The futures bright!
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The futures bright!
well today the first ever low cost airline flew into ncl and flew out again with a full load! is it a sign of things to come with direct destinations into europe. i hope so considering the amount of qualified unemployed crew in the region.
i also hear on the grapevine that BE are thinking of LCY and an all year round JER service from ncl? great to see a regional airport doing so well, in so hard times!
airtours 2 based a/c for next summer also 320 and 757?
i also hear on the grapevine that BE are thinking of LCY and an all year round JER service from ncl? great to see a regional airport doing so well, in so hard times!
airtours 2 based a/c for next summer also 320 and 757?
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It's all really rather logical when you think about it - and the amazing thing is that the majority of airlines still haven't grasped the concept.
If you charge people less, more people will fly with you.
Freddie Laker called it the "Forgotten Man theory".
I've spent the last couple of days trying to educate the management of an airport that if they stop trying to rip off their customers - the airlines - on landing and handling fees, then they in turn will be able to reduce their fares and as a result the airport will get considerably more pax going through it and paying for car parking, McMuffins, cafe-frappes and what have you.
Equally, a carrier such as Go, Ryanair or easyJet will find that if they offer tickets at £10 on a route where the previous fare had been over ten times that then, not too surprisingly, they will fly full.
Yet the 'full service' carriers persist in ripping off their passengers - charging hundreds of pounds more and for what? An all day deli bag? I'd rather save the money and have a candle-lit dinner with my girlfriend at the finest restaurant in town - and I'd still be saving money!!
If you charge people less, more people will fly with you.
Freddie Laker called it the "Forgotten Man theory".
I've spent the last couple of days trying to educate the management of an airport that if they stop trying to rip off their customers - the airlines - on landing and handling fees, then they in turn will be able to reduce their fares and as a result the airport will get considerably more pax going through it and paying for car parking, McMuffins, cafe-frappes and what have you.
Equally, a carrier such as Go, Ryanair or easyJet will find that if they offer tickets at £10 on a route where the previous fare had been over ten times that then, not too surprisingly, they will fly full.
Yet the 'full service' carriers persist in ripping off their passengers - charging hundreds of pounds more and for what? An all day deli bag? I'd rather save the money and have a candle-lit dinner with my girlfriend at the finest restaurant in town - and I'd still be saving money!!
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Guv
Filling flights isn't the issue, any idiot can fill a flight, the trick is to fill the seats profitably, so if you're offering seats at GBP10 each but it costs you GBP20 per seat to operate the flight you won't stay in business very long.
Filling flights isn't the issue, any idiot can fill a flight, the trick is to fill the seats profitably, so if you're offering seats at GBP10 each but it costs you GBP20 per seat to operate the flight you won't stay in business very long.
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Pash - those introductory fares are part of the marketing tools at an airline's disposal (but which tend to be used by too few).
Let's look at two airlines, we'll call them A and B. A starts up a standard fares, full frills service, and does the usual advertising. "Fly with us from Geordieland to London for just £299 return!" trumpet the billboards and radio ads.
Airline A's initial flights are very lacklustre, with loadfactors averaging 10 - 20%. The pax are not wildly impressed, but hey, they're getting their Air Miles and the company's paying for it so who cares?
Airline B starts up its low fare operation, charging £10 from Geordieland to London. "Go with us for £10 each way!" the billboards trumpet.
Airline B's flights are 100% chokka. More importantly, word has got out about the company's services, so everyone has brand awareness. Even after fares are increased to more realistic levels, loads remain very high and Airline B adds extra frequencies. This attracts the pax who were flying Airline A who cease operating the route and claim that services between Geordieland and London are not economically viable.
Get the picture?
Let's look at two airlines, we'll call them A and B. A starts up a standard fares, full frills service, and does the usual advertising. "Fly with us from Geordieland to London for just £299 return!" trumpet the billboards and radio ads.
Well, wow, whoopee. If I have to fly urgently to London, I'll remember them. Possibly. Maybe. Unless I remember GNER first. Who I've used before and aren't too bad and OK, they take longer than flying but it's straight into Central London and ... what prompted this line of thought in the first place?
Airline B starts up its low fare operation, charging £10 from Geordieland to London. "Go with us for £10 each way!" the billboards trumpet.
Eeee, I must get online and book me ticket as soon as I get to a computer! Sheite, if I give me mates a call, we can all go down to London and see the match and have a brilliant time and it's a lot cheaper than that bloody GNER! Plus we all have to go and see the missus' family and they're all southern softies, so I'll book tickets for that as well at the same time...
Get the picture?
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Hey Guv,
I think GO's recent reduction in service in Scotland proves that low-fares alone ensure success.
Need to look at both sides of the equation - boost revenues (through either yield management or increased frequencies) and cut costs (reduce unit costs via economies of scale - and other means).
I don't think a 4 million Pound profit in 3 years is anything special - in fact, I think that amount is anemic in a volatile business like the airline business - not much of a cash cushion during bad times...
Easy wins because it has successfully built both an effective operating cost structure and an unbelievable brand name - its reputation precedes it... I am sure NCL residents knew precisely what to expect before Easy's first flight. I predict Easy will do VERY well there.
Cheers
I think GO's recent reduction in service in Scotland proves that low-fares alone ensure success.
Need to look at both sides of the equation - boost revenues (through either yield management or increased frequencies) and cut costs (reduce unit costs via economies of scale - and other means).
I don't think a 4 million Pound profit in 3 years is anything special - in fact, I think that amount is anemic in a volatile business like the airline business - not much of a cash cushion during bad times...
Easy wins because it has successfully built both an effective operating cost structure and an unbelievable brand name - its reputation precedes it... I am sure NCL residents knew precisely what to expect before Easy's first flight. I predict Easy will do VERY well there.
Cheers
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Thanks Guv for providing us with that penetrating insight into the 'Loot' or 'Exchange & Mart' theory of airline economics. What fools we have all been! The shadows fall from our eyes as we reach out to grasp the morsels of wisdom emanating from your sticky keyboard...
By your logic, everyone wants to shop at Aldi, eat out at the local chippy and drive a Lada. Let's all wear cheap shellsuits and we'll all share the beach at Magaluf on our hols.
Had it not ocurred to you that some customers prefer a regular, reliable service from an company whose operation does not fall apart at the first sign of rime ice?
By your logic, everyone wants to shop at Aldi, eat out at the local chippy and drive a Lada. Let's all wear cheap shellsuits and we'll all share the beach at Magaluf on our hols.
Had it not ocurred to you that some customers prefer a regular, reliable service from an company whose operation does not fall apart at the first sign of rime ice?
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Lavdumper - I think I'd prefer Go's £4m profit (and Ryanair's and easyJet's very much larger ones) to United's US$1.16 billion loss! 
Incidentally, I think you'll find that it was indeed Go - and not EZY - that toontartcart was referring to.
overstress - whilst some might prefer the full service airlines, they tend to flock to the cheap'n'cheerful crowd when economics dictate it. Like it or not, the only airlines that are making money right now are the regionals and the low fare carriers - everyone else is haemmoraging red ink.
So, whenever you travel, you always only pay full F, J or Y fares do you? If not, you're depending on others to subsidise you - which explains why those carriers aren't doing too well!
Incidentally, I think you'll find that it was indeed Go - and not EZY - that toontartcart was referring to.
overstress - whilst some might prefer the full service airlines, they tend to flock to the cheap'n'cheerful crowd when economics dictate it. Like it or not, the only airlines that are making money right now are the regionals and the low fare carriers - everyone else is haemmoraging red ink.
So, whenever you travel, you always only pay full F, J or Y fares do you? If not, you're depending on others to subsidise you - which explains why those carriers aren't doing too well!
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Good to see things went successfully today, and I hear the bookings are doing well. Lets hope that GO may bring additional destinations in the future to a market which has been in need of it for some time.
(We had it at one point with DEBONAIR - a route which failed to work due to bad timings, hardly any advertising, and loads of about 15 pax).
WELCOME, AND GOOD LUCK GO!
cheers,
starship
[ 01 November 2001: Message edited by: starship ]
(We had it at one point with DEBONAIR - a route which failed to work due to bad timings, hardly any advertising, and loads of about 15 pax).
WELCOME, AND GOOD LUCK GO!
cheers,
starship
[ 01 November 2001: Message edited by: starship ]
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Debonair was the first low cost airline to operate out of Newcastle with flights to London Luton. These only lasted a few months, as there wasn’t the demand. Go will always fill aircraft if they sell seats at next to nothing but when they start charging a more realistic price will they still keep their passengers?
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The majority of the average passengers don't give a stuff whether they get a full 3 course meal and free drinks with their air ticket. What they care about is how convenient is it for them and how cheap. The average short haul flight is only around 2 hours. Most people can get by without drinking themselves into a stupor for this period with free booze provided by a full-price ticket. The downside is the airports the reduced fare carriers use. They are often not the convenient ones near the centre of the cities to which they are trying to travel to. But hey, the local cost of travel at destination is probably still cheaper than the difference between full-fare and cheap-fare. So who is the dummy here? Making £1 per seat is better than an empty aircraft. Good on GO and easyJet
LAVDUMPER,
0 - 18 aeroplanes , 0 - 800+ staff , over 15 destinations . Business plan called for break even at best , so 4 mill ain't bad when you consider that GO was playing catch up to Easy & Ryan and the tough market that they joined . Just a few facts to enlightnen.
0 - 18 aeroplanes , 0 - 800+ staff , over 15 destinations . Business plan called for break even at best , so 4 mill ain't bad when you consider that GO was playing catch up to Easy & Ryan and the tough market that they joined . Just a few facts to enlightnen.
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LTN man - Debonair hardly had any advertising, just didn't turn up some of the time, when they did were late and flew to an Airport which at the time did not have the best links to central London.
GO - Must have spent 100's thousands on adverts (half page in national and full page in local rags, just for the NCL route!), are flying a route already made successful by GIL and are flying to an airport with good links to London & rest low cost Europe.
Hope its the first of many for NCL.
P.S. they were also on time for both flights first day.
GO - Must have spent 100's thousands on adverts (half page in national and full page in local rags, just for the NCL route!), are flying a route already made successful by GIL and are flying to an airport with good links to London & rest low cost Europe.
Hope its the first of many for NCL.
P.S. they were also on time for both flights first day.
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1) I can attest to Go's advertising at NCL itself - big billboards as you drive in, plus in the sides of all the bus shelters.
2) Having just operated in and out of NCL from Gatters (BA full frill) we had very good loads. Just remember that STN is a very different catchment area to LHR and LGW...
2) Having just operated in and out of NCL from Gatters (BA full frill) we had very good loads. Just remember that STN is a very different catchment area to LHR and LGW...
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GUVNOR
If you take your last paragraph to its logical conclusion,you should take your girlfriend to McDonalds and save even more money.This will eventually close the expensive candle lit restaurants,but using your criteria this should make for a better world,albeit with an awful lot less choice.
If you take your last paragraph to its logical conclusion,you should take your girlfriend to McDonalds and save even more money.This will eventually close the expensive candle lit restaurants,but using your criteria this should make for a better world,albeit with an awful lot less choice.
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I wish Go well from Newcastle. Despite the 'noddy guide to airline economics' given above, the problem with newcastle lies on many levels. Not least of these is the good fast rail service from central Newcastle to Central London in around three hours (one train every hour). So ,although initially, their may be takers for ultra cheap fares, whether the demand can be sustained is another matter. Newcastle railway station is EXTREMELY well connected to the North East and suburbs of Newcastle (via the Metro)(unlike most of UK railways). I am no fan of railways, but the service between Newcastle and London is very very good.
But I'm sure Go have already thought this through. Good luck to them. Newcastle to other European countries would be a different matter altogether.
Just a final point, I agree with an earlier posting above, that not everyone will want to travel with budget airlines. It is a different market sector, which overlaps with some 'premium travellers' and railways. I repeat once more, the price difference is not due to food or drinks (an urban myth), and budget airlines are not always cheaper - check all prices before booking, and you will be astonished.
But I'm sure Go have already thought this through. Good luck to them. Newcastle to other European countries would be a different matter altogether.
Just a final point, I agree with an earlier posting above, that not everyone will want to travel with budget airlines. It is a different market sector, which overlaps with some 'premium travellers' and railways. I repeat once more, the price difference is not due to food or drinks (an urban myth), and budget airlines are not always cheaper - check all prices before booking, and you will be astonished.
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Sorry to dampen the barbie - but people do not book on a full fare airline because of the sarnies/free drinks. My buddies in the worlds of finance and trade always book full fare on business and pleasure - not because of a free deli bag or air miles or because the company is paying but because if the flight goes tech, or is delayed,or you miss your flight, or it is full the company will do their utmost to get you home - booking on another carrier or a later flight. Cheapo carriers will not do this, and that is a risk thats fine for a student seeing his girlfriend on a weekend, but not a knackered businessman who wants to get home.
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All very true, but we're talking airline economics here not passenger convenience. The fact is that - to generalise somewhat - the low fare carriers are making profits and the full service airlines are losing it by the tonne.
Doesn't this say something to you?
Doesn't this say something to you?
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You're being a little simplistic here Guv (deliberate?), as you are suggesting that the low cost carrier will always wipe the floor with the full fare one. It's not necessarily true. The promotional fares will certainly get Go noticed and will have the usual effect of growing the market.
The schedule is all important to the key business pax and Go's is OK southbound, but not northbound (where the bigger market is) at the present time. The existing carrier can respond by discounting the off peak flights and keeping the peak flights for the business pax, who are the key to the success or otherwise of the route.
Sadly, we're talking about BA here who will do the usual thing of a) not reacting at all and getting stuffed and b) panicking and opening the key flights so that the business pax will also be able to buy the cheapest fares.
It's their usual response and the reason why they always get thumped. But it doesn't have to be like this if only they would learn.
The reason why they always lose out is not because it's inevitable but because they are commercially inept at shorthaul.
The schedule is all important to the key business pax and Go's is OK southbound, but not northbound (where the bigger market is) at the present time. The existing carrier can respond by discounting the off peak flights and keeping the peak flights for the business pax, who are the key to the success or otherwise of the route.
Sadly, we're talking about BA here who will do the usual thing of a) not reacting at all and getting stuffed and b) panicking and opening the key flights so that the business pax will also be able to buy the cheapest fares.
It's their usual response and the reason why they always get thumped. But it doesn't have to be like this if only they would learn.
The reason why they always lose out is not because it's inevitable but because they are commercially inept at shorthaul.