Vfw614 From Germany, joined Dec 2001, 3759 posts, RR: 5 Posted (7 years 1 month 1 week 1 day 9 hours ago) and read 5311 times:
RYANAIR’S yield manager Jim McMahon has jumped ship to join forces with former colleague Charlie Clifton, an executive at Skybus Airlines, the low-cost start-up that expects to start flying next year, writes Joe Brennan....
CRJ900 From Norway, joined Jun 2004, 2130 posts, RR: 1 Reply 1, posted (7 years 1 month 1 week 1 day 3 hours ago) and read 5158 times:
How successful would a Ryanair-concept be in the US? No seat recline, $2 for a cup of instant coffee plus everything else for purchase-only, 15kg/32lbs max baggage weight, no alternatives if your flight is cancelled etc etc...?
Dispatchguy From United States of America, joined Jan 2006, 1211 posts, RR: 2 Reply 4, posted (7 years 1 month 1 week 1 day 2 hours ago) and read 5085 times:
The startup airline path in the US is tortuosly (sp?) long.
With the new ATOS standard, the path to get manuals alone approved is painful. Thats why consultants to participate in the certification process are extremely well paid.
They'll need a few pilots, probably already well experienced with the A319, and will call them the management pilots - Chief pilots, flight ops trainers, etc., before they start heavily hiring. What they do is to hire a skeleton crew and get the manuals started, and once the first draft of the manuals are blessed by the FAA, then they'll start really hiring to get the manuals completed, etc.
They look for people they call "Initial Cadre", and those folks will be the first pilots, chief flight attendants, lead MOC supervisors, dispatch trainers and supervisors, etc.
Getting in on a startup can mean really long painful workdays, but once the FAA hands you that certificate, it was so worth it.
Kevin777 From Denmark, joined Sep 2006, 1155 posts, RR: 1 Reply 5, posted (7 years 1 month 1 week 1 day 2 hours ago) and read 5060 times:
Quoting CRJ900 (Reply 1): How successful would a Ryanair-concept be in the US? No seat recline, $2 for a cup of instant coffee plus everything else for purchase-only, 15kg/32lbs max baggage weight, no alternatives if your flight is cancelled etc etc...?
As a service concept I don't give the FR-model many chances in the US either - customers here are generally used to higher service levels, also on LCCs and on short-haul, and are willing to pay for it also.
I was also one of those dooming SkyBus in a recent thread, but it seems like they're damn serious here. I'll still see them before I believe them - but there is one market opportunity that I can see for SkyBus. Namely that of the FR-route model; serving small airports and subsidized by the local communities around them. Not just subsidized by tax payers' money, but also by local business etc., heavy sponsoring on their web-page etc.
SkyBus and the local authorities in Columbus are cooperating on this - also on the financing side - and if this can be a model for other US communities, I actually could see a Ryanair in the US. A Ryanair-model would not work in its purest form - IMO people would not be willing to pay the cost for infrequent services to smaller communities a la those served by Ryanair in Europe. However, if the model is subsidized by local communities, it could work.
Why would the local communities support it? Because of the huge economic externalities to society. Despite subsidies and "unfair" airport discounts, one has to give FR credit for giving life to some otherwise sleepy areas of Europe. From Denmark I can mention Esbjerg, a sleepy old fishing community with some industry on the West Coast of the country - FR started flying from STN, and visitor numbers have gone through the roof; hotels, museums, bars, restaurants etc. are really feeling an impact. At the end of the day it keeps jobs and people in the city.
Is it fair? I think it is, when a country has an objective of not having the whole population living in urban areas. But would it work in the U.S.? Doubt it. It is in its very nature anti-free market. Maybe in some N.E. states, maybe California. But not the rest.
"I was waiting for you at DFW, but you must have been in LUV" CPH-GOT-CPH-GOT-CPH-GOT-CPH...
RedFlyer From United States of America, joined Feb 2005, 4214 posts, RR: 30 Reply 7, posted (7 years 1 month 1 week 1 day 1 hour ago) and read 4921 times:
Quoting CRJ900 (Reply 1): How successful would a Ryanair-concept be in the US?
I think there's a chance that the Ryanair concept could be successful here in the U.S. I emphasize "could" because that would only happen if it were another time. Right now, there continues to be an over-capacity in seats, not to mention the fact that there is very stiff competition from the big low-fare carriers (F9, B6, WN, US). I just don't see them surviving very long, if they even get off the ground.
Vfw614 From Germany, joined Dec 2001, 3759 posts, RR: 5 Reply 9, posted (7 years 1 month 1 week 1 day ago) and read 4800 times:
The reason for the short sectors is that Ryanair tries to have each aircraft operating eight sectors each day rather than just six. But recently Ryanair has moved away from that concept as there are only so many destinations that allow this kind of operation. It is not really a dogma, and depending on where Skybus will set up bases, there should be a decent mix of shorter and longer routes almost everywhere.
If Skybus is smart, they will be try not to become a network carrier but remain an operation focused on local bases which sustain themselves (and might only be linked with each other on a route-by-route-basis where it makes sense). The secret will be to keep the whole operation as simple as possible. No overnighting of aircraft at outstations, no complicated network, direct sales, ancillary revenues, generating additional traffic rather than competing with the incumbents, innovative advertising (just look what a marketing icon Ryanair's CEO has become), look cheap to make people believe you are indeed cheap etc. etc.
What is probably new by US standards is that Ryanair earns most of its revenue not through ticket sales, but through ancillary revenues. I would guess that Skybus will try to follow this path.
Kevin777 From Denmark, joined Sep 2006, 1155 posts, RR: 1 Reply 10, posted (7 years 1 month 1 week 1 day ago) and read 4766 times:
Quoting Clickhappy (Reply 6): So, the "Ryanair effect" brings tourists to areas that might not otherwise be seeing them?
Oh yes it does indeed. And it has huge implications for the society. I was at a airline conference in Gothenburg last year, where I heard that when FR stopped flying to some community in Italy, property prices dropped 30 % (!!!). It's not just weekend tourists, also lighter business travel and people who buy property at the destinations. 10-15 years ago you most likely lived in the Malaga area or the Balearic Islands if you had leisure property in Spain - now people are buying property all over. OK, it's not all attributed to FR! But still, it has an impact indeed. Btw, "Ryanair Effect" might be a good word for this, although it has very little to do with the SWA effect!
Quoting Clickhappy (Reply 6): Can a similar thing happen here in the states? Skybus picks a "sleepy" place, lets say Elko Nevada, and all of the sudden people flock there?
I doubt it too! The U.S. doesn't have quite the geography that supports this, let alone that the US is more free-market oriented. But I won't say never-ever.
I'd doom SkyBus anytime, but with all the financing, seemingly professional people etc. I'm beginning to doubt it - with all those apparently wise people backing it with their wallets there must be something to it somewhere.
"I was waiting for you at DFW, but you must have been in LUV" CPH-GOT-CPH-GOT-CPH-GOT-CPH...
EmSeeEye From United States of America, joined Jun 2006, 508 posts, RR: 0 Reply 12, posted (7 years 1 month 1 week 23 hours ago) and read 4711 times:
Quoting Kevin777 (Reply 10): I'd doom SkyBus anytime, but with all the financing, seemingly professional people etc. I'm beginning to doubt it - with all those apparently wise people backing it with their wallets there must be something to it somewhere.
The old saying "a fool and his money will soon depart" takes on a whole new meaning here. Who cares how many people contribute to this train wreck?
Midway2airtran From United States of America, joined Jul 2003, 864 posts, RR: 2 Reply 13, posted (7 years 1 month 1 week 23 hours ago) and read 4679 times:
Just like I said before, I hope the decision makers in the US domestically are taking these guys seriously, unlike what I've seen on here(granted the armchair CEOs). They have something going here and have some potential to run all over the competition as RyanAir and EasyJet have in Europe if the US airlines don't adapt quickly.
If successful, hopefully SkyBus will help increase overall passenger traffic domestically, especially those who wouldn't fly anyway. $10 or even the Free fares (if available on Skybus) should be able to do that while not taking to many of the high price paying passengers away. Afterall, you will get exactly what you pay for.
Kevin777 From Denmark, joined Sep 2006, 1155 posts, RR: 1 Reply 14, posted (7 years 1 month 1 week 23 hours ago) and read 4673 times:
Quoting EmSeeEye (Reply 12): The old saying "a fool and his money will soon depart" takes on a whole new meaning here. Who cares how many people contribute to this train wreck?
eh.... I do!.. If you told me that two lottery millionaires and a an old rock star with a soft spot for airplanes were staring this airline, I'd be DOOMING them all the way to the Mojave desert on a.net!!! But it seems like these people are serious (scary!! yes!!) - but nonetheless it does signal that they must have some aces up their sleeves. Otherwise, why would they do it?
"I was waiting for you at DFW, but you must have been in LUV" CPH-GOT-CPH-GOT-CPH-GOT-CPH...
Wjcandee From United States of America, joined Jun 2000, 4784 posts, RR: 17 Reply 15, posted (7 years 1 month 1 week 22 hours ago) and read 4628 times:
Quoting Kevin777 (Reply 14): they must have some aces up their sleeves. Otherwise, why would they do it?
For the same reason that any obviously-doomed business venture goes forward: Ego and a lack of reality. In very rare cases, one succeeds, and then, as here, everybody points to that lottery-winner-of-a-business as an example of why one should "dream big".
Independence Air was a similar ego-driven, half-baked train wreck that everyone could see happening miles away.
As I said in another thread, this carrier is burdened with a name that connotes discomfort and likely will deliver it. On a mere $100 million startup funding, it's toast before it gets 10 aircraft flying.
Mariner From New Zealand, joined Nov 2001, 23876 posts, RR: 87 Reply 16, posted (7 years 1 month 1 week 22 hours ago) and read 4599 times:
Quoting Wjcandee (Reply 15): For the same reason that any obviously-doomed business venture goes forward: Ego and a lack of reality.
Since at least two of their executives are from Ryanair, I'd suggest that (a) ego is not the issue and (b) there is no lack of reality.
That yield manager can clearly get blood from a stone.
They have also persuaded investors to come up with $100 million, the City of Columbus to part with $41 million, and convinced Airbus they have the backing to order 65 aircraft.
Example - if it is the Ryanair model and if one of their first routes were to Las Vegas, not to LAS but to one of the "near" Las Vegas airports, they would probably have a cost advantage over every other airline flying into that town.
Example: Allegiant is obviously doing well in Florida, but they don't bother themselves with MCO - instead they are "near" MCO. If they can make money, why not someone else?
Now - okay, Skybus may be doomed. The pure Ryanair model may not work here. But even if they are only around for a while, they can do an awful lot of damage to others.
VV701 From United Kingdom, joined Aug 2005, 7039 posts, RR: 17 Reply 17, posted (7 years 1 month 1 week 22 hours ago) and read 4579 times:
The US domestic airline business is the classic hub and spoke operation. With the USA being geographically so much bigger than Europe, this makes sense. Climb aboard the American Eagle, Continental Connection, Delta Connection, Northwest Airlink or whatever, fly to their hub, transfer to their main line flight and, if necessary get back on the American Eagle or whatever commuter plane to finish your journey. All with the choice of several flights a day.
Along comes an equivalent of Ryanair, perhaps called SkyBus. It offers a service not three or four times a day but three or four times a week. It offers a single direct flight. It offers significantly lower prices and absolutely no frills.
Why would Americans stick with the old system? Because they liked spending the best part of a day instead of a couple of hours getting from A to B? Because they must travel on the day and at the time of day they and not the airline chooses? Because they are wealthy and don't mind paying two or three times the new airlines fares? Because they insist on having an airline seat that reclines, a window with a usable blind and a 'free' cup of coffee on each flight they take? Or, perhaps, all or, dare I say, even none of the above? Of course the FR model was never, ever going to work in Europe and some of us thought they were mad to order 100+ 738s.
At least if SkyBus do operate an FR type of model it will be more than interesting.
Wjcandee From United States of America, joined Jun 2000, 4784 posts, RR: 17 Reply 19, posted (7 years 1 month 1 week 22 hours ago) and read 4543 times:
Quoting Mariner (Reply 16): if one of their first routes were to Las Vegas, not to LAS but to one of the "near" Las Vegas airports, they would probably have a cost advantage over every other airline flying into that town.
Respectfully, Mariner: Maybe a landing-fee and terminal rent cost saving. However... No significant fuel cost advantage over an LCC. No significant labor cost advantage over an LCC. Insurance cost per airframe-hour probably significantly higher than an established LCC like Airtran and certainly than a major like DL. No capital cost per-airframe-hour advantage over an established LCC, no matter how significantly they strip down the interior to save money and/or weight.
Quoting Mariner (Reply 16): Since at least two of their executives are from Ryanair, I'd suggest that (a) ego is not the issue and (b) there is no lack of reality.
As to ego, I would say that *only* ego would cause a person to quit an established, successful carrier for the dream of owning one's own. As to lack of reality, how successful/realistic was the Heartland Airlines thingy that some of these guys used to be involved with?
Vfw614 From Germany, joined Dec 2001, 3759 posts, RR: 5 Reply 20, posted (7 years 1 month 1 week 22 hours ago) and read 4525 times:
Just picked up some info on another board that in addition to Ryanair's Head of Scheduling and Ryanair's former Director of Ground Operations and In-Flight, two top brass from Ryanair's Ops and one from Engineering will join Skybus in November and December.
Why would people in top positions at Ryanair leave their company to join such a laughable outfit as many here regard Skybus ?
The problem many of the fellow a.netters from the US seem to have is that they see Ryanair and thus Skybus as something like just another Southwest or Airtran. It is not. Arguments like "how will they save money compared to DL, WN etc." demonstrate that it is worth looking at how Ryanair saves money and in fact EARNS money.
It remains to be seen if it will work out in the end, but Skybus seems to be one serious start-up with a concept that has not been tried in the US so far.
RedFlyer From United States of America, joined Feb 2005, 4214 posts, RR: 30 Reply 21, posted (7 years 1 month 1 week 22 hours ago) and read 4525 times:
Quoting VV701 (Reply 17): Along comes an equivalent of Ryanair, perhaps called SkyBus. It offers a service not three or four times a day but three or four times a week. It offers a single direct flight. It offers significantly lower prices and absolutely no frills.
I don't get it, what's the advantage here? You realize B6, WN, US and F9 already do that, right? I would also say that service 3 - 4 times a week is a major disadvantage, not an advantage.
Unless Skybus' costs are significanly lower, I don't think they are going to have much of an advantage. The Ryan model only goes so far if you don't offer considerably better (lower) ticket prices for your customers.
That's a start. And if they could persuade a "near" Vegas airport to give 'em some financial breaks, as Ryanair does at a lot of airports and as the City of Columbus has for Skybus, then that's a second step.
As to your other points - fuel is much the same for everyone, maybe they are canny and can hedge well, they have the money. Or, of course, maybe not. A lot of airlines lost money on hedging last quarter.
Bu they do. JetBlue has a cost advantage because of the relative "youth" of their staff. Skybus will all be new hires - they won't have a "mature" wages bill.
Quoting Wjcandee (Reply 19): Insurance cost per airframe-hour probably significantly higher than an established LCC like Airtran and certainly than a major like DL.
Um - I'd need to see figures. With the kind of fleet size we are talking about, they can probably get a good package. And in any case, if their costs are similar to Airtran, that's no bad thing.
Quoting Wjcandee (Reply 19): No capital cost per-airframe-hour advantage over an established LCC, no matter how significantly they strip down the interior to save money and/or weight.
They'll have an advantage over (again) JetBlue - they are supposedly putting as many seats in the A319 as JetBlue does in the A320. It may not be much - it may be a wash - but it is something.
Easyjet went for bulk capacity in the A319 and not a similar capacity in the A320.
Quoting Wjcandee (Reply 19): As to ego, I would say that *only* ego would cause a person to quit an established, successful carrier for the dream of owning one's own.
But the yield manager, which is the critical hire, doesn't "own his own". And clearly, he can get blood from a stone.
Quoting Wjcandee (Reply 19): As to lack of reality, how successful/realistic was the Heartland Airlines thingy that some of these guys used to be involved with?
Adversity is often a great test of mettle. if they have learned nothing from the Heartland experience, then yes, they are unrealistic. If they have learned, and have changed their philosophy, then hey, that's good.
Southwest has changed their strategy, and Wall Street hates it. Hates it. Will Southwest temper their new aggression?
Look at Frontier and their first failed LAX focus city experiment. But they learned from that mistake, and look how differently they are doing it this time.
As I say, you may be right, it may fail - the important thing is the damage they can do to others along the way.
CYatUK From United Kingdom, joined Apr 2006, 809 posts, RR: 0 Reply 24, posted (7 years 1 month 1 week 21 hours ago) and read 4465 times:
Quoting Vfw614 (Reply 20): Why would people in top positions at Ryanair leave their company to join such a laughable outfit as many here regard Skybus ?
I do not understand why people think this is laughable. No company (or should I say professional company) take decisions without consulting teams of experienced people who have possibly done the job before and have the "Know how".
In this case I would assume that Skybus have conducted market surveys and used other market data to find out that indeed there is a market in need for a new low cost carrier out there.
I can see that many people on this forum think that setting up this company is a bad idea with no future but it seems that professionals (ref: Ryanair) think otherwise.
25 EmSeeEye: And just what "aces" do they have tucked? This sounds like a mix between Allegiant and Ryanair but... each of these already solid airlines has thier
26 Vfw614: Ryanair takes two different approaches when developing markets: 1. Open up unserved markets with nonstop flights, preferably by using airports not ser
27 RedFlyer: Hi Vfw614: you provide good analysis, but what I still don't understand is how has Skybus differentiated itself from other established low-fare carri
28 Galapagapop: Should be interesting as this should be a very serious operation if coming from tons of FR execs, but i still say it will be with challenge, not to me
29 VV701: LON was not under served with LHR and LGW. Yet FR made STN one of its largest bases. But there is a difference and the is the relative sizes of the c
30 727200er: I still say the biggest sticking point will be a lack of comfort. I agree that some of the model stands a chance here. Startup capital isn't bad, it i
31 Wjcandee: Well, I like to look at the figures provided to AMC (US Air Force, Air Mobility Command) under the old CAB rate-making model which the AMC uses to de
32 Ikramerica: Are all these RyanAir execs USA citizens? If not, how is SkyBus going to avoid the same problem VA is having, that of non-citizen control of the airli
33 Mariner: I'm still not sure what your point is. Delta pays lower insurance? I would imagine. I would guess Southwest gets cheaper insurance, if only because o
34 RedFlyer: At 5,000 feet for the longest runway, might be a little on the short side for unrestricted A319 ops. http://www.airnav.com/airport/KVGT
35 RedFlyer: " target=_blank>http://www.airnav.com/airport/KVGT Forgot that the runways are also only 75 feet wide...seems a little too narrow for mainline aircraf
36 Philb: One thing all you wiseacres in the US forget - and thus make the same mistake as many of the European doomsayers made about Ryanair - is that an LCC s
37 Kevin777: LOOK guys, I cannot say that I'm not surprised by a new player opting for 65 a/c. Standing alone, the idea seems like another airline business disast
38 RedFlyer: The difference is, Ryanair was on the leading edge of the LCC market when it was developing in Europe. Skybus is coming to the party a little late an
39 Philb: RedFlyer, Just showing my age! I, of course, meant Trailways Transportation - Continental Trailways was bought from them by Greyhound in the late 1980
40 Vfw614: Given the size of the U.S. market, there certainly is enough space left for innovative airline concepts. Most of you have a very traditional view on a
41 Ikramerica: I'd like to see a list of commercial airports in the USA that can handle a A319 loaded with enough fuel to fly 1000 miles that doesn't have commercia
42 Kevin777: Neither would I call them LCCs - nothing wrong with that btw. True, but this also goes for LCCs in general - the "SWA-effect" is getting people onboa
43 RedFlyer: I must be missing something because this comment has been repeated often but I still do not understand what the Ryanair model has to do with a market
44 Shenzhen: Start the airline, pick the low hanging fruit with the first 10 or so airplanes, float the company, all become multi-millionaires, low fruit gone, lar
45 Mariner: No, perhaps not. But Frontier does serve three nations. mariner
46 Kevin777: No, absolutely true - but not knowing the business model (none of us do, except from the SkyBus exec lurking around in this thread... ) I'm just goin
47 Philb: I'll bet you sectors of far less than 1,000 miles will be well within the Skybus target market. No-one but people living in Charleroi wanted to fly t
48 RedFlyer: My sincere apologies. Obviously, you do know the topic! So you're saying their business model is based upon untapped markets. And I think I understoo
49 Jacobin777: That is what basically happens. ...you forgot to add..."earnings restatements" after a few years... Cheers..
50 Vfw614: Ryanair is able to fill 189seat planes on routes between cities most will have difficulties finding on a European map. If the price is right and marke
51 Philb: How many airlines in the US offer a flight for 1 cent plus tax and charges? OK, we all know that the total cost could come to $50, in European terms I
52 Ikramerica: None of those are in the USA. We get why Ryanair and others worked in the EU. But when we ask for examples of where they can do the same thing in the
53 Kevin777: The ULCC model is based even more on volume than the (US) LCC model - going RJ wouldn't give enough volume IMO. If you give away the first 20 seats o
54 Midway2airtran: Well said. If decision makers think the same perspective, we'll see a repeat of RyanAir in the US. If ignorance is this high all around, dam'n, I sho
55 Kevin777: Absolutely true, just because FR works in Europe it doesn't mean it would work in the U.S. - but it doesn't mean that it wouldn't either. Okay, you d
56 Philb: You mean like DL, AA, CO, US and their affiliates mop up the bulk of the US market and destinations and have stamped out competition by taking over t
57 Mariner: Because that is pretty much all we have to go on - Skybus has not yet, to my knowledge, shown their hand, their business model. If it is the Ryanair
58 Philb: There were plenty of Brits and Germans buying homes in Spain well before the 1990s. The 1992 opening of the remaining trade barriers didn't make that
59 BAW716: Time for me to throw my two cents into this... OK, let's see: a) I basically agree with Mariner. b) PhilB and Vfw615 also make excellent arguments. I
60 Philb: Some points. All but the first 26 of Ryanair's 737s have leather seats. Seat pitch is 30"".
61 Mariner: Um - sorry, I was there, I have a British passport, I did it. And I know that for myself and several members of my family, getting property in Spain
62 Philb: Agreed it was, but more because the French and Spanish got their act together than anything to do with the 1992 relaxations. I too was there, living i
63 Mariner: For whatever reason, the effect was the same. We lived in Spain in the late eighties, and just getting stuff into the country was a bureaucratic nigh
64 Philb: Where there might be a second home or retirement market in the US is around Phoenix and other parts of AZ. Where Florida still has massive growth Ariz
65 Wjcandee: Interesting post. What is most interesting to me is that everyone is assuming: (1) That SkyBus can operate at materially-lower costs than established
66 Mariner: Yes, I think that is true. And I think the impending retirement of the baby-boomers is going to change a lot of the dynamic. They'll go where (a) win
67 Luv2fly: True though those type of markets are already served here in the USA! Again a dime short and a day late to the party.
68 Steeler83: That is a bit of a genius approach. Flying to smaller airports that are miles away from the larger cities but provide direct rail/bus or taxi service
69 Luv2fly: I mean look at how many cities that G4 has opened up this year and last. The tree and all the low hanging fruit has been picked and picked clean.
70 ContnlEliteCMH: It's not genius at all. If you pick 100 American cities, you won't even need the fingers on your hands to count the number of them that have easy tra
71 FATFlyer: Southwest serves 63 cities but the others are similiar in size in terms of destinations. I may be off 1 or 2 here but roughly: Frontier serves 57 cit
72 BAW716: Steeler83, The difference between the "Ryanair" model and the "Southwest" model is the very point I made about where the airline flies relative to the
73 BCAL: I wonder if David Bonderman and the Texas Pacific Group are really behind Skybus? Bonderman is a principal investor in FR and also Chairman of the Bo
74 Philb: If that's the case then there are a lot of airline execs (not to mention people here) about to see something very new in US airline operation.
75 Pe@rson: Quite funny, is it not, that FR is very rarely the first airline to begin such things. Indeed, BE began the concept of paying for checked-in luggage
76 Vfw614: Well, Ryanair operates the same equipment as dozens of other European LCCs that burns the same the same fuel that everyone else burns that requires t