I am confused…what exactly is the purpose of this C17?

I think the point is that it’s not really a Qatar Airways aircraft, rather a government aircraft operated by a devision of the airline. Many of the state carriers in the region do the same with regards to their presidential/royal transport aircraft. They are for all intents and purposes military, but with a special division of the national airline set up to operate them, and hence they appear in airline colours.

Consequently, the aircraft will be used for humanitarian flights etc, as described, on behalf of the government rather than the airline.

I know I’m not known for Ryanair bashing, sometimes quite the opposite, so it may come as no suprise that I would come on here to provide some insight (hopefully) as to the effects of airport charges and APD, and to explain how the airlines have dealt with this in the last couple of years.

Through work I have spent a lot of time looking at the effects of Airport charges on passenger demand, it is a tedious task, but someone has to do it :o. Most of the data I analyse is in relation to UK airports, as the Centre for the Study of Regulated Industries at Bath University publishes detailed data in relation to most UK airports (only the regulated airports actually need to report, but the others tend to do so anyway which is useful) which allows you to track aeronatautical income changes against passenger changes. There are some small problems with the data admittedly and so occasionally proxies and adjustments need to be made, but the pattern in the UK in recent years has been very clear, that is to say, where average charges per passenger increase at airports, passenger growth declines or goes negative. The figure below is the most recent, and you can see some outliers, but also a clear trend line.

So what efefct does £1 have on an airline, well to start with you have to consider the way airlines treat charges and taxes these days. I know it is easy to talk about all the add-ons from the LCC’s, but infact in a lot of their tickets they absorb all of the costs, APD included, so for example, my recent fares to Italy, at £2.50 included the airport charges and APD. As charges and APD have increased, the airlines have not necessarily increased their fares to the same proportion, if at all, and have therefore absorbed the increase. Not all of the airlines’ fares are £2.50 obviously, and some people will pay alot more and have to pay the tax/charges too, so you need to consider the average yield to the airline. However, by aborbing the charges increases on a proportion of the fares sold, then the overall average yield has dropped, and in some cases, substantially. For a number of key jobs we have undertaken we have been provided with the yield data of some significant airlines and used this to track the effect of selected increases on their yields. Now £1 may not seem much, however on some routes it can be enough to cut the average yield by so much that the route is no longer viable to operate, unfortuately you have to take my word for this due to the sensitive nature of yield data and opertaing costs.

So why not just add the £1 flat onto each fare, and forget about it? Well because, rightly or wrongly (there are definate arguments both ways) we have been spoilt by low fares and so the travelling public has become highly price sensitive, to such an extent that traditional price-elasticity ratios associated with air fares increases don’t necessarily apply anymore. Much of the travel on th LCC’s is discretionary, particulalry driven by the question “where can I get to at the lowest ticket price?” Every small step up in ticket price cuts another layer of potential demand out, and a good example is in relation to Norwich. At NWI, the Airport imposed a £5 development fee, payable by the passengers on departure, so the cost was not even visible at the time of booking on the website (I refer to Flybe here), but the £5 became too restrictive, and cut out a % of the passengers who decided that they would fly from STN where the fares were already lower, but the gap between RYR/EZY fares and BE fares increased still further with the £5. It didn’t cut demand completely, but what it did so was reduce demand to a point to make some routes and frequencies unviable, and Flybe scaled back substantially their operations from NWI. So it is the reduction of demand to any small amount that can start to jeopardise route viability.

If you look at STN, the average airport charges have jumped substantially over the last 2 years as the price cap was lifted and deals unwound, and the effect on airline yields for all carriers at the Airport has been significant, with little or no scope to absorb £1 on many of the routes.

So what about the incumbent traditional airlines? Well they’re not immune to this either, and I know from discussions with such airlines that the APD increases are causing concern. Because of the expectation of low fares which was driven by the LCCs, the incumbents had to reduce fares also to attract demand, and so their yields have been squeezed and they increasingly absorb costs too these days, even for those who don’t liek LCC’s, you have benefitted from lower air fares because of the competition effects of these carriers. So their yields will be affected by the £1 increase and demand will drop for them too. Interestingly this time, the APD increase on long haul may be a killer, because until now, the short haul sector has been the most price sensitive sector due to the higher % of a fare increased with APD, but the newly proposed APD increases, once fully in place, will potentially add between 10-20% to a long haul fare, and so we may start to see an increase int he sensitivity of long haul travel as a result.

It is difficult to show how critical £1 is to many airlines without sharing data, but I hope I have at least explained a bit for you.

Could they be considering to cut one of the 777’s services and just have the one daily service to DXB using the A380 perhaps?:confused:

Not in the short term no, but I know it has been discussed in the past.

I could probably cope without an assigned seat as well.

My brother and I flew RYR to Milan and back (from Manchester) last week, and were among the last to board in both directions but sat together in emergency exit seats both ways (and had nobody elese sat with us on the return). It always amazes me that these seats don’t go sooner.

You have to put it into perspective a bit, not least that only 30% of RYR pax will be affected by this and so the infrastructure at the airports is already dealing with 70% of it through the security system anyway. Undoubtedly some passengers will be lost as a result of this, but much of RYR’s traffic is short stay anyway, for example, I fly to Italy tomorrow for 4 days and would only intend to take hand luggage for speed and convenience anyway.

I think what concerns me more is the general shift toward shand luggage, and in fairness it is seen across all the airlines, not just RYR/EZY. The number of times you get on any flight and find someone struggling with some whopping case trying to lift it into the overhead locker alarms me a lot. I may be making this next bit up and haven’t checked the AAIB report, but from memory I think they highlighted hand luggage as a killer in the Kegworth disaster and recommended limits on this. I would hate to be under one of those heavy bags in an accident if the locker came open (which they do).

Dont belive everything that you read , The inside grapevine say other wise , about 4 months ago a certain airline was on very thin ice , then announced a profit

Well, if you are to believe 49% shareholder Singapore Airliens, they contest how much/if any profit was made. Because VS is not a publicly listed company, they do not have to undertake their accounts to international accounting standards, and according to SIA, if this was done the result woudl eb very different. See below…

Virgin shareholder SIA views full-year performance differently
David Kaminski-Morrow, London (26May09, 22:12 GMT, 260 words)

Virgin Atlantic Airways’ disclosure today of an increased pre-tax profit appears at odds with the financial performance of the company as seen by investor Singapore Airlines, which owns 49% of the UK long-haul carrier.

While Virgin declared that it doubled its pre-tax figure to more than £68 million ($108 million) in the year to February 2009, Singapore Airlines points out that Virgin does not apply international financial reporting standards (IFRS) but instead still prepares its accounts under UK generally accepted accounting principles (GAAP).

Singapore Airlines, in its own recently-released full-year figures, stated that its associated companies lost S$106 million ($73 million) in the fourth quarter to March 2009.

“That’s largely coming out of our investment in Virgin Atlantic,” said Singapore Airlines senior vice-president for finance Chan Hon Chew.

Chan added that, as a private company, Virgin Atlantic was able to prepare its finances under GAAP, while listed European Union companies must use IFRS.

Singapore Airlines chief Chew Choon Seng pointed out that Virgin Atlantic contributed S$400,000 ($276,000) over the two halves of the year because it was responsible for a “big part” of the first-half share of profits from associates.

Virgin’s statement on its financial performance today does not indicate the accounting standard used.

But the airline says it generated the pre-tax profit of £68.4 million, up from £34.8 million in the previous year, despite the volatile price of fuel.

Virgin Atlantic has not disclosed a figure for retained profit for the year in its statement. For the previous financial year it posted a retained profit of nearly £48 million.

Source: Air Transport Intelligence news