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Pilots To CY: Right Time To Expand In Greece Now  
User currently offlineCYatUK From United Kingdom, joined Apr 2006, 810 posts, RR: 0
Posted (5 years 9 months 3 weeks 5 days 9 hours ago) and read 2550 times:

Cyprus Airways pilots have posts in the major Cypriot newspapers today, proposing expansion of CY in Greece.

Their main arguments are:

1) OA shrinking - this is a good time for a new player

2) Success of the LCA-SKG-CDG route with very good ratings on th SKG-CDG leg

3) ECA/CY successfully used Heraklion airport as a base for flights to Rhodes and some European destinations

4) This is the only way for CY to expand given the restrictive size of Cypriot market. An example is given here about the islands two major banks which have successfully expanded in Greece and managed to be the third and fourth biggest in the country.

5) Up to date the survival of CY was based on cost cutting. Now its time to increase income and profits.

Any comments welcome.


CY@Uk
11 replies: All unread, jump to last
 
User currently offlineLAXintl From United States of America, joined May 2000, 24869 posts, RR: 46
Reply 1, posted (5 years 9 months 3 weeks 5 days 9 hours ago) and read 2530 times:

Can we say Hellas Jet.

Too bad the network and name recognition CY previously build is gone.



From the desert to the sea, to all of Southern California
User currently offlineCYatUK From United Kingdom, joined Apr 2006, 810 posts, RR: 0
Reply 2, posted (5 years 9 months 3 weeks 5 days 8 hours ago) and read 2496 times:



Quoting LAXintl (Reply 1):
Can we say Hellas Jet.

I thought of exactly the same thing. However, its quite surprising that at that time CY pilots objected to the creation of Hellas Jet and at times they used to threaten CY management with strikes arguing that CY should be establishing themselves in Greece under the CY name rather than setting up a subsidiary.

Also, soon after the creation of Hellas Jet, there was a change in Cypriot Government that resulted in a change in CY management who eventually sold it to recover from the financial crisis that CY were facing during 2004.

Hellas Jet was doing well but the long awaited expansion never happened due to political reasons. This was another reason for selling it to Air Miles.

I am not sure if CY could do well in Greece, but there are a number of routes which could be profitable especially those which could attract passengers from Cyprus connecting at ATH (e.g. Madrid or Barcelona where there is possibly no business case for direct flights from LCA but could do very well via ATH).

Another possibility (I am possibly going over the top here) is a LCA-ATH-JFK service using A332. The market is there and if A3 is not willing to fly longhaul, it could be a good opportunity for CY to do it.



CY@Uk
User currently offlineOlympicATH From United Kingdom, joined Jul 2001, 292 posts, RR: 0
Reply 3, posted (5 years 9 months 3 weeks 5 days 8 hours ago) and read 2454 times:



Quoting CYatUK (Thread starter):
1) OA shrinking - this is a good time for a new player

Am I the only one who thinks it is precisely a BAD time right now? The privatization process is under way and nobody really knows what OA will be like in a few months from now. Maybe it will close down but maybe the privatization will be successful and the new airline (taken over by Qatar for example) could start expanding again. This total uncertainty isn't exactly the right climate to start a new venture.

Besides, with its flights to STN (up to 3 daily for the winter season) and CDG (starting in november, 1 daily and then 2 for the summer), Aegean has pretty much filled the gap. The only "major" destinations which could maybe use some competition are MAD (1 daily OA but Iberia now flies up to 3 daily flights in the summer), BRU (OA has 2 daily, which IMHO is enough) and maybe AMS (1 daily OA, up to 3 KL). If OA couldn't make destinations such as BCN, ZRH or CPH work, I doubt CY could.

And of course, there was the Hellas Jet debacle. We all know how that ended...


User currently offlineCYatUK From United Kingdom, joined Apr 2006, 810 posts, RR: 0
Reply 4, posted (5 years 9 months 3 weeks 5 days 6 hours ago) and read 2401 times:



Quoting OlympicATH (Reply 3):
And of course, there was the Hellas Jet debacle. We all know how that ended...

That's exactly my thought and as I mentioned above, I can't understand what is the difference between a CY subsidiary or CY themselves expanding in Greece. If CY pilots wanted to support such expansion why did the fight so hard to force CY sell Hellas Jet?



CY@Uk
User currently offlineLAXintl From United States of America, joined May 2000, 24869 posts, RR: 46
Reply 5, posted (5 years 9 months 3 weeks 5 days 3 hours ago) and read 2313 times:



Quoting OlympicATH (Reply 3):
Am I the only one who thinks it is precisely a BAD time right now?

Well I guess you dont run a business do you?

This is an excellent time to do something for the precise reasons that the future of Olympic is in the air. They might cut back even further, disappear or whatever which only opens up more opportunities.

Bottom line with adversity there is opportunity waiting, just some one needs to act and maybe A3, CY and now Ryanair with starting Greece flights are the ones to do it.

For instance if one supermarket chain is doing bad, that is likely the exact time another brand will look to push expansion to build its market share and presence looking to displace the troubled brand.



From the desert to the sea, to all of Southern California
User currently offlineJetbluefan1 From United States of America, joined Dec 2003, 2971 posts, RR: 14
Reply 6, posted (5 years 9 months 3 weeks 5 days 2 hours ago) and read 2280 times:



Quoting CYatUK (Reply 2):
Another possibility (I am possibly going over the top here) is a LCA-ATH-JFK service using A332.

Keeping my fingers crossed! I'm sick of connecting through AMS or LHR.



Most people on a.net hate JetBlue. Get used to it.
User currently offlineBrightCedars From Belgium, joined Nov 2004, 1288 posts, RR: 2
Reply 7, posted (5 years 9 months 3 weeks 4 days 19 hours ago) and read 2219 times:



Quoting OlympicATH (Reply 3):
BRU (OA has 2 daily, which IMHO is enough)

Please don't forget SN's own daily service (except Tuesday) in the Winter, down from double daily in the Summer.



I want the European Union flag on airliners.net!
User currently offlineOlympicATH From United Kingdom, joined Jul 2001, 292 posts, RR: 0
Reply 8, posted (5 years 9 months 3 weeks 4 days 14 hours ago) and read 2117 times:



Quoting LAXintl (Reply 5):
Well I guess you dont run a business do you?

This is an excellent time to do something for the precise reasons that the future of Olympic is in the air. They might cut back even further, disappear or whatever which only opens up more opportunities.

LAXintl what you're saying is logical and I'm sure you have more management experience than I do. However what I meant is that I'd wait for things to settle down a little before I made my move. Of course CY could start by launching some test routes (they already have SKG-CDG) and leave room for expansion. An agressive expansion in Greece would require substantial investments and could be catastrophic if OA were to be restructured and relaunched. Not to mention CY might be in a better situation than OA right now but it is in no case out of the woods. I don't think it could handle such an expansion, which (if OA is relaunched or things don't go as planned) could be catastrophic.

The Greek market is small and not very easy and there are many failures to prove it (both Hellas Jet and Axon had ambitious plans but went bust in no time). Only Aegean has managed to survive and be profitable, after many years of agressive marketing efforts to establish its brand. Olympic is not an airline Greeks are proud of right now, but research shows it has a huge emotional goodwill and is considered a bigger and safer airline than Aegean overall. The potential restructuring of Olympic is one of the main points analysts stress in their recommendations for Aegean's stock. These past few years, with OA being totally mismanaged and unreliable, Aegean hasn't really been facing any real competition. It's been investing and expanding very fast, with every single new route being a success (except maybe for ATH-CAI). If OA were to be relaunched as a reliable, professionally managed airline with a real business plan, the Greek market could change significantly.

Which brings us back to CY. Yes, they could build momentum now that OA is vulnerable. However the Greek government has made it clear the OA we all know will be over in a few months. It will be either relaunched as a privatised efficient one or closed down. It's only a matter of months so it can't hurt to wait for things to settle down. Besides, as I said in my previous post, I don't really see any room for expansion unless OA shrinks some more (which indeed is possible, but not tangible yet). SKG-CDG was a good opportunity after OA canceled the route, but I think that's all for now.


User currently offlineOlympicATH From United Kingdom, joined Jul 2001, 292 posts, RR: 0
Reply 9, posted (5 years 9 months 3 weeks 4 days 14 hours ago) and read 2097 times:

Quoting CYatUK (Reply 2):
Another possibility (I am possibly going over the top here) is a LCA-ATH-JFK service using A332. The market is there and if A3 is not willing to fly longhaul, it could be a good opportunity for CY to do it.

Don't get too excited here. I'd love to see CY in New York but I think it's not even a possibility for many reasons:

1. The Cyprus-NYC market is just not big enough.

2. The ATH-NYC market is well served now, with more than three daily flights in the summer. (9 weekly OA, daily DL and daily CO). The recently (re)launched seasonal flights to ATL on DL and to PHL on US also get their share of Greece-US traffic.
Not to mention the multiple connecting possibilities from ATH, SKG and LCA to the US through Western Europe. ATH alone has seen a considerable rise in frequencies to major European hubs in the past few years: AF to CDG up to 6 daily, LH up to 7 daily to FRA and MUC (+ Aegean), now BA 4 daily.

3. The CY brand is not very big in Greece and I highly doubt it would be anyone's first choice to New York. Low fares would be an incentive, but the idea is to run a profitable route here.

4. The stop in ATH would make the flight less attractive to Cypriot passengers, who could as well consider a connection.

5. Long haul is a totally different story and not being in an alliance doesn't help, even when it comes down to collecting miles which can be an important factor on such a long flight.

OA has been flying to the US for roughly 40 years and is struggling to make its flights to JFK work. Yes, it is OA... But unfortunately I think it still wouldn't work for CY.

Quoting BrightCedars (Reply 7):
Quoting OlympicATH (Reply 3):
BRU (OA has 2 daily, which IMHO is enough)

Please don't forget SN's own daily service (except Tuesday) in the Winter, down from double daily in the Summer.

I'm sorry BrightCedars, you're absolutely right. I didn't mention SN's service simply because OA has more flights and flies more passengers on the route, which is not the case with MAD or AMS. BTW I honestly don't know what the yields are like, but I tend to think two daily flights are necessary to attract business passengers and of course the EU traffic.

[Edited 2008-10-08 06:06:37]

[Edited 2008-10-08 06:07:13]

User currently offlinePanais From Cyprus, joined May 2008, 462 posts, RR: 0
Reply 10, posted (5 years 9 months 3 weeks 4 days 13 hours ago) and read 2045 times:



Quoting OlympicATH (Reply 8):
These past few years, with OA being totally mismanaged and unreliable, Aegean hasn't really been facing any real competition

To be fair to OA, they have been able to hold their own volumes without any reductions in passengers carried. They have been consistently flying about 5 million per year, while Aegean has just recently been able to carry that much. In 5 years this will be another story, but it proves that the Aegean entry gave the opportunity to more people to travel to and from Greece.

On CY, what the pilots are trying to do is to play the blame game with mangement. So if management decides not to go to Greece, they will then turn back and say that they told them to and they did not because they do not know how to manage an airline.

The pilots last idea was to create a low cost airline for the Eastern Mediterennean. CY has to bus transit passengers because they do not have a terminal. (Yet)

The LCA-JFK route can be viable for the summer months only, however this will kill the LCA-LHR business which makes more money.

My opinion, is that CY should stick with Cyprus only and enhance the LCA-ATH route with A321s. They could also enhanced their products to tour operators by selling other services as well such as hotels and car rentals. Increase revenue and margins and will be welcomed now that XL and others have stopped flying altogether.

The current economic chaos, simply demostrates that market share is not everything and cash is king.


User currently offlineCYatUK From United Kingdom, joined Apr 2006, 810 posts, RR: 0
Reply 11, posted (5 years 9 months 3 weeks 4 days 8 hours ago) and read 1974 times:



Quoting OlympicATH (Reply 9):
3. The CY brand is not very big in Greece and I highly doubt it would be anyone's first choice to New York. Low fares would be an incentive, but the idea is to run a profitable route here.

Actually this is one of the CY pilots' points (which I forgot to write). They mention that Greeks see CY as a good and reliable airline and this is the reason for wanting to expand with their own name (rather a subsidiary).

Quoting OlympicATH (Reply 9):
5. Long haul is a totally different story and not being in an alliance doesn't help, even when it comes down to collecting miles which can be an important factor on such a long flight.

Agree!

Quoting OlympicATH (Reply 9):
OA has been flying to the US for roughly 40 years and is struggling to make its flights to JFK work. Yes, it is OA... But unfortunately I think it still wouldn't work for CY.

This is something that has to do with OA and not the route. It is similar with the Australian flights where OA could not make any money even with the planes being 100% full. In fact I recall a newspaper mentioning that taking into account the overheads, a A340 needed to carry 126% of its capacity to break even.

Quoting OlympicATH (Reply 9):
Not to mention the multiple connecting possibilities from ATH, SKG and LCA to the US through Western Europe. ATH alone has seen a considerable rise in frequencies to major European hubs in the past few years: AF to CDG up to 6 daily, LH up to 7 daily to FRA and MUC (+ Aegean), now BA 4 daily.

Agree that ATH is well connected to the US through Western European connections.
The situation at LCA is not that good though. The only possible connections at the moment are either FRA, LHR or AMS (and to a lesser extend VIE). Despite the fact that CY fly to CDG 9 times per week, there is no connectivity to AF services (unless the passenger takes the risk of changing planes). Also, all flights via AMS are controlled by CY since KLM do not operate that route with their own aircraft.

My opinion is that CY could try to establish another 2-3 routes from Greece based on market reasearch and then proceed with caution depending on the results.



CY@Uk
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