Easyjet 38.5% Improvement on Nov 2000
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Easyjet 38.5% Improvement on Nov 2000
Low cost carrier Easyjet has reported another surge in passenger numbers, hinting at continuing success by budget airlines in growing their market share.
Easyjet carried 690,928 passengers last month, up 38.5% on traffic in November last year.
The data showed an acceleration in passenger growth, with expansion in October running at an annual rate of 33%.
While Easyjet's passenger number last month was actually lower than that in October, the dip was attributed by observers to seasonal factors.
Last year the fall was more pronounced.
The much-watched "load factor" figure, which indicates how many seats are being filled, hit 85.2% last month, from 82.2% in October.
Growing presence
The figures will be seen by analysts as a continuing indication of the growing presence by budget carriers in the aviation sector.
While major airlines have seen passenger numbers plummet since 11 September strikes, budget carriers slashed fares to attract passengers back onto planes.
Traffic on British Airways flights fell last month for the 10th consecutive month, if showing some improvement on October's data, figures on Wednesday revealed.
Budget airlines are also, being based around shorthaul traffic, less exposed to transatlantic trade, which has suffered in particular since the attacks.
Easyjet shares on Thursday closed at an all-time high of 488.5p.
Easyjet carried 690,928 passengers last month, up 38.5% on traffic in November last year.
The data showed an acceleration in passenger growth, with expansion in October running at an annual rate of 33%.
While Easyjet's passenger number last month was actually lower than that in October, the dip was attributed by observers to seasonal factors.
Last year the fall was more pronounced.
The much-watched "load factor" figure, which indicates how many seats are being filled, hit 85.2% last month, from 82.2% in October.
Growing presence
The figures will be seen by analysts as a continuing indication of the growing presence by budget carriers in the aviation sector.
While major airlines have seen passenger numbers plummet since 11 September strikes, budget carriers slashed fares to attract passengers back onto planes.
Traffic on British Airways flights fell last month for the 10th consecutive month, if showing some improvement on October's data, figures on Wednesday revealed.
Budget airlines are also, being based around shorthaul traffic, less exposed to transatlantic trade, which has suffered in particular since the attacks.
Easyjet shares on Thursday closed at an all-time high of 488.5p.
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Well now, airlines think themselves doing well when they return a profit of £10 million on a turnover of £600 million.
If your average LF is 85%, how much do you need to charge per seat to make money? Well, let's assume an operating cost of about £3000 per B737 per hour, and 135 seats. You need about £26 per occupied seat to cover costs.
Whilst the normal starting point for low-cost carriers may be £29, the end point when flights get full is significantly higher. Somebody has mentioned £90 one way to EDI; somebody else has mentioned a price range of £99 to £250 return to ALC.
Low cost airlines have no compunction about charging significantly more than normal scheduled airlines when demand gets high. Although marketing was too low-key to make any difference, the bmi strategy of saying "you will charge no more than £95 return" was very canny.
Incidentally, if anybody can give me more accurate figures on operating costs etc I would be interested, as I'd like to model it properly.
If your average LF is 85%, how much do you need to charge per seat to make money? Well, let's assume an operating cost of about £3000 per B737 per hour, and 135 seats. You need about £26 per occupied seat to cover costs.
Whilst the normal starting point for low-cost carriers may be £29, the end point when flights get full is significantly higher. Somebody has mentioned £90 one way to EDI; somebody else has mentioned a price range of £99 to £250 return to ALC.
Low cost airlines have no compunction about charging significantly more than normal scheduled airlines when demand gets high. Although marketing was too low-key to make any difference, the bmi strategy of saying "you will charge no more than £95 return" was very canny.
Incidentally, if anybody can give me more accurate figures on operating costs etc I would be interested, as I'd like to model it properly.
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No doubt about it - the only commercially viable business plan in the short/medium haul market at present is the low fare, no frills operation.
I suspect that BA's board are seriously kicking themselves over selling off Go - they could have franchised all their short haul routes to them! - and I note that even bmi and British European are trying to realign themselves as 'low cost' (but interestingly not 'low fare') carriers.
I suspect that BA's board are seriously kicking themselves over selling off Go - they could have franchised all their short haul routes to them! - and I note that even bmi and British European are trying to realign themselves as 'low cost' (but interestingly not 'low fare') carriers.
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Exile from Groggs:
You should be able to get some figures from the CAA's annual UK Airlines publication - it's downloadable from their ERG web-site.
http://www.caaerg.co.uk/
When easyJet was floated, they admitted in their prospectus that they didn't always over the lowest fare but "value for money" fares. They also pointed out that the highest fare offered on routes from LTN to AMS and NCE was 7 times the lowest fare. The question is what is the average fare paid per flight - at a guess around £80-£90? At such levels I am sure they are making a nice profit.
The Guvnor makes a good point too - all airlines should wish to be at least Lower Cost in terms of how much it costs them to provide an airline service, they do not all necessarily need or want to be low fare - as bmi quickly stated when the media thought they were going to be the next easyJet/Ryanair.
As for BA and go, they may be regretting the sale, but at the end of the day they are a network carrier and they stand or fall on that basis, flying 737s on a short-haul point-point basis is very different and the 2 didn't always sit comfortably together.
It is interesting to compare go's load factor announced yesterday with easy's. go is around 75% (booked), 70% (with no-shows). They are either getting a higher yield or they are not making as much per flight as easyJet - or is someone going to tell me that their costs are lower?
[ 07 December 2001: Message edited by: brabazon ]
You should be able to get some figures from the CAA's annual UK Airlines publication - it's downloadable from their ERG web-site.
http://www.caaerg.co.uk/
When easyJet was floated, they admitted in their prospectus that they didn't always over the lowest fare but "value for money" fares. They also pointed out that the highest fare offered on routes from LTN to AMS and NCE was 7 times the lowest fare. The question is what is the average fare paid per flight - at a guess around £80-£90? At such levels I am sure they are making a nice profit.
The Guvnor makes a good point too - all airlines should wish to be at least Lower Cost in terms of how much it costs them to provide an airline service, they do not all necessarily need or want to be low fare - as bmi quickly stated when the media thought they were going to be the next easyJet/Ryanair.
As for BA and go, they may be regretting the sale, but at the end of the day they are a network carrier and they stand or fall on that basis, flying 737s on a short-haul point-point basis is very different and the 2 didn't always sit comfortably together.
It is interesting to compare go's load factor announced yesterday with easy's. go is around 75% (booked), 70% (with no-shows). They are either getting a higher yield or they are not making as much per flight as easyJet - or is someone going to tell me that their costs are lower?
[ 07 December 2001: Message edited by: brabazon ]
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it seems strange that BMI and BE need to announce that they are turning "low cost", surely every business should constantly assess there cost base and trim the excess where possible, it shouldnt need a day like sep 11th to change the market conditions to make companies see sense like this.
as for yields etc, post sep 11th, undoubtedly the yield has dropped quite considerably, but at the same time the load factor has actually risen, therefore the airlines are getting the same revenue per flight in total, but spread between more people. this means that the profit margain per flight remains constant. in addition to this, with the fuel price dropping by 15 percent, and suppliers willing to drop costs to help a struggling industry, i am pretty sure that this has left EJ, GO and FR in an even better position.
i believe, and this is my oppinion and not fact, that EJ, FR and GO will all turn in a profit this FY, not quite sure about Buzz though, they dont seem to be marketing their product quite as aggresively. ( excuse spelling).
anyway, have a great day...
as for yields etc, post sep 11th, undoubtedly the yield has dropped quite considerably, but at the same time the load factor has actually risen, therefore the airlines are getting the same revenue per flight in total, but spread between more people. this means that the profit margain per flight remains constant. in addition to this, with the fuel price dropping by 15 percent, and suppliers willing to drop costs to help a struggling industry, i am pretty sure that this has left EJ, GO and FR in an even better position.
i believe, and this is my oppinion and not fact, that EJ, FR and GO will all turn in a profit this FY, not quite sure about Buzz though, they dont seem to be marketing their product quite as aggresively. ( excuse spelling).
anyway, have a great day...
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The best sort of advertising is free and the continued use of the title "low cost" implies low fares and is, surely, invaluable to the likes of easy. The fact is, of course, that the low costs are the airlines and not necessarily the passengers. This is not a criticism of no frills operators but is only to point out the advantage of perception given to them by this use of the english language.I am sure that they will go from strength to strength, but to label them low cost gives a misleading impression in my opinion.
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no doubt the figures are there somewhere, but all under the KLM Uk umbrella, which obviously comes under the global KLM figures. I wouldnt like to start trying to find them. for specific routes, obviously the caa website can help. but network figures is a different matter. perhaps someone like The Guvnor would know where to root out these figures.
i said my previous comment about their profitability because most of the people i have spoken to said they have been on half empty flights, the check in area at STN always looks half empty no matter what time of day. some might bounce back saying that the buzz yield is loads higher.. i doubt it from looking at some of the fares they offer. also, i doubt there operation as a whole has real " low costs" in the EJ or FR sense of the words.
if anyone can get traffic figures and current performance for Buzz, not the whole KLM uk operation I would be interested to see them.
i said my previous comment about their profitability because most of the people i have spoken to said they have been on half empty flights, the check in area at STN always looks half empty no matter what time of day. some might bounce back saying that the buzz yield is loads higher.. i doubt it from looking at some of the fares they offer. also, i doubt there operation as a whole has real " low costs" in the EJ or FR sense of the words.
if anyone can get traffic figures and current performance for Buzz, not the whole KLM uk operation I would be interested to see them.
