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Old November 25th, 2004, 03:40 AM   #581
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^ This is what is going to happen in the bloodbath. The plethora of small operators will go under and Ryanair and EasyJet will snap up the slack.
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Old November 25th, 2004, 03:44 AM   #582
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I am afraid the bubble of Low Cost airlines will burst, especially in the US, where they have 30% market share, and where prices are too low to make a profit.
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Old November 25th, 2004, 03:47 AM   #583
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I guess BA's profits come from intercontinental flights, because there is no way in hell that they could make money on those low fare European routes, competeing with the likes of easy jet and ryanair.
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Old November 25th, 2004, 03:52 AM   #584
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Quote:
Originally Posted by Monkey
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.
There must be a few high-yielding European destinations from LDN, no? How about Moscow, Brussels, and Milan?
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Old November 25th, 2004, 11:46 AM   #585
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Quote:
Originally Posted by huaiwei
something I wanna find out...how is it the companies find it profitable to almost multiple their route networks by 2 or 3 flying to approximately the same destinations from each airport in London?
Because they are regional airports for British travellers as well as catering for the city centre to city centre market for visitors to London. About two thirds of the people in the London airports' catchment areas don't live in Greater London at all. People who live north of London fly from Stansted and Luton and people who live South of London fly from Gatwick, without actually going into Greater London at all. If Easyjet didn't provide service to a popular destination from both sides of London, most British passengers on the side they didn't serve would probably fly with someone else instead, rather than driving all the way around London to catch an Easyjet flight

Last edited by Philip Cronin; November 25th, 2004 at 11:53 AM.
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Old November 25th, 2004, 11:55 AM   #586
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Quote:
Originally Posted by Lee
There must be a few high-yielding European destinations from LDN, no? How about Moscow, Brussels, and Milan?
Maybe Moscow and Milan, but not Brussels, which is served by both the Eurostar train and the Virgin Express budget airline.
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Old November 25th, 2004, 06:54 PM   #587
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Sharks smell a short-haul shake-up:
The larger European low-cost airlines are awaiting a bloodbath

By KEVIN DONE and ADRIAN MICHAELS
24 November 2004
Financial Times

Ryanair, the leading European low-cost airline, will today announce plans to expand in the Italian market to take advantage of the collapse of Volare, the Italian low-fare scheduled and charter operator.

EasyJet, the key rival to Ryanair, is also sensing blood and is hopeful of being able to pick up Volare take-off and landing slots at Paris Orly airport.

The sharks are circling amid signs that the long forecast shake-out in the short-haul airline sector in Europe has started.

Volare's collapse follows only weeks after V-Bird, a Dutch-owned carrier operating out of Dusseldorf-Niederrhein airport in Germany, also ceased operations.

Ray Webster, chief executive of EasyJet, said yesterday that there were now at least 47 low-cost airlines in Europe compared with only seven three years ago.

"This is clearly not sustainable in the longer term and we expect consolidations and liquidations - indeed these have started to appear in recent months."

However, the picture is complicated because, even as some carriers go out of business, others are still determined to enter the sector.

In Italy, a successor to Volare - myair.com - is seeking to launch next month with three Airbus A320s, rising to four in January and six by April. It is being started by several former Volare managers.

Ryanair, which has a sizeable operation in Italy with two bases, one at Rome-Ciampino and one at Milan-Bergamo, will be seeking to crush such aspirations.

Michael O'Leary, Ryanair chief executive, said recently that high oil prices and competition would force the pace of the shake-out.

"Many of our competitor airlines who were losing money heroically when fuel was Dollars 25 a barrel are doomed the longer it stays at Dollars 50. Our prediction of a bloodbath and airline casualties this winter may be accelerated by record high oil prices as well as by irrational competition.

"We anticipate that there will be further airline casualties as the 'perfect storm' of declining fares and record high oil prices force loss-making carriers out of the industry."

Volare declared itself insolvent in the early hours of yesterday morning after a board meeting gave up hope of finding more money for a recapitalisation plan.

The company, which is privately owned, says it is missing in the short term Euros 60m (Dollars 78m) but people with knowledge of its finances say at least double that amount is realistically needed.

In the meantime, the Italian government has said it is looking at solutions for saving the company.

It seems likely that a special administrator will be appointed to co-ordinate any plans with the bankruptcy court. This would be an attempted rescue involving an amendment to a new law enacted for the collapse of dairy company Parmalat.

Enrico Bondi, Parmalat's administrator, at least has a viable business on which to base his efforts. People who have analysed Volare's situation doubted it could easily be saved.

Its fleet of about 25 aircraft is leased and now out of the company's hands. It also has no insurance to fly. The withdrawal of insurance and supplier deliveries last week caused the company to suspend all flights last Friday.

If rivals start to take over its slots at certain airports, Volare's hopes of a relaunch will diminish further.

Even worse, the Italian financial police have raided the company's offices and are conducting an investigation into allegations of false accounting. KPMG completed a forensic audit recently and raised questions about the company's accounts.

Deloitte audited the company's books in 2002 and 2003. "In both cases," it said yesterday, "the audit showed that Volare was in financial difficulty and that the company's continuation, and hence the recovery in its asset values, depended on finding new financial means to implement the board's strategy," Deloitte said.

While rivals in the low-cost airline business have boomed, Volare's problems, regardless of allegations of bad accounting, stem from crucial management mis-steps and bad timing.

Volare was combined with charter company Air Europe in 2000, increasing its overall debt just as the airline industry was about to be plunged into global recession, the events of September 11 2001 and later the Sars epidemic.
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Old November 26th, 2004, 04:51 AM   #588
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Quote:
Originally Posted by babystan03
This story was printed from TODAYonline

Tiger Airways chief sues SPH for libel Suit charges that a BT report suggested he was 'incompetent'

Wednesday • November 24, 2004
Muahhaa!!! So happening ah! The thing is I somehow didnt take it so negatively when I first read that report?
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Old November 27th, 2004, 06:38 PM   #589
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Why is it Frills LCC like Jet Blue, TED and Song have been so successful in the US and offer facilities like Satelite TV, 32-34inch Leg Room, Assigned Leather Seats and Inflight Drinks and Snacks when carriers in the UK and Europe have gone the the opposite way?

Offering 29inch Leg Room, No Assigned Seats, No Connecting Services, etc, etc...

The only examples I can recall in Europe that have offered cheap frills is Duo and Jet Magic which have both failed. But they are not really compariable with Jet Blue.
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Old November 27th, 2004, 08:08 PM   #590
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^ In Europe they compete on price to maximise the differential between their offering and that of the full service carriers. A Ryanair flight is considerably cheaper than a similar distance on Southwest or JetBlue.
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Old November 27th, 2004, 08:13 PM   #591
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Quote:
Originally Posted by Monkey
^ In Europe they compete on price to maximise the differential between their offering and that of the full service carriers. A Ryanair flight is considerably cheaper than a similar distance on Southwest or JetBlue.
Why is Ryanair cheaper than Southwest, when both offer the same product?

Also, when you say cheaper, can you show an example?
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Old November 27th, 2004, 08:17 PM   #592
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I just went on Ryanair.com, and a London-Palermo ticket was 122 pounds. That's just as expensive as MCO-JFK on Jetblue.

At the same time I found a LDN-Cork route for only 12 pounds! Wow!

Last edited by Lee; November 27th, 2004 at 08:24 PM.
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Old November 27th, 2004, 08:40 PM   #593
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Quote:
Originally Posted by Lee
Why is Ryanair cheaper than Southwest, when both offer the same product?

Also, when you say cheaper, can you show an example?
Yeah loads of examples. Just go on the websites and see for yourself. I have flown all over Europe (Nice, Madrid x2, Barcelona, Rome, Palermo, Prague, Berlin, Budapest) for virtually nothing with EasyJet and Ryanair. And as you say yourself they don't offer the same. JetBlue and Southwest are closer to the full service airlines.

Search on Ryanair.com for return flights from London Stansted to Malmo from Wed 1st March to Wed 2nd March (ie typical overnight business trip). You should find 99p each way (£27.55 return inc taxes). Try and get me any route for less on Southwest or JetBlue. I looked at Los Angeles to Las Vegas (just one third of the distance from London to Malmo) yet the price, the cheapest that Southwest offers ($98.20), is double Ryanair's price despite the weakness of the dollar and much shorter distance (363km compared to 958km).
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Old November 27th, 2004, 08:48 PM   #594
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Quote:
Originally Posted by Lee
I just went on Ryanair.com, and a London-Palermo ticket was 122 pounds. That's just as expensive as MCO-JFK on Jetblue.

At the same time I found a LDN-Cork route for only 12 pounds! Wow!
I flew Ryanair to Palermo last year for £30 return including taxes - and that was on a holiday weekend (ie a peak time). I went ot Sicily to climb Mount Etna. I have flown twice to Madrid, both times at weekends, with Easyjet for just £18 return including taxes.
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Old November 27th, 2004, 08:54 PM   #595
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Quote:
Originally Posted by Monkey
Yeah loads of examples. Just go on the websites and see for yourself. I have flown all over Europe (Nice, Madrid x2, Barcelona, Rome, Palermo, Prague, Berlin, Budapest) for virtually nothing with EasyJet and Ryanair. And as you say yourself they don't offer the same. JetBlue and Southwest are closer to the full service airlines.
How is Southwest closer to full service airlines, when it doesn't offer any service besides a can of soda? JetBlue is obviously different.

Quote:
Originally Posted by Monkey
Search on Ryanair.com for return flights from London Stansted to Malmo from Wed 1st March to Wed 2nd March (ie typical overnight business trip). You should find 99p each way (£27.55 return inc taxes). Try and get me any route for less on Southwest or JetBlue. I looked at Los Angeles to Las Vegas (just one third of the distance from London to Malmo) yet the price, the cheapest that Southwest offers ($98.20), is double Ryanair's price despite the weakness of the dollar and much shorter distance (363km compared to 958km).
Yes, I am seeing to incredible offers myself. Southwest's cheapest offer is $39 each way, which applies to many routes. Jetblue offers roundtrip routes for as low as $49 on short interstate flights, to $200 on trans-con (NY-LA). Actually, I found a NY-LA flight for a little over $100. Are there any Ryanair flights that long, as cheap?

I am still amazes that Ryanair is still able to make money.
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Old November 27th, 2004, 08:57 PM   #596
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London-Malmo:

I searched December 5-14, and Ryanair offered it for only $11 pounds!!! Incredible. Unfortunately, I don't think they are making money on that.
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Old November 27th, 2004, 09:27 PM   #597
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Quote:
Originally Posted by Lee
How is Southwest closer to full service airlines, when it doesn't offer any service besides a can of soda? JetBlue is obviously different.
Ryanair doesn't even give you a bottle of soda. You can buy one if you like but it's extra.
Quote:
Originally Posted by Lee
I am still amazes that Ryanair is still able to make money.
Ryanair makes loads of money - very profitable. They have made a profit every quarter since O'Leary took charge. At one point their market capitalisation was the highest of any airline in Europe. They have an extremely efficient model and some airports actually pay them to fly to their airports because they generate so much traffic and therefore make such a contribution to airport retail business. Ryanair's load factor (ie percentage bums on seats) is off the scale - nearly 90% - much higher than Southwest's.
Quote:
Originally Posted by Lee
Actually, I found a NY-LA flight for a little over $100. Are there any Ryanair flights that long, as cheap?
Ryanair doesn't have any flights that long. They prefer to fly the shortest routes where the low cost model works best. The shorter the better because they can offer more flights per day with a single aeroplane and obviously spend less on fuel per flight. Easyjet's longest flight (London to Athens) is also shorter than NY-LA but Stelios, the Greek founder of EasyJet, has an emotional attachment to his homeland. Also millions of Brits go on holiday to Greece every year and there are a lot of Greek business interests, especially in shipping, run from London.

Last edited by Monkey; November 27th, 2004 at 09:38 PM.
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Old November 27th, 2004, 09:34 PM   #598
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What is the longest flight time that Ryanair or Easyjet fly on their longest routes?
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Old November 27th, 2004, 09:42 PM   #599
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Quote:
Originally Posted by huaiwei
What is the longest flight time that Ryanair or Easyjet fly on their longest routes?
The longest flown by either of them is EasyJet's route to Athens from the UK. From London it takes 4 hours and a bit longer from other parts of the UK.
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Old November 27th, 2004, 09:46 PM   #600
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^ Correction - EasyJet fly to Athens only from London airports and Berlin. So London to Athens is the longest.
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