Originally Posted by
Mutu
Yep, just needs more volume to spread some of the central fixed overhead across. Must have been expected and I would assume they are broadly on plan? Otherwise they really have got the pricing proposition wrong...I suspect the problem is not so much the resilience of the legacy guys but that rush of all business carriers that entered the market. Given the ceiling on their fare is probably something like 110% of the corporate rate J on BA/VS for corporate travellers, they just need to fly (a lot) more bums. Load factors looking fine so far.
Excuse my ignorance, but if they are flying at an >80% load factor, they surely can't actually get many more bums on seats without seriously increasing their costs (i.e. by flying extra routes / frequencies)? To my simple mind they need either to push up the revenue per passenger by c.$1000 or to reduce costs. Both of these look a pretty tall order to me given the competition and the rising cost base.
Or am I completely off the plot (not the first time...)