and you may be getting the picture......its bleak!

One look on teletext will let you know what sort of state the last month of the Summer holiday season is in. 1 week 5 star in Cyprus inc flights - full board £89! 1 Week 5 star Greek Isles £69! Its a mess!

The only way to keep things ticking over this winter is to hope that the Conference and Incentive markets liven up a bit, and to hope that the teams that we have in the UEFA and Champions League can carry on through the stages, and hopr that the ad-hocs can plug some of the gaps!

We must keep confident that we can be creative enough both on the marketing end and the financial end to push through this downturn! :(

PAXboy
8th Oct 2001, 16:22
A & C, you say that the media are talking us into a recession.

Interestingly, others find the opposite! A friend of mine who is a relentlessly optimistic person, commented that the media are talking up the economy and that it was striking a false note with how people are experiencing the economy every day.

HiSpeedTape
9th Oct 2001, 03:08
There's not a day that goes by just lately (since 11SEP) that one or two nervous pax ask to be offloaded at the gate. Five of them the evening it kicked off in Afghanistan. If this is consumer confidence then someone is'nt telling the punters. I'm sure though that the majority of Joe Public will be unable to cope without their £99.00 fortnight down in Torremolinos next year.

MEVERTSGB
9th Oct 2001, 03:40
If our latest sales figures are anything to go by, then I guess Ďad hocí charter airlines will be the clear winners for now. In times like these, customers have only one way of knowing for sure who they are travelling with, and that is for them to charter their own Ďad hocí aircraft, whether it is a small Seneca or a somewhat bigger 747. ;)

Obi Wan Kirk
9th Oct 2001, 13:31
Charterguy you have hit the nail on the head, charter flights are definetely alot safer than scheduled flights. I don't think a terrorist would go about buying himself a package holiday to tenerife with Air 2000...

Eff Oh
9th Oct 2001, 14:22
Well said. Now all we have to do is convince the public of that!! If they are worried about terrorists, they would be safer in Tenerife etc!! Not what you would call a target is it?

Eff Oh