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Old June 28th, 2004, 05:36 PM   #201
hkskyline
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AirAsia's customer base is 4 million, but the year over year change from 0 to 4 million is still less than the year over year change in passengers for both Ryanair and Easyjet.

From their website, AirAsia operates 427 flights a week, which is an average of 61 a day. They have 17 airplanes, so on average, each will fly 3.6 one-way flights a day, which makes sense logically. Multiplying 427 by 148 passengers per aircraft over a year, their capacity is about 3.3 million passengers a year, assuming the aircraft number / capacity homogenity doesn't change.
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Old June 28th, 2004, 06:01 PM   #202
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Quote:
Originally Posted by hkskyline
AirAsia's customer base is 4 million, but the year over year change from 0 to 4 million is still less than the year over year change in passengers for both Ryanair and Easyjet.
That's why I picked you up on that "European budget carriers struggling" article - budget airlines are exploding in Europe! The budget model has huge potential in Europe because the sector has only been recently been deregulated, prices are still high, and there are lots of loss making state funded dinosaurs suddenly exposed to genuine competition. Some national flag carriers have already gone bankrupt or been taken over and many more will foolw. For example Alitalia made a loss of €519.8m last year!! Indeed Alitalia has made a loss in 11 out of the last 12 years. Swissair and Sabena have already gone bankrupt and KLM has been taken over. Aer Lingus is in a comparable crisis to Alitalia. These dinosaurs have no chance against the likes of Ryanair.

Last edited by Monkey; June 28th, 2004 at 06:11 PM.
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Old June 28th, 2004, 06:22 PM   #203
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Hmm...just for a more fair basis for comparisons, how quickly did Ryanair and EasyJet during their infant years?
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Old June 28th, 2004, 06:24 PM   #204
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While budget carriers are exploding in Europe, there have been casualties. Not every budget carrier has been successful. Didn't an Irish LCC just went belly up? There are also financial pressures on these airlines to sustain low prices and to compete ferociously with one another.

Budget carriers target short-haul routes where the planes can turn around very quickly. When it comes to transcontinental or transatlantic routes, which are important revenue-earners in a full-service airline's diversified route network - the traditional airlines will still rule the day - with their premium service and premium price.
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Old June 28th, 2004, 06:36 PM   #205
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Quote:
Originally Posted by huaiwei
Hmm...just for a more fair basis for comparisons, how quickly did Ryanair and EasyJet during their infant years?
Ryanair have actually been around for a long time. They almost went bankrupt until Michael O'Leary took over and decided to relaunch the airline as a budget carrier along the lines of Herb Kelleher's Southwest. EasyJet is a more recent start up. I got these figures for you:

EasyJet passenger growth:




To May 2004 EasyJet's current rolling annual total stands at 22,388,318 - just behind Ryanair.

Last edited by Monkey; June 28th, 2004 at 07:06 PM.
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Old June 28th, 2004, 06:51 PM   #206
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Quote:
Originally Posted by hkskyline
While budget carriers are exploding in Europe, there have been casualties. Not every budget carrier has been successful. Didn't an Irish LCC just went belly up? There are also financial pressures on these airlines to sustain low prices and to compete ferociously with one another.
Yes it went bankrupt almost immediately. There are loads of new budget carriers opening all the time and most are little more than couple of 737s with a funky logo and direct booking website. Some don't even offer low fares! Many of these will soon go out of business or be swallowed up by larger rivals. Michael O'Leary (Ryanair chairman) forecasts a bloodbath next year with dozens of European airlines, whether low cost start-ups or dinosaur flag carriers, going under. The major beneficiaries from that will be the larger and better managed low cost airlines such as Ryanair, EasyJet, Air Berlin and German Wings.
Quote:
Originally Posted by hkskyline
Budget carriers target short-haul routes where the planes can turn around very quickly. When it comes to transcontinental or transatlantic routes, which are important revenue-earners in a full-service airline's diversified route network - the traditional airlines will still rule the day - with their premium service and premium price.
Yes true - hwever short haul traffic is growing faster than long haul. British Airways is one of the few profitable and successful full service airlines in Europe yet even BA makes a loss from its European operations and is gradually retreating from the Europe market in the face of low cost competition. Meanwhile Ryanair continues to make huge profits and both Ryanair and EasyJet grab ever more market share. BA's only reason for sustaining its European routes is to feed into their highly profitable trans-Atlantic routes via their hubs at Heathrow, Gatwick, and Manchester. Essentially BA earns its profits from ferrying business class passengers to the US and Asia - a very different market. The low cost model simply doesn't work on long haul.
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Old June 28th, 2004, 06:58 PM   #207
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Quote:
Originally Posted by Monkey
Ryanair have actually been around for a long time. They almost went bankrupt until Michael O'Leary took over and decided to relaunch the airline as a budget carrier along the lines of Herb Kelleher's Southwest. EasyJet is a more recent start up. I got these figures for you:

EasyJet passenger growth:



To May 2004 EasyJet's current rolling annual total stands at 22,388,318 - just behind Ryanair.
I see....Airasia wasent a budget airline from the ground up either. It was around a few years earlier until someone (the current CEO) came along and turned it into one, so its growth sort of mirrors Ryanair.

Looking at EasyJet's figures, you can see that its growth seems to grow exponentially, based on economies of scale, I would suppose, and the increasing encroachment on the market with the fending off of rivals? It dosent seem to grow as quickly in the early years, so since AirAsia is so new, it might follow the growth patterns later.
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Old June 28th, 2004, 07:05 PM   #208
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I got the figures for both of them now:

EasyJet passenger growth:




Ryanair passenger growth:




Current rolling annual totals to May 2004:
EasyJet = 22,388,318
Ryanair = 24,143,070
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Old June 28th, 2004, 07:08 PM   #209
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Thanks. Notice the same pattern, eh?

I suppose both are more "comparable" because they started turning budget at about the same time.
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Old June 28th, 2004, 07:10 PM   #210
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Quote:
Originally Posted by huaiwei
I see....Airasia wasent a budget airline from the ground up either. It was around a few years earlier until someone (the current CEO) came along and turned it into one, so its growth sort of mirrors Ryanair.

Looking at EasyJet's figures, you can see that its growth seems to grow exponentially, based on economies of scale, I would suppose, and the increasing encroachment on the market with the fending off of rivals? It dosent seem to grow as quickly in the early years, so since AirAsia is so new, it might follow the growth patterns later.
EasyJet and Ryanair both took over smaller rivals in 2002 which explains the particularly high growth to 2003. However these airlines had themselves grown very quickly over the same time period. EasyJet took over Go and Ryanair took over Buzz. Go and Buzz were low cost start-ups founded as separate brands by BA and KLM and later spun off as independent businesses (management buy-out).
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Old June 28th, 2004, 07:11 PM   #211
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Quote:
Originally Posted by huaiwei
Thanks. Notice the same pattern, eh?

I suppose both are more "comparable" because they started turning budget at about the same time.
EasyJet was founded as a budget airline. However Ryanair had already become a budget airline before EasyJet was founded.
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Old June 28th, 2004, 07:13 PM   #212
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Old June 28th, 2004, 07:17 PM   #213
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Quote:
Originally Posted by Monkey
EasyJet and Ryanair both took over smaller rivals in 2002 which explains the particularly high growth to 2003. However these airlines had themselves grown very quickly over the same time period. EasyJet took over Go and Ryanair took over Buzz. Go and Buzz were low cost start-ups founded as separate brands by BA and KLM and later spun off as independent businesses (management buy-out).
Yes I am aware of that. Perhaps the Asia side may be littered with carcasses too over the next few years, and only a few like AirAsia might gobble them up and grow very quickly too?
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Old June 28th, 2004, 07:18 PM   #214
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Since full-service airlines are not price-competitive on the regional routes, perhaps they can code-share with a budget carrier so both sides make the most profits in their own niche markets. Management will need to decide what kind of balance to achieve - whether to continue sustaining losses by providing direct regional connections for their long-haul customers or move them off their planes to a partner carrier with less service and amenities. Full-service carriers can then retreat from their intercontinental routes and focus on long-haul, while LCCs can attract more customers to feed into international routes.

Ryanair and Easyjet seem to be well-established to maintain their competitive advantage. However, traffic numbers alone are not indicative of their financial position. Ultimately profitability and cash flow will rule the day.

LCCs have encouraged a mode switch in travel. Railway companies should be very concerned that this trend will siphon away a lot of their traffic. Tourism should increase substantially across Europe as it has gotten so much cheaper to fly away for a weekend excursion. Europe's concentrated population and short distances between major cities are perfect for LCCs to thrive.
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Old June 28th, 2004, 07:18 PM   #215
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Quote:
Originally Posted by Monkey
EasyJet was founded as a budget airline. However Ryanair had already become a budget airline before EasyJet was founded.
Yeah, but I am talking about their growth patterns as you can see so clearly in the graphs, whether or not they were founded as budget airlines in the first place.
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Old June 29th, 2004, 05:33 AM   #216
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June 29, 2004
SilkAir gets trim to stay ahead
From renting spares to chucking bulky manuals, airline takes on low-cost rivals

By Choong Choon Yee

WITH competition from budget carriers heating up and fuel prices still high, SilkAir is focusing on asset utilisation to improve its competitiveness.

SilkAir chief executive Mike Barclay cited a deal with SIA Engineering announced last month as a good example of the airline’s commitment to increasing cost efficiency.

Mr Barclay, 36, who assumed his current post in January, was speaking to Streats during the airline’s inaugural flight to Chongqing on June 15.

The former SIA general manager in Germany explained that SilkAir had sold its Airbus A-320 aircraft spare parts to SIA Engineering for around $20 million.

They will now pay for spares as required and avoid paying storage charges.

He said: “When you have that many assets sitting around doing nothing, it costs some money... But now, it will be a more efficient way of doing business.”

He added that the airline is also embarking on a project that he calls the “less paper cockpit”.

The idea is to reduce bulky manuals in the cockpit that contain vital information such as flight paths and airport diagrams, which weigh 20-30kg a flight, by storing the information on laptops.

He said: “Not only do we benefit from lighter weight in the cockpit, but from the safety point of view, there would be much more accuracy in terms of data entry and the planning of flights.”

He also said that SilkAir is preparing for several branding activities to reinforce its position as the “preferred” airline in Asia.

Costing “several hundred thousands”, these branding activities, beginning next month, will be “colourful and fun”, with the tagline, “Where the world unwinds”.

“It is to reinforce our position as the preferred airline in Asia. We had a branding launch last year but that was set back by Sars, and now, we decided to come back,” Mr Barclay said.

SilkAir also plans to be more “price active” this year, he added.

Half of its customers are “inter-line” passengers – customers who connect from other airlines, with about 70 to 80 per cent from SIA.

As for non-connecting passengers, he said that most of SilkAir’s routes do not appeal to budget carriers because they are either too long or too low on traffic.

He said that about two-thirds of SilkAir’s destinations generates almost no passengers because they are typically holiday destinations with small populations.

With SilkAir now flying twice a week to Chongqing, its fifth destination in China, Mr Barclay said that there are plans to fly daily in the next 18 months to two years.

There are also plans to increase the number of flights to destinations such as Xiamen and Chengdu.

He said SilkAir is currently looking at another two to three destinations in China and is studying traffic rights and flight paths with the help of the Chinese authorities.

He also sees good opportunities in India, where the airline flies to three destinations – Hyderabad, Kochi and Thiruvanan-thapuram.

“We see a good potential in India but the government has just changed, and we have to find out the what the new government’s view will be on the liberalisation that the former government had embarked on.”

Copyright © 2003 Singapore Press Holdings Ltd. All rights reserved.
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Old June 29th, 2004, 05:34 AM   #217
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June 29, 2004
Medical theme tours for Valuair
Budget carrier tying up with travel agencies, hospitals to offer surgery-cum-shopping trips here and abroad

By Janice Wong

LOCAL budget carrier Valuair director Jimmy Lau, who has been eyeing the burgeoning medical tourism market, was delighted when travel agency Meditour approached him to organise a tour package.

It was for passengers who want to correct their short-sightedness by undergoing Lasik surgery in Bangkok.

This is how what is believed to be Singapore’s first Lasik surgery tour package was created.

The seven- to eight-day tour is limited to 15 people a group, with two Valuair flights leaving on Aug 4 and 5.

Here is what is in store for participants:

On the second day, they will undergo a three-hour consultation with eye doctors at Bangkok’s Laser Vision Lasik Centre.

The half-hour operation is then performed under local anaesthesia on the same day.

Participants will proceed to Pattaya, a beach resort, for a holiday and, before returning to Singapore, undergo a post-operation check-up.

Mr Lau said: “We have identified medical tourism as a growth market. Medical tourists appreciate value-for-money and brisk yet personalised service.

“Our cabin crew will give such passengers special attention.”

Dr Kenneth Wong, a medical doctor and managing director of Meditour, said: “Valuair is known for its themed travel and Lasik is an innovative theme. I am confident of a positive response.”

Previously, Valuair’s all-women shopping flight to Hong Kong had sold out. It also tied up with cosmetic brand Maybelline to offer makeovers on board.

Mr Lau, who has assembled a team to focus on medical tourism, stressed that he is not hampering government efforts to promote Singapore as a regional medical hub.

Mr Lau said: “We also want to bring such tourists into Singapore. We are in talks with an Indonesian marketing partner and private medical groups.”

Private hospitals here are keen.

A spokesman from Raffles Medical Group said: “We are open to collaborating with omplementary industries as there are considerable synergies to be gained.”

The medical group has a similar tie-up with Singapore Airlines subsidiary Tradewinds for health-screening packages and described the response as “encouraging”.

Mr Robert Khoo, CEO of the National Association of Travel Agents Singapore, said: “I foresee more tie-ups like these as people become more health-conscious and mobile.”

Valuair’s package, including airfare, hotel stay, breakfast and transfers, costs about $3,000 for the standard Lasik procedure for both eyes.

Those who want the more sophisticated wavefront Lasik procedure pay $3,800.

Hospitals in Singapore charge between $3,500 and $5,000 for surgery alone.

Since Dr Wong started marketing the tours last Friday, no one has paid a deposit, but there have been more than 20 enquiries.

One of them was from Mr Casey Goh, 38, a bank officer.

Mr Goh said: “I am seriously considering. It is cheaper and I get a holiday. A guided tour means I don’t need to do my own research.

“I am comforted that there will be Singaporeans sharing the experience with me.

“I am not concerned that the doctors are operating on so many patients because I heard it is a short simple procedure.”

Still, some caution should be taken.

The Singapore National Eye Centre’s (SNEC) advice is for Singaporeans to think beyond price and technology.

SNEC said: “Many other factors are important to ensure optimal outcomes. The centre and surgeon’s track record, experience, quality control and accreditation need to be considered.”

Copyright © 2003 Singapore Press Holdings Ltd. All rights reserved.
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Old June 29th, 2004, 05:54 AM   #218
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AirAsia needs to increase their fleets and route frequency in order to match the growth that Ryanair and Southwest created. Will take sometimes if not decade, due of massive competitive market in Asia and most people in Asia intend to fly with normal or LCC airlines that offer meals and drink.

btw, I heard Southwest is now a major airlines rite?

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Old June 29th, 2004, 10:29 AM   #219
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Check the trip report for Valuair on airliners.net trip report forum, the staff are very friendly and the food is delicious too.

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Old June 29th, 2004, 11:49 AM   #220
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/\ In terms of numbers yes - Southwest is one of the largest airlines in the world (66 million pax pa). However Southwest's philosophy and modus operandi is 100% no frills. They have fast turnarounds, no overnight stays for staff, only fly short haul, and only use one aircraft type (Boeing 737s).
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