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Hard Times Ahead For European LCC...  
User currently offlineGilesdavies From United Kingdom, joined Dec 2003, 3014 posts, RR: 2
Posted (6 years 6 months 4 weeks 1 day 22 hours ago) and read 1807 times:

Ryanair have today announced their latest set of results, and the news is not looking good for the LCC sector. Especially when the biggest carrier of them all, paints a gloomy picture...

They have announced profits being down 27% compared on the same quarter as last year at EUR 35bln. Also passenger numbers for January were down to 69% load factors, which is significantly lower than you would expect FR to be flying...

They have also painted a gloomy picture about future growth and profits...

I think easyJet will also be in a similar situation, last month they were selling tickets across Europe for £10 including tax, easyJet does not usually offer fares this cheap and has a slightly different model to Ryanair. Also they are selling similarly priced tickets for February, March and April, which is obviously a sign of stimulating growth. I took advantage of these flights last month, and on 5 of the 6 flights they were less than half full...

For February alone, easyJet has cancelled 150 flights from their LTN base, and passengers accomodated on other fligths. I can expect similar action has been taken at there other bases too...

LCC are reliant upon filling up their aircrafts to make money, with the way the economy is going it looks like they maybe in for a bumby ride...

http://news.bbc.co.uk/1/hi/business/7225681.stm
http://www.ryanair.com/site/EN/news....r=08&month=feb&story=reg-en-040208

3 replies: All unread, jump to last
 
User currently offlineVasu From United Kingdom, joined Apr 2005, 3900 posts, RR: 0
Reply 1, posted (6 years 6 months 4 weeks 1 day 19 hours ago) and read 1664 times:

Only a thought...

but maybe its something to do with the stupidly high taxes on flights from the UK? Even with cheaper actual airfares, the cost of flying is going up...


User currently offlineSevenair From United Kingdom, joined Feb 2001, 1728 posts, RR: 0
Reply 2, posted (6 years 6 months 4 weeks 1 day 18 hours ago) and read 1615 times:

This is the third Winter in a row MOL has said their is going to be a 'bloodbath' - as he was calling it last year and the year before. This year, it's a 'Perfect Storm' and this time It's actually happening (well, it's apparent from FR's figures that things are not as great as they once were), but two years after he predicted.

Last year the rediculous govt. tax on all flights from the UK, coupled with doubling of charges as STN, plus large fee rises in DUB, then things are bound to get tough. Especially when this is your two largest bases. And the UK is a massive market for FR. Having to pay £10 per departure from the UK, or £20 return for a domestiv flight, means that ticket prices are quite high, before you add the fare, taxes, fees and charges.

I've heard it said that FR has done everything possible to reduce costs, and now have the lowest cost base in Europe. All of the outside factors could begin to pinch FR - as it cannot do anything about them, and it cannot further reduce costs.

I for one, check FR daily (I know I should get a life!) - and I've noticed that the two most recent sales have been extended at least once - so it seems they are really trying to get bums on their Pleather seats. The sales have also been extended for quite a few days after the original close. Extended sales are nothing new, but two big sales, back to back, coupled with big extentions may suggest they are pushing to get any many bookings as possible.

I do believe that FR can come out of this stronger - as unforunately some carriers may not make it though, meaning FR can move in - and expand.


User currently offlineEZYAirbus From United Kingdom, joined Sep 2003, 2460 posts, RR: 52
Reply 3, posted (6 years 6 months 4 weeks 1 day 11 hours ago) and read 1469 times:



Quoting Gilesdavies (Thread starter):
For February alone, easyJet has cancelled 150 flights from their LTN base

179 flights mate, its down to crew shortages!

Glenn



http://www.glenneldridgeaviation.com
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