rdc1000I have created a quick graph to try and illustrate my point above with regards to how the low fares and traditional carriers price discriminate.
rdc1000Grey Area makes a very fair point, that is to say, the original concept of ‘Low Cost Airlines’ referred to exactly that, their costs, which in theory allowed them to offer low fares because their unit costs were lower, and to some extent they operate on the basis of the Contestable Market Theory, in that you HAVE to maintain the lowest costs and respective fares you can so as not to be undercut, i.e you cannot make a super-normal profit. Collectively, these airlines have tended to move away from the title Low Cost because they think it implies cost-cutting at the expense of safety or operational minimums, which it doesn’t, so they tend to now prefer being referred to as Low Fares Carriers.
The fact that sometimes such an airline charges more than a traditional incumbent carrier is because they also undertake price-discrimination. So in order to offer their most price sensitive (or often stimulated) passengers a fare of 1p, they need to sell fares at a high price to their least price-sensitive passengers, typically business travellers who book late because they often don’t know their needs to travel far enough ahead to get good deals, but MUST pay the price, because it is necessary for them to conduct business (and also harshly it affects those who have to make last minute travel for personal reasons, such as if there has been a death in the family you have to pay more, but don’t be fooled, BA charge in this way too, as do bmi). Price-discrimination like this, therefore delivers an average fare across all the passengers on the plane, all airlines work like this, including BA and bmi, it is called yield management, and traditional carriers work heavily on this basis because they are driven by the average yield, this is not necessarily the case for a low fares carrier who wants to combine maximising the yield with maximising the load factor because this is important because volume of passengers delivers auxillary revenues. The low fares carriers therefore have a much broader level of price discrimination ranging from 1p to (perhaps) £400 rather than from £80 to £400.
So, if you’re booking a long way out, then typically it is possible to get cheaper seats with RYR than an incumbent carrier, because the latter has a lower load factor target at a higher average fare. But close to the time, RYR fares are often comparable to the incumbent’s on a competed route because that is what the market will bear. Sometimes they are higher because the airline may already have achieved its load factor and yield target and is just hoping to make as much as possible from any ‘excess’ passengers. Similarly the fare on BA or bmi may be lower on the same day because they may not have sold enough seats (because whilst they are mainly yield driven, the load factor is an issue depending on the yield) and so they recognise that they need to discount in order to keep selling seats.
Anyone confused yet? 😮
Finally I would also add that you have to consider the effect these carriers have had on the BA/bmi fare. Prior to RYR on a given route, a last minute fare may have been £400+ with the other carrier(s), who were making a super-normal profit, or at least had a cost structure which was out of control because they didn’t come under threat from another carrier. BUT the introduction of low fares carriers into the market has meant they have had to reduce their costs and pass the benefits on to passengers, for threat that an airline with lower costs could come on and undercut them and steal all their passengers. So you may think RYR looked expensive against the bmi fare, but in truth the bmi fare is actually lower because of the existence of RYR’s service.
rdc1000if there were any profits in the routes i’m sure Flybe would have snapped them up years ago!
Except that Flybe’s aircraft cannot fly into PLH, and they have jumped on routes operated by ASW from NQY.
Sutton Harbour reported annual profits from its ‘Transport’ division which included the Airport and airline. However, as I believe they have previously hinted, the Airport is loss-making, which suggests that the airline was strong enough to cross-subsidise that.
rdc1000I wonder if they chained themselves in such a way that the wheels couldn’t turn, I’d be brewing an idea is I were that airline….:diablo:
“honest ‘gov, on my pre-flight checks they weren’t there!”
rdc1000The number of flights into Heathrow is directly controlled by Heathrow itself.
The above is the only quote I shall tackle directly, the rest of my comment will take in views (including many more of David’s) without directly quoting them.
In the case of the above quote, it is not true, the limit on movements at LHR is not set by the Airport, but by the Government. The Airport is capable of handling a significant number of additional movements through mixed-mode, and I’m fairly certain, given the chance, BAA would leap at the opportunity of realising the full capacity of the Airport in it’s current state.
So what is the likely impact of no third runway at LHR, well it’s simple, it will cause serious damage to the UK economy. Whether we like it or not, the UK economy is driven by the powerhouse that is London, just as is the case in other nations where one city (understandably) dominates. What I notice from this thread is that nobody has mentioned that the third runway is not about ‘the now’, it’s not about the current economy, but about the future and the way in which London can hold it’s own on a world stage. We undertook a significant piece of work for the City of London Corporation a couple of years ago, which looked at the importance of Airports within London, and involved contact with around 3000 major firms in the City. The results were that major business’ felt that they needed relatively high frequency to a select number of cities around the world. The problem is, that select number of cities is growing. So currently it is important for them to be able to access New York, Dubai, Hong Kong etc etc easily, but they recognise that their needs to be able to get to India and China among others are growing. This doesn’t mean that the frequency requirements to NYC will reduce, just that the ability to connect to more points at a similar service level is increasing, and therefore a way must be found to accomodate this. Importantly, firms told us that the inability to make such connections will impact on the way they trade within the UK, with some suggesting that whilst they would grow in the UK with enough air transport links, that growth is likely to be placed in one of the new powerhouse cities (such as Dubai) from which world connections are easily possible.
Why not just reduce frequency and use larger aircraft then? Well again it’s not so simple. We are seeing the introduction of larger aircraft, and LHR is always going to be one of the top destinations for A380s in the world. However, the business’ need frequency also, replacing two 777s with an A380 is not necessarily an option. Business convenience dictates that if you’re sat in a meeting which overruns, and you miss your flight, you want to be able to get the next one, this is why airlines can charge such a high premium for their business class products – flexibility. Again this is something the sectors in London rely heavily on.
So why not grow regional airports? Well because you can’t force an airline to operate a service, and LHR doesn’t necessarily compete with MAN or BHX, it competes for services with CDG, AMS and FRA. An aircraft is an expensive resource, and so airlines aim to use each one they can afford on the routes which will provide them with the greatest returns. LHR is currently attractive because London (I’ll talk about the wider London system below) has a very strong financial and business services sector, and these industries (even now) can afford to pay a lot for their seats. Therefore LHR is close to the top of many airlines’ wish list because they can fill the front end of their aircraft with more valuable passengers (at least in terms of volume) than they can from any other airport in Europe. The overall passenger numbers are not what is important here, because the back-end passengers are roughly of the same value from all the major European airports. Therefore if an airline cannot get into LHR it then looks at where it can use its aircraft for the next-best return, and then the answer becomes either CDG/AMS/FRA/ZRH. They rarely look at MAN because the front end yield is so low. If the ability of the other European airports to handle the new wave of China/India/Brazil and other important new destinations grows, and they continue to increase capabilities to the traditional business markets, then suddenly you have a position in which they have stronger global connections in a modern world economy, and it looks more attractive to base businesses there, or at least direct all of your growth to one of these points. We’re already seeing signs of this. At LHR, there are around 90 airlines, at CDG this is 111 and growing, FRA is only 4 behind CDG.
The London system is complicated too, and again the demand for LHR is driven by the yield of front-end passengers. You must remember that Stansted was rebuilt in the 1980s as an overflow for LHR, and was designed on the basis that it would handle long haul services, yet 30 years later, where are the long haul servcies, and indeed what services would be there now without RYR/EZY? Airlines want to be at LHR because West London and the home counties on that side of the city are where the wealthiest travellers live, many of whom have their airfares paid for by work when they travel on business, but start or end their journeys at home. Therefore if you got an airline into LGW, STN or a new estuary airport, those highest-yielding travellers would still use only the services from LHR. Therefore the average yield on the services from the other airports is too low, and probably below those which can be achieved at CDG/FRA/AMS and therefore the airlines take their services to one of those airports instead (are you seeing a circularity here yet?). So they never grow at London unless it’s at LHR, and that only supports the growth of non-UK economies.
Is rail a viable alternative? Well there is an opportunity for some relief in the shortest of sectors, but realistically, no. Furthermore, many of the ‘NIMBYs’ whose houses would be removed for a third runway, benefit economically from LHR because of its influence over the London economy in which they presumably work and presumably where they attract a higher than UK average salary. Furthermore MANY of those affected by overflying aircraft work at the Airport.
Sorry for such a long post, I still feel I haven’t tackled half of the comments made by others, but I’m sure you can see my thinking.
rdc1000Back on the RyanAir topic, are they not going bankrupt after being grounded for a week?
As one of Europe’s most (and only) profitable airlines, they have a good stash of money put away. They’re also opposed to any airline getting hand-outs and bail-outs.
rdc1000I read an interesting piece about the reconfiguration which highlighted a couple of technical problems:
1) Where the two toilets are, the cabin has a taper and this is likely to prevent two full sets of (3) seats being fitted;
2) The airconditioning and more importantly, the oxygen systems would need extending further back which would add additional cost;
3) As already discussed the aircraft would need altered exits to meet the requirements for evacuation (for example, the B737-800 already features Type III exits over the wings in place of the original throw out sections on older generation 737s, and this would require some further review).
Finally he points out, that even if these were overcome, Ryanair’s requirements to sell aircraft young would cause a problem by being a non-standard aircraft, which would potentially reduce their resale value, making it unattractive to the Airline.
rdc1000I think you’re all getting carried away with unjustified RYR bashing (oh the boredom :rolleyes:).
As tenthije pointed out, the B738 is only certified for 189 passengers and is unlikely to be recertified for anymore furthermore it is unlikely to pass evacuation trials for more passengers.
As correctly stated, the B739 also has a maximum limit of 189 passengers, unless it is the -ER version which features additional emergency exits, and the latter scheme would be necessary in order to fit more passnegers in, but this would then lead to a requirement for a wider emergency exit row where said exit was placed and therefore you wouldn’t be able to get another row in anyway.
This is what happens when you read the Daily Mail!! :rolleyes:
rdc1000What a shame, the new livery was stunning. It reminds me of the fuss over the Air India livery in the 90’s, they’ve finally found a compromise for livery change of course, but it took a long time (and involved the painting and then repainting of several aircraft).
rdc1000The aircraft could be redirected anywhere, including domestic ops.
rdc1000I think that they went wrong when they said he was asleep. Flying from Liverpool, they should have said that he was out cold due to alcohol and then nobody would have queried it…the airline would have probably carried him onto the plane then too.:diablo:;)
rdc1000Yes I realised that.
rdc1000With passenger flights taking off/landing every 5 minutes at busy times
With so many movements Southend is going to be busier than Stansted!
An example of the bad advice someone has given them and the cloud cuckoo-land they’re living in.
rdc1000I’d put aside any thoughts of huge legally-driven windfalls. The best bet at the negotiation stage would be to suggest that a voucher, exchangeable for a flight, would be acceptable. This has value to you and effectively costs them next to nothing.
Moggy
Or, more likely, they’ll say they won’t bother, and will remove the picture from their site, and then your picture won’t be appreciated by anybody.
As I questioned above, are they likely to be able to fire the comment back at you and demand that you withdraw all images from the internet that you have taken for breach of copyright by posting pictures of the livery they own the rights to?
This all seems a bit petty to me. If I was an amateur, taking pics of planes, then I’d be grateful they’d chosen to use it at all, rather than hoping you’ll make a tidy profit out of it. I’m fairly certain digital images in image libraries sell for a few pence each time someone wants to use them.
rdc1000Just out of interest, are you violating copyright when you post a picture of an airline’s livery on the internet?
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