WW "airlines to go bust"
#1216
FlyerTalk Evangelist
Join Date: Mar 2010
Location: JER
Programs: BA Gold/OWE, several MUCCI, and assorted Pensions!
Posts: 32,190
Full in CW, empty in W/Y? Interesting thought!
#1217
Join Date: Jan 2010
Posts: 7,464
#1218
FlyerTalk Evangelist
Join Date: May 2000
Location: TPA for now. Hopefully LIS for retirement
Posts: 13,782
#1219
Join Date: Jul 2009
Programs: BAEC Silver, IHG Diamond
Posts: 7,836
I'm itching to get back in the air and would at a moments notice if it were possible.
#1220
Join Date: Feb 2010
Location: Bombay
Programs: EC Blue, EB Silver, FB Gold
Posts: 551
I used to work in a different part of the logistics industry and have done my fair bit of yield management and profitability analysis. In general we had four general types of cargo, which was then subdivided into contract and spot cargoes.
Contract cargo forms the base - without it you will struggle to fill up. Spot is the cream on top. You need a mix of both in order to reach the highest possible load factor, but if you only have contract cargo the result is not very good. If applied to BA I strongly doubt they could only live with contract cargo (ie those on corporate deals) and opportunistic spot (ie those on fares bought during sales and EC redemptions). They need a mix, but even then there will be variables. Likely more high yielding Y during school holidays and lower in F/J, while the situation is be the opposite at other times of the year.
We used to calculate our yield based primarily on a cubic metre basis, and it was interesting to see the huge differences based on various cargo mixes. Some of our contracts were sweetened by offering the same rates to cars and vans (compare that with Y and Y+ for an airline comparison). If there were a lot of vans our revenue, profit and yield all took a trashing even though the load factor was high.
Contract cargo forms the base - without it you will struggle to fill up. Spot is the cream on top. You need a mix of both in order to reach the highest possible load factor, but if you only have contract cargo the result is not very good. If applied to BA I strongly doubt they could only live with contract cargo (ie those on corporate deals) and opportunistic spot (ie those on fares bought during sales and EC redemptions). They need a mix, but even then there will be variables. Likely more high yielding Y during school holidays and lower in F/J, while the situation is be the opposite at other times of the year.
We used to calculate our yield based primarily on a cubic metre basis, and it was interesting to see the huge differences based on various cargo mixes. Some of our contracts were sweetened by offering the same rates to cars and vans (compare that with Y and Y+ for an airline comparison). If there were a lot of vans our revenue, profit and yield all took a trashing even though the load factor was high.
#1222
Join Date: Feb 2018
Location: UK
Programs: BAEC Silver
Posts: 153
I think it will vary route by route. For example, there will be pent up demand from wealthier people who have money to spend to get where they want to go and are desperate to have a holiday. So routes like the Caribbean, Florida, Maldives, Mauritius and the Seychelles may see higher prices due to this demand. Equally there will be routes that BA need to keep flying to maintain their commercial contracts in the longer term (NYC, SFO, LAX, HKG, PEK etc), but these companies will only be booking last minute when essential, so you maybe able to get cheaper prices if booking in advance to ensure flying with a decent load factor.
Another factor will be how IAGs liquidity looks. If they need to get some extra liquidity they may decide take a small long term hit to get money in the door now.
Another factor will be how IAGs liquidity looks. If they need to get some extra liquidity they may decide take a small long term hit to get money in the door now.
#1223
FlyerTalk Evangelist
Join Date: Mar 2006
Location: Mostly UK
Programs: Mucci Extraordinaire, Hilton Diamond, BA Gold (ex BD)
Posts: 11,210
If we had a bad case where VS cease operations and enough other airlines cease operations to open up slots can we see a scenario where EZY would start a significant operation from LHR (assuming HAL reduce their fees due to current market conditions)?
As for LGW south definitely seems the obvious one to keep open as that's where the station is. I can see EZY wanting to keep north if they've invested a lot in it, VS was another airline that invested in this terminal (converting the old BA lounge) so I guess one option is to make the north terminal EZY only (unless VS decide to come back) and make the south terminal everyone else. This would allow EZY to have more control over passenger experience a bit like BA at T5. If things pick up that the south terminal can't cope with it then some more could relocate to north.
#1225
Join Date: Feb 2003
Programs: Sir CT-UK - Streaker pour les autres.
Posts: 5,915
#1226
Join Date: Jul 2012
Location: London
Posts: 489
It was a very long time ago but I remember EZY backing LHR as the airport they'd prefer getting the extra runway when the government were deciding which airport had the strongest case for expansion.
If we had a bad case where VS cease operations and enough other airlines cease operations to open up slots can we see a scenario where EZY would start a significant operation from LHR (assuming HAL reduce their fees due to current market conditions)?
As for LGW south definitely seems the obvious one to keep open as that's where the station is. I can see EZY wanting to keep north if they've invested a lot in it, VS was another airline that invested in this terminal (converting the old BA lounge) so I guess one option is to make the north terminal EZY only (unless VS decide to come back) and make the south terminal everyone else. This would allow EZY to have more control over passenger experience a bit like BA at T5. If things pick up that the south terminal can't cope with it then some more could relocate to north.
If we had a bad case where VS cease operations and enough other airlines cease operations to open up slots can we see a scenario where EZY would start a significant operation from LHR (assuming HAL reduce their fees due to current market conditions)?
As for LGW south definitely seems the obvious one to keep open as that's where the station is. I can see EZY wanting to keep north if they've invested a lot in it, VS was another airline that invested in this terminal (converting the old BA lounge) so I guess one option is to make the north terminal EZY only (unless VS decide to come back) and make the south terminal everyone else. This would allow EZY to have more control over passenger experience a bit like BA at T5. If things pick up that the south terminal can't cope with it then some more could relocate to north.
#1227
Join Date: Oct 2009
Posts: 5,041
Alitalia is very much alive and kicking
ROME, May 7 (Reuters) - The Italian government will inject at least 3 billion euros ($3.2 billion) fresh capital into Alitalia, the industry minister said on Thursday,
...Alitalia would “focus strongly on long-haul routes, also with new transatlantic alliances.”
https://www.reuters.com/article/ital...-idUSL8N2CP4B6
ROME, May 7 (Reuters) - The Italian government will inject at least 3 billion euros ($3.2 billion) fresh capital into Alitalia, the industry minister said on Thursday,
...Alitalia would “focus strongly on long-haul routes, also with new transatlantic alliances.”
https://www.reuters.com/article/ital...-idUSL8N2CP4B6
#1228
Join Date: Oct 2015
Posts: 116
Alitalia is very much alive and kicking
ROME, May 7 (Reuters) - The Italian government will inject at least 3 billion euros ($3.2 billion) fresh capital into Alitalia, the industry minister said on Thursday,
...Alitalia would “focus strongly on long-haul routes, also with new transatlantic alliances.”
https://www.reuters.com/article/ital...-idUSL8N2CP4B6
ROME, May 7 (Reuters) - The Italian government will inject at least 3 billion euros ($3.2 billion) fresh capital into Alitalia, the industry minister said on Thursday,
...Alitalia would “focus strongly on long-haul routes, also with new transatlantic alliances.”
https://www.reuters.com/article/ital...-idUSL8N2CP4B6
#1230
Join Date: Feb 2011
Posts: 5,797
Alitalia is very much alive and kicking
ROME, May 7 (Reuters) - The Italian government will inject at least 3 billion euros ($3.2 billion) fresh capital into Alitalia, the industry minister said on Thursday,
...Alitalia would “focus strongly on long-haul routes, also with new transatlantic alliances.”
https://www.reuters.com/article/ital...-idUSL8N2CP4B6
ROME, May 7 (Reuters) - The Italian government will inject at least 3 billion euros ($3.2 billion) fresh capital into Alitalia, the industry minister said on Thursday,
...Alitalia would “focus strongly on long-haul routes, also with new transatlantic alliances.”
https://www.reuters.com/article/ital...-idUSL8N2CP4B6
At this point it's clear operating a sustainable airline in Italy is impossible and the government will have to ensure at least one remains.