rdc1000* Firstly, the airline is very cyclic. Right now, it is going through a period of slow growth, but with a downward trend on service. Growth has finally come as customers get used to the post-9/11 issues and a recession, whilst the downward service trend has come as a result of the low-fare carriers and the need for airlines to fight the post-9/11 reduction in passengers and recession. We are now arriving at a point where the legacy carriers are getting closer to the low-fares, and once that equalisation is largely complete service levels from some carriers will inevitably start to slowly creap up again – the potential for growth in “traditional” airline cities is NOT limitless and airlines will ulteimately start to differentiate themselves again to win business. It will take some time, but I expect it will start to happen early in the next decade, as by then I expect the legacy carriers will be largely profitable again. We will never go back to the days when air travel was seen as a luxury, but we will move away from the idea that its just like getting on a bus to an extent, because it will become more expensive to travel.
I can’t really disagree with anything you’ve said here Andy, I just couldn’t be bothered to write an essay like that! To this point I would add the fact that the low cost carriers will start to suffer from increased costs. People believe that there are Scales of Economies in the industry, but unfortunately these are accompanied by a growth in inefficiencies in many respects, as airliens gain ‘excess baggage’ and have no choice but to pay for it. This is basically what happened with many legacy carriers (or incumbents as I would refer to them, i.e. not the new start ups in the industry).
I did my University Dissertation on ‘Contestability of the Airline Market’, and many of the issues in this post were important to the topic. Understanding the entry of airlines to the market is very interesting
rdc1000more and more airlines realise that lower fares are probably more important now than in the past – just look at how Easyjet / Ryanair to name 2 have expanded over the last 5 years. Also there is a trend in the more traditional airlines to go with a low cost option – BMI and Aer Lingus for example.
There are a number of reasons why airlines such as Easyjet/Ryanair have expanded fast in the last 5 years, it is not a case of simply providing low fares, it is a case of being able to compete. In order for these airlines to compete a number of factors have had to take place, including (as a short list of examples, there a several more):
1. Growth of internet usage, allowing a lower cost distribution channel
2. Growth of air transport to sustain use of secondary airports, allowing reduced fees, and more importantly unlimited access.
3. Reduction by major airliens in the use of Frequent Flyer programmes to retain loyalty.
You mention airlines thinking low fares are more important than in the past, the truth is the airlines were not previously able to offer them as low as they do now.
Flights to the USA can go from 4 uk cities other than London.
Correction, make that 5, you may have forgotten BRS. (MAN, BHX, BRS, GLA, EDI)
there is no direct replacement for the 747 other than the 787 which as yet still a ‘paper
The 787 is not a replacement for the 747 by any means, it’s capacity is roughly similar to the 767 models (depending on variant). Indeed it is Boeing’s direct replacement for the 767. Furthermore the aircraft has been officially launched and parts are now being constructed, therefore to say it is a ‘paper aeroplane’ is a little inaccurate.
rdc1000OK, how could I NOT burst in here??… :dev2:
Well it is my opinion that as far as commercial travel is concerned point-point is here to stay..i mean do we really want to travel to a major hub and then load up on a chitaqua type setup to flyoff to yur home destination or would u rather just fly point to point on a 787,a350,777 type aircraft directly to an airport close by..The chances of that happening are much more likely then that of a a380 or 747adv flying to many hubs throughout the world..
There will always be an element of hubbing and spoking, it is derived from the fact that many airports will not be able to sustain and support individual routes. This will be most prominent in Long Haul operations, thus creating a role for the A380 on certain major hub to hub routes, such as Singapore to London. If you think that the 767/787/777 are all good examples of point to point aircraft then I think I would recommend you check out the long haul aircraft of choice for the US carriers. These airlines use these good examples of point to point aircraft to feed into the world’s largest hub airports…logic?? So Delta has a few 777s, but mainly uses 767-300s for long haul routes, and this is from the worlds number 1 hub airport! What these aircraft allow is a higher frequency (see also United 767s/777s from Chicago/Washington to Europe incl LHR, American 777s/767s from Chicago, Dallas/Fort Worth and Miami, Continental 767s/777s from Houston and Newark). What you may be seeing though is the linking of NEW regional destinations to hubs over the long haul network using smaller capacity aircraft, that is the difference. So instead of travelling via two hubs it will be possible to travel via one hub. Or instead of travelling by car to a major airport you can now travel to your regional airport then hub through a long haul hub.
You are right though to some extent, air transport has grown at a rapid rate, and will continue to do as. As such we will see a number of new routes become viable allowing passengers to by-pass hubs. But demand for long haul travel is far less than short haul and so there will always be an element of hubbing.
On the topic of the A380, here are two points to consider. With air transport growing at the rate it is then the A380 will have a role supporting point to point demand between sevarl city pairs. Furthermore the A380 will offer the capacity (and therefore seat-mile costs) to potentially attract long haul Low Cost operators into the marketplace, thereby creating a role for itself on point to point servcies which use low fares to stimulate the market, thereby creating the ability to connect two new points!
Where point to point will really grow is on short haul services, where the use of low fares can stimulate the market for ‘weekend breaks’ and spontaneous visits to family and friends. Again the rate of growth will allow far more point to point services.
The structure of hubs is also changing, airlines are ‘de-peaking’, offering lower costs and putting less pressure on their schedules and facilities. By reducing the peak of flights airlines (particularly in America where airlines tend to rent gate space) can cut costs, but this means that higher frequencies with lower capacity aircraft is more the order of the day than high capacity. So this transposes to more regiional jets and 787/A350s.
I want to clarify, I am NOT against the logic that there will be a major increase in point to point flying, I agree that there will be. BUT, I do want to stress that I think there will be a continuing role for hubs for a long time.
rdc1000Well they don’t appear to have changed locations for quite a long time, so if they have moved then it must have been a few years ago.
rdc1000Well they don’t appear to have changed locations for quite a long time, so if they have moved then it must have been a few years ago.
rdc1000I know the articles that were posted regarding the Indigo order said 100 ‘commitments’, but did we ever get official confirmation that the order was indeed 100 “firm orders” and not more like “orders including options”… :confused:
I don’t exactly know the answer to this, and had to read it twice myself to be sure! It wouldn’t be the first time this has happened though. JetBlue ordered a huge fleet of brand new Airbus’ to launch their services.
rdc1000Loosing track of Paris Airbus orders…
Having been out of the office yesterday and par tof today it is safe to say I have come in and found a heap of orders for Airbus announced at Paris. Today there is an order for 100 A320 family from IndiGo, a new Indian airline and now TAM have commited to more A320s and the A350..here are the news articles..
PARIS 2005: India’s IndiGo orders 100 A320 family aircraft
Leithen Francis, Singapore (16Jun05, 12:13 GMT, 207 words)Indian IT firm InterGlobe Enterprises is to establish an airline called IndiGo and has made a firm commitment for 100 Airbus narrowbodies for the carrier to use on domestic routes in India.
Airbus today announced at the Paris Air Show that InterGlobe is ordering 100 firm A320 family aircraft and will launch a nationwide low-cost airline venture, IndiGo. The statement does not specify which A320 family models the airline plans to take nor when deliveries will start.
It says InterGlobe and former US Airways chief executive officer Rakesh Gangwal are behind the new airline that aims to capitalise on the growth in India’s aviation market.
InterGlobe managing director Rahul Bhatia says in the statement: “The aviation industry in India is on the threshold of the next big revolution and IndiGo is ideally positioned to fill the fast emerging need for reliable, efficient and economical air travel.
Delhi-based InterGlobe was established in 1989 and has a technology division that supplies airlines with software products and IT consulting services. It also has a division that provides passenger sales, cargo sales, route management and marketing services to airlines.
InterGlobe told ATI in March it was considering establishing a domestic airline in India and had already started talking to aircraft manufacturers.
Source: Air Transport Intelligence news
PARIS 2005: TAM orders 20 A320s, commits to A350s
Paris (16Jun05, 15:18 GMT, 132 words)Brazilian airline TAM has become the latest carrier to commit to the Airbus A350 after announcing a memorandum of understanding for eight A350-900s and options on seven more.
As part of a combined commitment announced today at the Paris Air Show, the carrier has also signed a purchase agreement for 20 more A320 family aircraft, including A319, A320 and A321 types. It has also taken options on 20 more from the family.
Deliveries of the A350 – which is set for formal industrial launch in September – are scheduled to begin to TAM at the end of 2012.
First deliveries of the fresh batch of TAM A320 family aircraft will begin in late 2007 and run to 2010.
TAM already operates a fleet of 56 Airbus aircraft including A319, A320 and A330-200 models.
Source: Air Transport Intelligence news
rdc1000Unfortunately you have to join, but once inside th information on airliens and their fleets is highly detailed.
rdc1000Mine is soft as a lamb too, of course that excludes the fact that he is used to partake in what is widely regarded as one of the most dangerous sports going (Eventing). Add to that my partner has a lovely (permenant) hoof print scare between arm and shoulder as a reminder that occasionally he lashes out, but in his defence he was excited, not naughty (the horse I mean!).
rdc1000Mine is soft as a lamb too, of course that excludes the fact that he is used to partake in what is widely regarded as one of the most dangerous sports going (Eventing). Add to that my partner has a lovely (permenant) hoof print scare between arm and shoulder as a reminder that occasionally he lashes out, but in his defence he was excited, not naughty (the horse I mean!).
rdc1000yes good, but what is the weight of RR in civil aviation
not so much, burp
What is your source for that graph, and what is it showing orders, or aircraft operating with given engines makes?
rdc1000Whoa…..lighten up a bit, rdc! This isn’t an industry forum – most of us here are “outsiders”.
I’m sorry, I just get a bit passionate about certain things. I’ll take a chill pill 😎
rdc1000Personally I would say that there are other destinations in Europe that could be more lucrative for a ME airline (not necessarily Qatar. Etihad, Emirates etc can do so too). For instance, AMS lacks a pax fligt from any ME airline. KLM has that market pretty much cornered. Only a fey freight services from Emirates and Qatar. In the past Jordanian and Kuwait used to fly here but they gave up.
AGAIN you’ve missed the point. You need to consider the availability of direct flights. DUS and MAN are good points to feed from because they have a relatively low number of long haul direct services. AMS on the other hand has loads of good quality direct services. KLM may have the AMS – ME market sewn up, but there is a good chance that there isn’t room for lots of airlines between these two points offering point to point traffic. And Emirates/Qatar are not likely to get too excited about routes from there because passengers are more likely to fly to Bangkok, Hong Kong, Singapore, Tokyo and a host of other destinations direct. I know these airlines operate into London, from where passengers can also do the same. But they do so because they use London as a point to offer transfer traffic to US services. Furthermore there is stronger demand between the ME and UK than most other points in Europe. Finally, there is a ‘shortage’ (I use inverted commas cos obviously the flights are not all full but there would be a lack of capacity at the right price were it not for these airlines taking passengers to their hubs from here) of reasonably priced seats to points all over the world from London.
If you actually look where ME hubs carriers tend to be growing their operations it is to/from regional airports, not the majors (again..they do operate from major airports I admit, but are growing their regional services). So in the UK, Emirates serves GLA, MAN, BHX. They also serve NCE in France, and DUS in Germany, all airports with otherwise relatively poor connections to Asia (Direct anyway). I work in aviation, including passenger forecasting for airlines/airports and believe that DUS offers great potential for ME carriers offering connections through their hubs.
As for Gulf Air, it’s operations have changed heavily since stakes have been sold and interest lost by certain parts of the Emirates. The airline remains the sole airline for Bahrain, a relatively strong destination in it’s own right. Furthermore the carrier has a different business strategy to Emirates and Qatar…they have not yet placed significant airliner orders either, choosing instead to strengthen their current business model.
rdc1000I do not know what the current routes are for Qatar. But I know that DUS is not one of them. You did list it though, what makes you think Qatar can fill a flight? Let alone two daily flights to DUS? Emirates is already very active on the route and growing hard (they often upgrade to 343). Would Qatar be able to take part of the market?
Same goes for all the middle eastern airlines really. Emirates, Qatar, Etihad, Gulf Air… they are all large airlines with very ambitious expansion plans. One or two of them will probably collapse since I doubt the demand will be there for all four of them (not even counting smaller airlines like Oman Air).
Gulf Air is co-owned by the various Emirates and will in the long term almost certainly cease to be a mayor player. Maybe even cease full stop. After all, why should individual Emirates keep this “SAS-like” airline when they each got a mayor of their own.
I do not think a collapse of Gulf Air alone will be enough though. Another airline may have to go too.
I never implied the need for any airline to go bust. And I quoted DUS as an example of the kind of destinations that these airlines feed from, so therefore likely possibilities. The airline market is much more contestable than it used to be and indeed I do believe Qatar could enter this market. There are good prime examples of markets similar to DUS which support such services. Take MAN for example, it has 2 Emirates services daily and (when I last looked) 4 flights per week by Qatar, but I am not fooled, I believe that it is capacity shortage which holds Qatar back from expanding at MAN.
You seem to have missed a little of the point with your comment about the 4 carriers in the area taking market share. A lot of the business of Emirates and Qatar is not even to their home nation or the regional market, it is long haul, from one continent to another via their home nation. As it happens Gulf Air has now started turning in a profit, so you’ll be stuck if you expect that one to go bust too soon.
Typically air travel is growing at a rate of around 5% per annum, by 2020 the number of passengers travelling will have DOUBLED, therefore if you’re not sure whether airports can sustain airlines such as Qatar and Emirates then look at what each airport has now from these carriers and AT LEAST double it (long haul routes are growing very fast). Remember these planes will not be delivered tomorrow and have to be put onto routes, they will be delivered through to 2015, by which time air travel will be nearing that doubling.
Your comments have concerned me about people’s understanding of air transport :confused:
rdc1000Thinking about it let me put it into perspective a bit….assume 1 aircraft will be used for every daily flight into Europe..if Qatar provide the following services to feed their hub then you can see it won’t take long to use all of their A350s…
Munich – Twice daily (ie 2 aircraft)
Dusseldorf – Twice Daily
Geneva – Daily (ie 1 aircraft)
Lyon – Daily
Nice – Daily
Brussels – Twice Daily
BHX – Daily
MAN – Twice Daily
Barcelona – Twice Daily
Madrid – Twice Daily
Stuttgart – Twice Daily
Berlin – Twice Daily
OK, so even with that relatively short list I have used 20 aircraft, and non of those would seem totally unviable for their strategy. So assuming that another 20 aircraft then need to be flying to Asia to compliment these then thats 40 aircraft. So add a few more routes and 80 aircraft can easily be swallowed in the schedule. Also take into account reserve aircraft and those in maintenance.
Sign In
