Long Haul Low cost out of Stansted true or False?

[wannabe-aviator]

Hi folks

Sorry if this is the wrong place to put this, was at the local the other day which isn't far from a certain airport and speaking to a couple of pilots they tell me of a new long haul low cost operation is to commence from Stansted second quarter..

Digging at them for more info I get the impression its either Norwegian changing Gatwick to Stansted for cost reduction but digging further it could actually be a current airline or something completely new...

Anyone working in or is in the know at Stansted put any kudos to these pilot's rumours or is Ryanair finally going Long Haul potentially???

[On the beach]

Possibly AirAsia X:

Cheap flights to Europe set to return as AirAsia X buys $6.7 billion in long-range Airbus jets (http://www.smh.com.au/travel/travel-news/cheap-flights-to-europe-set-to-return-as-airasia-x-buys-67-billion-in-longrange-airbus-jets-20131220-2zp35.html)

[wannabe-aviator]

OTB

That would actually make sense, I hand not bargained or thought of Air Asia X what so ever when it reality it should have been in my mind... its only because the pilots in question were adamant it was a European company but perhaps that was to throw me off from thinking Asian or Middle Eastern, who ever they are good luck to them...

[Narrow Runway]

If a couple of pilots were talking about this in a pub, it is certain to happen.

Nailed on. You can take it to the bank.

[vctenderness]

As yet nobody has made a success of Low cost Longhaul!

From Freddie Laker to 'all business' Silverjet they have failed. The cost of operating suitable equipment is one factor in its failure.

[crewmeal]

The cost of operating suitable equipment is one factor in its failure.

So what would be suitable equipment in this day and age for low cost longhaul? There is a market for it but under the right conditions, ie departure airport, slots, destinations and of course aircraft.

The only carrier that seems to be working so far is Scoot which caters for the high density Asian market. If they were to spread their wings to Europe would they be able to make a profit? Time will tell.

[The SSK]

As yet nobody has made a success of Low cost Longhaul!

Loftleidir?

[wannabe-aviator]

Narrow Runway

Its a bit unfair to shoot the messenger as they say, however to be fair to the pilots in question they are well experienced and one of them is a TRI on the A330/A340 which would make the theory of OTB valid as AAX is a user of both models.

I also agree with regards to what the others have said regarding the right destinations and aircraft choice personally 2 engines would always be better than 4 engines unless we are talking a 480 seat 747-400 but even that is almost out of fashion with tens of them being parked around the world burning an average of 9t an hour when they do fly, I will be meeting the guys again down the pub this weekend so will press for more information, but everything these guys have told me including Norwegian out of Gatwick has been proved right I don't see them being wrong on this one..

[Capetonian]

Loftleidir was an excellent airline but as a criterion for success, they ceased operation in the early 80's as an airline although I think they still exist as a lessor of a/c to Icelandair.

Laker? Well, he was the victim of a conspiracy who wanted to force him out of business, so nobody knows if the business model was sustainable. Long haul low cost does seem to be dead in the water for a number of reasons.

[crewmeal]

I will be meeting the guys again down the pub this weekend so will press for more information

Don't forget to calculate everything on the beermats :D

[Agaricus bisporus]

I know it's not a direct comparison but I reckon long haul cattle class has been low cost for a long time. How much do you pay for a loco London to Glasgow - 1 hour? £50 is cheap. What do you pay London to New York - 7 hrs? £300 is about right - if you're lucky. Pretty much the same per hour. Just haow much can you cut off that>

I'm not sure that "no frills" - ie Ryanair style buy-everything-as an-extra is what people want long haul. You need food and drink and you certainly don't want to be bombarded by the sell sell sell that goes with ultra loco.

I'd have thought Silverjet had the right idea. Reasonable cost business class, but they were too small (too few unreliable old airframes) and probably at the wrong airport (STN).

[Capetonian]

The problem with Silverjet, Eos, and Maxjet was that they operated from GB airports which didn't have the credibility or connections to attract the type of clientele they needed in sufficient numbers to give the yields they needed.

[dc9-32]

I thought Silverjet was LTN based

[wannabe-aviator]

Crewmeal

Your sarcasm is very refreshing, however I am in the thinking anything that involves job creation in the industry is a welcome addition be it legacy or loco, short haul or long haul, I have no personal vested interest in this news, if you have something against crews and professionals meeting down the local for a bit of banter and information exchanges that is your problem not mines or anyone else's.

[Capetonian]

I thought Silverjet was LTN based I think it was, my point still stands as valid.

[The SSK]

Laker's business model was not sustainable and his airline was going rapidly down the tubes. McDonnell Douglas and General Electric put together a rescue package and the 'conspiracy', which was real enough, consisted of a number of flag carriers (led by BCal) warning them off.

Buying a fleet of A300s to operate a network of fifth and seventh freedom European services for which he didn't stand a chance of getting the route approvals wasn't exactly the brightest of moves.

The man had an ego the size of Bolivia, although having witnessed his performance in CAA hearings, he was certainly entertaining.

[Narrow Runway]

Just because someone is a TRI does not mean they have the first idea about commercial plans for an airline or operator.

Being a TRI is NOT a big deal.

Carry on being a wannabe.

[wannabe-aviator]

Since the slinging match has started in earnest I will go ahead with my name WA and you carry on with your Narrow mind I mean runway...

Sir if you have no interest in engaging in a meaningful and polite conversation and discussion on the subject matter no one is putting a gun to your Narrow mind to do so, as you can see others have pitched in with their ideas and suggestions regarding the matter of long haul low cost you on the other hand have contributed nothing except for showing us all how frustrated you seem to be.

This is a Rumour network where people from various ideas, religions, background, professions and so on meet up on the virtual airways to discuss rumours as well as other subject matters related to our industry, sir if you have no desire to engage in a professional and polite manor I urge you not to come back.

As for my screen name, it has nothing to do with my level or competency within the industry, its mere cheekiness at wanting to emulate the one of the greatest aviators that lived Howard Hughes but you wouldn't know anything about banter.

If these pilots tell me there is a Long Haul loco at Stansted to be launching soon, again based on the track record of information of this particular TRI I am inclined to believe it...

[LAX_LHR]

If Air Asia are making a European return, could explain why I personally saw a delegation of their managers at a hotel in Manchester. A MAG deal perhaps?

[davidjohnson6]

If Air Asia X are to return to Europe, could someone explain what's changed commercially compared to when they left ?

[wannabe-aviator]

I think the student market and tourism market from Asia to Europe is more open now thus resulting in more demand from relatives wanting to visit students here in Europe, also could be to do with Tony Fernandes having some information we don't have, and lastly and potentially most importantly Airport incentives to operate into and out of their respective airports these could be some of the reasons??

[Groundloop]

Laker's business model was not sustainable and his airline was going rapidly down the tubes. McDonnell Douglas and General Electric put together a rescue package and the 'conspiracy', which was real enough, consisted of a number of flag carriers (led by BCal) warning them off.

The "rescue package" included McDonnell Douglas become a shareholder in Laker. The "warning-off" was other McDonnel Douglas customers telling McD that it would be very difficult to buy any more aircraft from them as this would involve discussing confidential information with a shareholder in a rival airline.

The Laker story will always be coloured by the myth that he was a good businessman. Obviously he was not! As well as buying a fleet of A300s for routes without licences (as mentioned by SSK) his original DC-10 order was for Skytrain - which then took about five years to get approval from the US. For those five years he was desperately trying to find work for his aircraft!

Regarding Lofleidir - they were successful as they were not members of IATA which at that time was a price-fixing cartel. Once price-fixing by IATA was banned Loftleidir lost a lot of their commercial advantage.

[southside bobby]

Also davidjohnson6,it was proven the A340 equipment used on their first foray into Europe became progressively uneconomic & perhaps unsuitable even to begin with.The latest version of the A330 ordered changes the math....

[whitelighter]

I though NAX had just signed a big partnership deal with Gatwick. Can't see them upping sticks to Stansted.

Aur Blue has been a rumour for ages - they are certainly long haul and low cost.

[LAX_LHR]

Air Blue are pulling off long haul. MAN stopped, A340's sent back.

[Need to Know Basis]

GBP has increased in value over the USD ?

[Need to Know Basis]

NAX & LGW signed an agreement but only to do with marketing and promoting each other....... a non money agreement but that promotes each other.....making them both money......but NOT off each other.

[Phileas Fogg]

The Laker story will always be coloured by the myth that he was a good businessman. Obviously he was not! As well as buying a fleet of A300s for routes without licences

Actually ... For the UK to get in on the "building Airbus" project there needed to be a British customer of the Airbus product, namely the A300.

Maggie went to her state owned airline, they told her to bogger off so then she went to the 2nd flag carrier, BCal, they told her to bogger off so then she went to FAL to enquire if he would entertain ordering 10 of the Airbus product, FAL questioned of Maggie "Would you look favourably upon my 600 European Skytrain route applications?" to which Maggie replied "Of course I will darling" and the rest is history.

And as for Maggie having a word in the shell like of Ronald to stop the US Grand Jury case that would have closed down Maggie's "World's Favourite" airline, at the precise time when she was trying to privatise it, well she was at the forefront of closing Laker down.

R.I.P. Maggie :)

[The SSK]

Ain't history wonderful! So much more interesting than the here and now.

Groundloop: Once price-fixing by IATA was banned Loftleidir lost a lot of their commercial advantage.

I don’t think that’s the interpretation I would put on it. The arrival of the 747 in 1970/71 triggered huge capacity increases on a route-by-route basis as 150-seat 707s, DC-8s and VC10s were replaced by aircraft more than twice their size. All those extra seats had to be filled somehow. Meanwhile markets, particularly Europe-US, were liberalising.

Ridiculous loopholes like Affinity Charters (Join the Batley Rhubarb-Growers’ Association and fly to New York for £99 !) and One-Stop ITs had little credibility, what the airlines wanted was pricing freedom outside the IATA first/economy/excursion straightjacket. So along came APEX and mass-market longhaul travel was born.

IATA only fixed prices inasmuch as bilateral Air Service Agreements made it hard/impossible to offer fares outside the IATA framework. When more liberal bilaterals came along (such as Bermuda II), airlines were much more free to set their own fares. It wouldn’t surprise me if IATA are still setting F/Y/YE fares in those markets where they are legally allowed to do so, but these fares are pretty irrelevant in this day and age, except for calculating the prorates on interline journeys.

[anothertyke]

History is interesting because it sends messages yet never quite repeats itself. So, if Maxjet and Silverjet failed partly because they were in the wrong place and if it's true that the decent margins are at the pointy end and if R3 at LHR gets built, could the long haul business jet concept work? Or will the alliances inbuilt advantages --frequent flier points, networks, frequency, back up--still win out?

[The SSK]

Just about every transatlantic startup - loco or all-business - failed (largely) because of the consequences of small-scale operation and its vulnerability to aircraft unserviceability and accumulating delay. Maxjet and Silverjet spent a fortune leasing in replacement capacity while Eos took a different route and provided itself with standby aircraft - again at huge cost.

The simple fact is that a single aircraft can do a transatlantic roundtrip in a 24-hour period, but schedule it six or seven days a week and something will go wrong, trashing your reputation. That's what happened to People Express (remember them?)

The standout exception was Virgin, who got through their first Summer with a single 747 operating six rotations a week. It was secondhand, too, supplied to them in perfect condition by Lufthansa, IIRC.

By their second Summer their fleet had expanded and they were up and running.

[Airlift21]

So what's this about NAX leaving Gatwick for Stansted? Any substance to this rumour?

[On the beach]

AirAsiaX has 475 A320's, 51 A330's and 10 A350XWB's either on order or flying. Possibly, quite a few XAX's heading for EGSS from various Asian countries. I don't suppose they would be linking in to the, as yet unannounced, RyanairX transatlantic network would they?

http://http://www.airbus.com/newsevents/news-events-single/detail/airasia-x-orders-25-more-a330-300s/ (http://www.airbus.com/newsevents/news-events-single/detail/airasia-x-orders-25-more-a330-300s/)

http://http://www.bloomberg.com/news/2013-12-16/airasia-x-plans-to-sign-major-airbus-plane-order-this-week.html (http://www.bloomberg.com/news/2013-12-16/airasia-x-plans-to-sign-major-airbus-plane-order-this-week.html). :ok:


Of course there's no link between Ryanair and AirAsia. Or is there?

Airbus Says Low-Cost Airlines Will Keep Its A330 in Production for at Least Ten Years - Skift (http://skift.com/2013/09/24/airbus-says-a330-to-survive-a-decade-on-long-haul-discount-sales/)

So, 40 - 50 a/c required for a low-cost transatlantic operation. Presumably linking to a 40 - 50 a/c low-cost Asian operation. Mmm, I think a second runway may be going to be needed somewhere, pretty soon. But that's for another rumour! :E

[crewmeal]

The simple fact is that a single aircraft can do a transatlantic roundtrip in a 24-hour period, but schedule it six or seven days a week and something will go wrong, trashing your reputation. That's what happened to People Express (remember them?)

And Highland Express who leased in a knackered old 747-100 which spent more time tech than it did in the air. (You can still buy their model aircraft on ebay for around a tenner!)

By what's been said so far it seems that lowcost is down to reliability and performance. It seems just one hiccup will send your reputation to the dogs. So what's the answer to such an operation? A one horse outfit doesn't work. Stby a/c are too expensive. An example that works after the demise of Eos, Silverjet and Maxjet, even though it's J class only is BA's operation out of LCY with 2 reliable A318's. They plan ahead and cut back to 1 service where necessary and the spare aircraft goes in for maintenance. Open Skies seems to be working after faltering at the start with old 757s.

[Phileas Fogg]

So what's the answer to such an operation? A one horse outfit doesn't work. Stby a/c are too expensive.

I always recall a conversation I had with Andy Janes (of Emerald notoriety) one evening and Andy explaining to me that his fleet of budgies had pretty much hit zero value so there was no hull depreciation to take in to account, the aircraft were paid for so there were no mortgages to pay and, pretty much, besides any parking fees, insurances and in-house maintenance costs any standby aircraft cost was, pretty much, bogger all.

So perhaps the answer is to operate an aircraft type that has become surplus, many years ago the MD80/90's became surplus, thus cheap, and a number of operators took advantage of that, likewise the Fokker jets became surplus and cheap and a number of operators took advantage of that also, I've read on this forum, to the effect, that one can't give A340's away, I don't know the going rate for the B757/B767 family now that the B787 has become all the rave, etc.

As for reliability, in one of my previous lives I worked for a geriatric DC8-62 cargo operator in Europe, hydraulic pumps were the favourites to fail, firstly they were buying the cheapest and nastiest reconditioned hydraulic pumps from Florida that, by the time one arrived in Europe, a 24 hour delay had already been incurred but it was common knowledge that if one hydraulic pump failed then the other three pumps had been allowed to run dry and they too would fail soon afterwards but would that operator ever buy more than one pump at a time ... no!

So, perhaps the answer is to operate a surplus aircraft type and, whatever the type, have a good spares back-up.

[LTNman]

As yet nobody has made a success of Low cost Longhaul!

Also nobody has made a success of flying any sort of long haul from Stansted.

[sxflyer]

Fairly inevitable someone from the LTN mob would turn up to troll.

The same could also be applied to LTN, unless the poster thinks successful long-haul is a weekly Monarch to Orlando that doesn't run anymore. Well, guess what, STN had that route too flown by Leisure for a few seasons.

Depends on definition of success of course, but Air Transat operated for maybe 15+ consecutive seasons to Toronto. Havana I believe is also long haul, that lasted a few years until Cubana got themselves into LGW. Unfortunately, as a 'waiting room' for other airports comings and goings such as a season to Vancouver with Thomas Cook because they were unable to secure suitable slots again at LGW are inevitable. Of course in the 1970s/80s the likes of Wardair seemed to do pretty well.

Air Asia coming back would be interesting. Again to conflict with LTNman's assertion it's not as though they were quickly in and out failing spectacularly last time so if they are coming back to Europe soon it can't be ruled out. As for what's changed since last time, well the economy is picking up, the aircraft look more suitable and perhaps more significantly the airport has new owners potentially able to give fresh incentives.

If you want unsubstantiated rumours, Air Canada Rouge is another long haul 'loco' with existing relationship with MAG, though not sure what their appetite would be to compete with themselves at LHR. Also looking at Canada, Westjet were said to be eyeing up a few UK airports.

[wannabe-aviator]

Met the TRI who told me this rumour yesterday and what he said was AOC already secured, first aircraft already secured, will commence flying in July with a second and third Unit joining in August and September.

Press release by both Airline and airport is due first or second week of February and tickets will go on sale in March, first aircraft is an Airbus, Arab and Asian money involved.

[crewmeal]

Looks like something like this:

Leak of the week: flynas looks to launch long-haul operations in 2014 (http://www.anna.aero/2014/01/15/leak-week-flynas-looks-launch-long-haul-operations-2014/)

[Capetonian]

If it's a Saudi based operation it will probably be 'dry'. I would imagine that will place it at a huge disadvantage, with everything that follows from that.

[DADDY-OH!]

Capetonian

I take your point. There was a UK start-up in the late 1980's called Paramount Airways operating (iirc) MD83's on Non-Smoking flights from Belfast & Glasgow!!! Great business plan!!

Can Lo-Cost Long Haul work? Yes it can.Back in the mid-late 1980's I used to 'commute' LGW-MIA with a certain 'New Kid On The Block' that operated 2 old Classic B747's that offered £99 London-Miami, $99 Miami-London.

Shrewd move, Sir Richard, shrewd move.

[Phileas Fogg]

Shrewd move, Sir Richard, shrewd move.

http://www.virgin.com/sites/default/files/legacy/Richard_Branson_and_Freddie_Laker-17612-530x330.jpg

[boeing_eng]

Air Asia fares just prior to dropping the London route after they moved to LGW were very close to the likes of Emirates and Ethiad on the same route (albeit with a stop involved)

It they are serious about returning, it'll be interesting to see how they try to compete with the Middle Eastern carriers.

[PAXboy]

If you find a carrier who - after using low prices to open a route - keeps the prices low into the future: Make a note and tell the world, because they are going to be unique.

I am not cynical or angry about this, it's just my observation of the world I see.

I sit to be corrected.

[wannabe-aviator]

PAXBoy

Surely Southwest, Ryanair and Easyjet answer your question regarding starting low cost and carrying on with such model, I grant you they are on a regional level rather than transcontinental level as attempted by Oasis Hong Kong, and Air Asia X..

Do correct me if am wrong on the above as I always don't mind being corrected its the only way an old fart like me can still learn without going to University, unless O Levels rather than A levels are still respected in this industry :(

Many safe landings
WA:ok:

[anothertyke]

wannabe

Usual story is --- there's a world price of jetfuel.For short haul, fuel is 40% of total cost so if Loco cost per passenger km of everything other than fuel like planes, staff, airport fees is 50% of full service carriers cost per pass km, that gives you a 30% margin to work with relative to the competition. That's enough of a window to get in and stay in the market. So SW, RYR and Easy made it work for them.

Long haul, fuel is 70% of total cost, time zones and speeds mean it's difficult to improve on plane productivity, no equivalent to four rotations/day effect, so margin to full service unlikely to be more than 10%. That may not be enough given the perceived advantages of the incumbents.

Will be fascinating to see if Norwegian, Air Asia etc can make it work for them. Obviously if fares are £1000, even 10 per cent is appreciable if its your own money. That's in their favour relative to the regional market.

[Capetonian]

Surely Southwest, Ryanair and Easyjet answer your question regarding starting low cost and carrying on with such model, I grant you they are on a regional level rather than transcontinental level as attempted by Oasis Hong Kong, and Air Asia X..
You more or less answered your own question. The economics and logistics of operating longhaul, particularly across time zones, are far more complex than short haul. For a start, apart from what is already pointed out above, the s/h aircraft and crews generally return to base at night, whereas the l/h can't so they need to have slip crews at the point of turnaround, with all attendant costs and risks entailed.
I'm with the cynics on this, although I'd like to be proved wrong, not that I would use a LCC for longhaul, but plenty of people would be happy to do so.

[Gulfstreamaviator]

Excellent service, and great price.


Luton was a great base for their service.


And still could be.


Long Haul LCC are starting from LON to Philippines.


Air Asia stand a good chance too.


Bring Back OASIS while you are at it.


Glf

[GROUNDHOG]

DADDY OH - Of course Paramount was a charter airline and not scheduled, yes it was a great business plan, which parts did you enjoy most? I hope you liked the parts I wrote, I have a copy if you wish to refresh your view of the details.

Arguably Paramount may still have been around today had the then Chairman not run off with all the money!

[LNIDA]

Norwegian will not up sticks and move to STN or anywhere else, the company are very very pleased with their LGW operation which has exceeded all expectations at this stage and I'm told long haul is selling really well.

It is too early to say that they have made long haul work, but despite all the dreamliner problems and the negative press associated with it, it seems to be doing very well, the 2013 financials are out in a few weeks so we will see.

The question is when does short haul become long haul from a passengers point of view? Norwegian already operate some of the longest 738 sectors in the world (OSL/DBX & TOS/LPA) to name a few, with block times of 7 hours, yes they are limited to around 155-160 seats, but the 737MAX will likely see that increase to full or 8 - 9 hours and if you fly long haul in Y class then whats the difference ?

Loading catering for a full flight and giving the food away/then throwing 20% in the bin is wasteful

If Norwegian prove the concept, then many will follow, there is for now a world of difference between a FR LoCo flight and a NAS one, thats one of the reason they've been successful at LGW amidst the sea of Orange.

[CabinCrewe]

I dont recall Paramount operating at startup from GLA. They may have done a few flights but that was it. IIRC they were base mainly in the south maybe LGW, CWL and BRS

[GROUNDHOG]

I can tell you exactly how Paramount started, there was a demand based largely Owners Abroad charter programme from Bristol and Cardiff and the hole was going to be filled by a proposed new Cardiff based charter airline. To fill in the programme some flights were being operated ex SEN as well with a proposed Boeing 737-300 but it all went wrong for a number of reasons. John Faraday and his team stepped in to pick up the pieces and the name Paramount was chosen at dinner in a pub in Haywards Heath, the main consolidator and commercial arm at the start was Viking International who also owned the Unijet Group (later bought by First Choice)... sorry OP for the thread drift!

Why not Long Haul low cost from Stansted, you wont get me on a low cost long haul with 30" seat pitch but I am sure many will be willing and it isn't that the catchment area is lacking?.

[Rwy in Sight]

People express? They were among the first and they started from a SH operation. Why did they fail?

Rwy in Sight

[PAXboy]

wannabe-aviator Yes, I was referring to long haul low cost, due to the thread title, despite the thread drift!

For example, I recall the full service carrier Virgin Atlantic opening service to South Africa and all the words about fares coming down. In the early days - but they soon found what BA and SAA knew, that the JNB + CPT run is a cash cow. I am a fan of VS and they must charge what the market will bear. and the way that FR makes it's money is well known and EZ (naturally) push fares up as much as they can. We all know that fares are too low and the entire airline world is on thin ice - I include airports and manufacturers in that. (A sweeping statement I know, but the cost of air travel is very low)

LNIDAThe question is when does short haul become long haul from a passengers point of view?Good question!
For me, the figures are: 4~6 hours = Medium, over 6 = Long and that is 'wheels to wheels' which is essentially LON~NYC etc. However, there are many factors to consider before selecting a carrier:


Actual time in the seat (inc boarding, taxi time etc.)
Time zones crossed
Time of day for the sector
Holiday/work
If holiday, is it going to be a restful one so you don't mind being a little cramped, or active and you need to be 'good to go'.

My choice of hours is based on my most frequent sector being LHR to JNB/CPT which is 10.5/11.75 (wheels to wheels) and so I am used to long haul, in all classes.

[Fairdealfrank]

Until a few years ago, the so-called "legacy" carriers were offering some very cheap fares "down the back" on trunk routes outside the peak periods, e.g from LHR on the likes of BA, VS or equivelants: JFK £200, YYZ £280, CPT £500, HKG £300, etc.. This must have had on an impact on longhaul "no-frills" operators as these were without extras.

Regretably, those days appear to be over, so the longhaul "no-frills" operators may stand a better chance this time around.

[Groundloop]

People express? They were among the first and they started from a SH operation. Why did they fail?

Because in their quest for continual expansion they started competing directly on the New York - Dallas route with American. Previously the US majors had generally ignored PE as they were competing more with Greyhound buses. However once they stepped on American's feet in its home turf American decided to kill of PE by continually undercutting PE's fares. American could afford to lose money for a few months, PE could not as there margins were so slim.

[rutankrd]

Until a few years ago, the so-called "legacy" carriers were offering some very cheap fares "down the back" on trunk routes outside the peak periods, e.g from LHR on the likes of BA, VS or equivelants: JFK £200, YYZ £280, CPT £500, HKG £300, etc.. This must have had on an impact on longhaul "no-frills" operators as these were without extras.

Regretibly, those days appear to be over, so the long haul "no-frills" operators may stand a better chance this time around

Faredeal-

I think we can guarantee any budding Long Haul Flexible Fares (Wrongly called LCC - thats a business model not a price/ticketing system) carrier would find the competing legacies dumping their excess economy seats at pretty competitive rates rather swiftly - to ensure those new guys go out of business - One thing those legacies all have (even through they book losses) is huge cash reserves and can wait out 18 months before the market corrects to support their normal practises !

Heres the thing by similar logic those very legacies already have to dump quite a few of those Economy seats at pretty competitive rates where over capacity already exists - Notably LHR-JFK !

[Skipness One Echo]

where over capacity already exists - Notably LHR-JFK !
Good point but it does have plus points. The airlines manage to fill the seats at the front and make a lot of money leaving a very good deal for normal people not on expenses down the back.

What killed People Express was having no revenue management system. American came to market with lead in low fares as well as their usual high margin fares. PeopleExpress could only compete on the fares so were selling more and more lowest fares where American were selling only the lowest fares they needed to whilst matching PeopleExpress on entry level pricing. The lack of complexity at the loco meant they didn't actually know when they could sell at a higher margin and get away with it. This is why revenue management is crucial.

There's a fine line between niche and over-reach, like Air Florida, ValueJet, PeopleExpress etc

[rutankrd]

Good point but it does have plus points. The airlines manage to fill the seats at the front and make a lot of money leaving a very good deal for normal people not on expenses down the back.

Morning Skip -True it has such benefits however we get to the greater market distortion position again.

What BA/AA probably need if they want to play the frequency and premium game (With the required last minute flexible flight change requirements) are a fleet of very very premium heavy 788s with perhaps under hundred at the back of the bus specifically for this route !
Lets see 7 flights a day plus one spare - 8 would suffice.:ok:

It clear BA have been trying to manage the excess Y capacity some on those high J models - Just 177 economy seats on some of those 744s !

[rutankrd]

What killed People Express was having no revenue management system. American came to market with lead in low fares as well as their usual high margin fares. PeopleExpress could only compete on the fares so were selling more and more lowest fares where American were selling only the lowest fares they needed to whilst matching PeopleExpress on entry level pricing. The lack of complexity at the loco meant they didn't actually know when they could sell at a higher margin and get away with it. This is why revenue management is crucial.

Thats the crux of the matter and why the likes of Easy/Ryan/South West are successful and profitable isn't it and pretty much why the term LCC is so misleading.

Those algorithms and matrices employed mean that they achieve maximum revenue most of the time and also mean some customers may pay more than on a legacy !

[Skipness One Echo]

Lets see 7 flights a day plus one spare - 8 would suffice
You're arguing they cut volumes and increase prices for hard working families going on holiday. If we're going to suffer the concrete jungle that is the necessary evil of an airport I'd rather like the trickle-down effect to work just this once. :) #muchcheapnesscattleclass
The key disagreement we have I think is the market has decided as the flights are very profitable and affordable for plebs like wot I is. (not joking) :)

[rutankrd]

The key disagreement we have I think is the market has decided as the flights are very profitable and affordable for plebs like wot I is. (not joking)

Thought the ethnic cleansing of docklands had been completed and all the plebs sent to Basildon !

I believe we are probably both from rather working class backgrounds somewhere north of Watford gap !

I suppose Pinner and Canary Wharf are rather different to Wythenshawe and parts of Glasgow.

[Fairdealfrank]

Faredeal-

I think we can guarantee any budding Long Haul Flexible Fares (Wrongly called LCC - thats a business model not a price/ticketing system) carrier would find the competing legacies dumping their excess economy seats at pretty competitive rates rather swiftly - to ensure those new guys go out of business - One thing those legacies all have (even through they book losses) is huge cash reserves and can wait out 18 months before the market corrects to support their normal practises !

Heres the thing by similar logic those very legacies already have to dump quite a few of those Economy seats at pretty competitive rates where over capacity already exists - Notably LHR-JFK !



Wasn't arguing the rights and wrongs of it, or the economics of it, just offering a reason why longhaul "no-frills" has not worked before. These low fares did not have extras attached so were better value than longhaul "no-frills" fares.

Maybe it might work now that these very cheap fares are no longer available on the "legacies".

[The SSK]

Rwy in Sight, Groundloop

People Express had a daily 747 ex Brussels (was it their only European destination? I don't remember)

At least it was supposed to be daily. Regular 12-hour delays became 24-hour delays became cancellations. They had the most dreadful reputation for unreliability.

[Groundloop]

PE also served Gatwick with a 747.

[TOWTEAMBASE]

Any more news on this supposed new airline to STN ?

[Fairdealfrank]

Faredeal-

I think we can guarantee any budding Long Haul Flexible Fares (Wrongly called LCC - thats a business model not a price/ticketing system) carrier would find the competing legacies dumping their excess economy seats at pretty competitive rates rather swiftly - to ensure those new guys go out of business - One thing those legacies all have (even through they book losses) is huge cash reserves and can wait out 18 months before the market corrects to support their normal practises !

Heres the thing by similar logic those very legacies already have to dump quite a few of those Economy seats at pretty competitive rates where over capacity already exists - Notably LHR-JFK !



Indeed, this what killed off Laker's £59 LGW-JFK one-way fare. AI, BA, PA and TW were the 4 carriers doing LHR-JFK at the time, and all based in LHR-3. They offered LHR-JFK "standby" fares at £64. This included food and drink, no "extras", plus the benefit of LHR departures.

Critically, the frequency offered (several flights/day accross the 4 carriers) provided multiple opportunities to get on board as opposed to Laker's one/day.

It's one way to fill empty seats, but these days the seats are cheaper the earlier one buys, the last minute "standby" concept is long gone.

Bear in mind that legacies will always have two advantages over LCC on long haul: F and J customers at the front and cargo in the hold.

[anothertyke]

New entrant needs a 20% cost advantage to have a good chance of survival. Have they got that?

I wonder compared with 1980 if the big boys are quite as dominant as they were. You can lose a lot of money quickly playing competitive games if you don't get a quick win.

[Fairdealfrank]

New entrant needs a 20% cost advantage to have a good chance of survival. Have they got that?

I wonder compared with 1980 if the big boys are quite as dominant as they were. You can lose a lot of money quickly playing competitive games if you don't get a quick win.


Yes, that may well be the difference between then and now, although for the "legacies", F and J pax and cargo are still good earners.

The "legacies" were offering some very low fares down the back just a few years ago, but not any more.