Legacy - Will it fail??
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Legacy - Will it fail??
So much nonsense discussed in another thread, with very little mentioned about certain carriers making huge losses - thought it might be an idea to discuss seperately . . .
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LOCO results
Akrap,
Well, I think your post reflects your own lack of confidence in Ryan's loco financial stability rather than any endemic weakness in the flag carriers.
If you're referring to BA's recent loss I think you need to bear in mind they made £920 million profit in the previous financial year and £700m the year before that. They also have a turnover of £10bn which is 5x that of Ryan and remain one of the most powerful and desirable brands in the world, hardly something one could argue is the case for the celtic fledgling.
BA have also made a point of shedding quite a lot of staff in the past 2 years and are a much leaner, meaner and fitter beast than they were which is why they are so often undercutting the locos on price nowadays.
I believe it was Mr O'Leary who said he'd quit when he'd stuffed BA, Well I suspect he of small genitals but large ego will be in a plywood box long before then.
I trust the accountants and analysts were delighted with Ryan that having given guidance as recently as February that their profits would be in the £44m to £71m range Ryanair announces £90m loss - Business News, Business - The Independent they now hear this morning that the loss is in fact 169million for the year.
In short it seems Ryan lost a third as much as BA but on a fifth of the turnover and without the £2bn cash reserves. Not really looking too good is it Michael? Still don't worry old boy, you can always sell a couple of racehorses... Altrnatively and much more in character maybe you could just find another way to exploit your employees and customers.
Here's to another rotten year for a thoroughly rotten individual,
Desk-pilot
Well, I think your post reflects your own lack of confidence in Ryan's loco financial stability rather than any endemic weakness in the flag carriers.
If you're referring to BA's recent loss I think you need to bear in mind they made £920 million profit in the previous financial year and £700m the year before that. They also have a turnover of £10bn which is 5x that of Ryan and remain one of the most powerful and desirable brands in the world, hardly something one could argue is the case for the celtic fledgling.
BA have also made a point of shedding quite a lot of staff in the past 2 years and are a much leaner, meaner and fitter beast than they were which is why they are so often undercutting the locos on price nowadays.
I believe it was Mr O'Leary who said he'd quit when he'd stuffed BA, Well I suspect he of small genitals but large ego will be in a plywood box long before then.
I trust the accountants and analysts were delighted with Ryan that having given guidance as recently as February that their profits would be in the £44m to £71m range Ryanair announces £90m loss - Business News, Business - The Independent they now hear this morning that the loss is in fact 169million for the year.
In short it seems Ryan lost a third as much as BA but on a fifth of the turnover and without the £2bn cash reserves. Not really looking too good is it Michael? Still don't worry old boy, you can always sell a couple of racehorses... Altrnatively and much more in character maybe you could just find another way to exploit your employees and customers.
Here's to another rotten year for a thoroughly rotten individual,
Desk-pilot
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Well, I think your post reflects your own lack of confidence in Ryan's loco financial stability rather than any endemic weakness in the flag carriers
Just wanted to get a debate going on 'the other end' of the scale regarding long term survival, which you've started off quite nicely so I thank you for that.
I REALLY SHOULDN'T BE HERE
Desk-pilot,
To be fair to Ryanair (and trust me, I'm not a fan) they did make an operating profit. The reason they made a loss is because of their investments. If you exclude their Aer Lingus write down alone (£220m) then they were profitable, even with their poor fuel hedging. I think next year will see strong profitability which, to be perfectly honest, is unlikely to be the case with BA.
I'm not convinced of the value of the distinction between Legacy and LoCo any more. The differences are increasingly cosmetic and I am certain that some airlines which are identified as belonging to either group will fail and some will continue to trade. The problems faced by each are similar. The options are similarly limited. All airlines are trying to cut operating costs, that is a given. After that the options are to improve yield by cutting capacity, gaining market share and/or increasing ticket prices and ancillary charges. There is also the possibility of merging and acquiring to achieve some of the above.
Ultimately there is only so much airlines can do in the face of weakened product demand but I believe it is facile to state that one business "model" or another is failed.
To be fair to Ryanair (and trust me, I'm not a fan) they did make an operating profit. The reason they made a loss is because of their investments. If you exclude their Aer Lingus write down alone (£220m) then they were profitable, even with their poor fuel hedging. I think next year will see strong profitability which, to be perfectly honest, is unlikely to be the case with BA.
I'm not convinced of the value of the distinction between Legacy and LoCo any more. The differences are increasingly cosmetic and I am certain that some airlines which are identified as belonging to either group will fail and some will continue to trade. The problems faced by each are similar. The options are similarly limited. All airlines are trying to cut operating costs, that is a given. After that the options are to improve yield by cutting capacity, gaining market share and/or increasing ticket prices and ancillary charges. There is also the possibility of merging and acquiring to achieve some of the above.
Ultimately there is only so much airlines can do in the face of weakened product demand but I believe it is facile to state that one business "model" or another is failed.
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Ah the delights of accountants!
Virgin trumpeted their 'profit' to city which seemed miraculous until the city dissected them and discovered that the figures that were released were somewhat open to interpretation and that the airline actually made a loss.
Now we have O'Leary trumpeting HIS lo-cost model as being hugely successful and making huge profits but the company lost money? Oh I know, lets keep the rhetoric and blame the fiscal loss on a write down of assets not associated with Ryan-Air. That's it, we can load the loss squarely on Air Lingus. Also let's keep quiet about the horrendous mistakes we made on fuel hedging. O'Learys business model is totally dependant on continued expansion. If he doesn't play up his model to the investing world then he is in trouble.
Not all that is fudged by the pencil pushers is as first meets the eye.
Remember, there are lies, damn lies and then statistics. I think financial reports follow squarely on after statistics.
As to Legacy failing? I don't think the Lo Cost model is conducive to Long Haul travel otherwise O'Leary would be doing it. There is a separate market strategy emerging here and I think there is place for both models in the future. Lets face it it would be akin to Fiat stating that there was no place on the road any more for Ferrari as it's cars do the same job but cheaper. However, there will always be alot of people who want a Ferrari and not a Fiat.
Virgin trumpeted their 'profit' to city which seemed miraculous until the city dissected them and discovered that the figures that were released were somewhat open to interpretation and that the airline actually made a loss.
Now we have O'Leary trumpeting HIS lo-cost model as being hugely successful and making huge profits but the company lost money? Oh I know, lets keep the rhetoric and blame the fiscal loss on a write down of assets not associated with Ryan-Air. That's it, we can load the loss squarely on Air Lingus. Also let's keep quiet about the horrendous mistakes we made on fuel hedging. O'Learys business model is totally dependant on continued expansion. If he doesn't play up his model to the investing world then he is in trouble.
Not all that is fudged by the pencil pushers is as first meets the eye.
Remember, there are lies, damn lies and then statistics. I think financial reports follow squarely on after statistics.
As to Legacy failing? I don't think the Lo Cost model is conducive to Long Haul travel otherwise O'Leary would be doing it. There is a separate market strategy emerging here and I think there is place for both models in the future. Lets face it it would be akin to Fiat stating that there was no place on the road any more for Ferrari as it's cars do the same job but cheaper. However, there will always be alot of people who want a Ferrari and not a Fiat.
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wobble2plank
"As to Legacy failing? I don't think the Lo Cost model is conducive to Long Haul travel otherwise O'Leary would be doing it."
Is there not at least one Asian carrier claiming to be doing very well out of a long-haul operation from the UK?
Is there not at least one Asian carrier claiming to be doing very well out of a long-haul operation from the UK?
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There is indeed but this model has been tried before, Kingfisher started a Lo-Co Long Haul and whilst the initial interest was high the yield was low and the interest tailed off over time leading to the airline closing down.
I guess it depends on how the business model is applied with respect to destinations, crew costs, turnarounds and customer support.
Personally, I would never want to risk travelling Long Haul on a low cost carrier!
I guess it depends on how the business model is applied with respect to destinations, crew costs, turnarounds and customer support.
Personally, I would never want to risk travelling Long Haul on a low cost carrier!
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Legacy won't "fail" as such....as wobble points out there are far too many people out there who will just refuse to ever use loco's, regardless.
What I think may happen, however, is a serious re-think of the underlying business model and strategy....BA for example using the premium end of the market as much of their cash cow are suffering badly, also with the generally poor service offered in comparison to alternatives. It will survive easily, but I doubt it will be recognisable as the same beast as it is now.
What I think may happen, however, is a serious re-think of the underlying business model and strategy....BA for example using the premium end of the market as much of their cash cow are suffering badly, also with the generally poor service offered in comparison to alternatives. It will survive easily, but I doubt it will be recognisable as the same beast as it is now.