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FlyGlobespan Cash Flow Issues  
User currently offlineHumberside From United Kingdom, joined Dec 2005, 4914 posts, RR: 5
Posted (4 years 5 months 6 days 8 hours ago) and read 6308 times:

Administrators were almost called into FlyGlobespan on Friday due to a cash flow problem caused by their credit card processing company delaying payments. They have become cautious after the collapse of SkyEurope and may have financial problems themselves.

GSM managed to secure last minute funding but it is unsure if this will see them though long term. While the credit card company are partialy responsible, it shows that GSM's cashflow position isn't very good either

In some sense this reminds me of why Frontier went into Chapter 11

http://www.independent.co.uk/news/bu...-flying-ndash-for-now-1820805.html

[Edited 2009-11-15 04:21:02]


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21 replies: All unread, jump to last
 
User currently offlineBestWestern From Hong Kong, joined Sep 2000, 6953 posts, RR: 57
Reply 1, posted (4 years 5 months 6 days 8 hours ago) and read 6241 times:

Interesting comments from a poster to the newspaper

FlyGlobespan can not compete on price.
FlyGlobespan can not compete on reliability.
FlyGlobespan can not compete on customer care.
FlyGlobespan can not compete onfrequency of flights.
When an airline can not compete in its home market (Scotland) then the companies days are always going to be numbered.


My personal opinion on Globespan is well known, and I wont repeat it today



The world is really getting smaller these days
User currently offlineEaa3 From United States of America, joined Sep 2007, 980 posts, RR: 0
Reply 2, posted (4 years 5 months 6 days 8 hours ago) and read 6228 times:



Quoting BestWestern (Reply 1):
My personal opinion on Globespan is well known, and I wont repeat it today

I think you just did  Smile


User currently offlineBA174 From United Kingdom, joined Oct 2009, 745 posts, RR: 0
Reply 3, posted (4 years 5 months 6 days 7 hours ago) and read 6131 times:

I always wondered how long they would last once Zoom etc went under.

User currently offlineShamrock604 From Ireland, joined Sep 2007, 4109 posts, RR: 13
Reply 4, posted (4 years 5 months 6 days 7 hours ago) and read 6130 times:



Quoting BestWestern (Reply 1):
When an airline can not compete in its home market (Scotland) then the companies days are always going to be numbered.

No doubt, they have issues.

Having been through airline bankrupty, I can tell you it is'nt nice, and is a fate I hope that all at GSM manage to avoid.

That said, I also hope they can get their s**t together with regards to reliability, service, etc etc.



Flown EI,FR,RE,EIR,VE,SI,TLA,BA,BE,BD,VX,MON,AF,YS,WX,KL,SK,LH,OK,OS,LX,IB,LTU,HLX,4U,SU,CO,DL,UA,AC,PR,MH,SQ,QF, EY, EK
User currently offlineSrbmod From , joined Dec 1969, posts, RR:
Reply 5, posted (4 years 5 months 6 days 6 hours ago) and read 6015 times:



Quoting Humberside (Thread starter):
Administrators were almost called into FlyGlobespan on Friday due to a cash flow problem caused by their credit card processing company delaying payments. They have become cautious after the collapse of SkyEurope and may have financial problems themselves.

For credit card processors to do did is bad business, as it really makes it hard for a company whose cash flow has been throttled (I think of it along the lines when you crimp a water hose and the water coming out is a trickle.) to operate. Here in the States, Frontier went into bankruptcy partially because their credit card processor was doing the same thing (as well as more than doubling the collateral), as a few weeks prior three airlines went out of business (Aloha, ATA, and Skybus) and a fourth announced they were closing down in a few months (Champion). Part of the reason why they filed was so that they could force that processor to make the payments to Frontier they were supposed to be making.

From the way it sounds, FlyGlobespan's days could be numbered even with the last-minute influx of new financing . News like this is not going to help their business at all, as some will get the impression that the airline is bound to go under at any time. There are folks that won't do business with a company that sounds like it is on the brink of collapse.


User currently offlineShamrock604 From Ireland, joined Sep 2007, 4109 posts, RR: 13
Reply 6, posted (4 years 5 months 6 days 6 hours ago) and read 5999 times:



Quoting Srbmod (Reply 5):
From the way it sounds, FlyGlobespan's days could be numbered even with the last-minute influx of new financing . News like this is not going to help their business at all, as some will get the impression that the airline is bound to go under at any time. There are folks that won't do business with a company that sounds like it is on the brink of collapse.

Indeed. Unfortunatly, it's a self fulfilling prophecy. One whiff of trouble like this, and suddenly everyone like fuellers, cleaners, caterers get spooked, start demanding cash payment, and everything suddenly gets quite difficult for you! ;-(



Flown EI,FR,RE,EIR,VE,SI,TLA,BA,BE,BD,VX,MON,AF,YS,WX,KL,SK,LH,OK,OS,LX,IB,LTU,HLX,4U,SU,CO,DL,UA,AC,PR,MH,SQ,QF, EY, EK
User currently offlineGkirk From UK - Scotland, joined Jun 2000, 24815 posts, RR: 56
Reply 7, posted (4 years 5 months 6 days 6 hours ago) and read 5976 times:

They should get rid of the 767s, concentrate on short haul flying from EDI, GLA and ABZ.
if GSM were to go under, it would be disastrous, especially for GLA.



When you hear the noise of the Tartan Army Boys, we'll be coming down the road!
User currently offlineGordonsmall From UK - Scotland, joined Jun 2001, 2003 posts, RR: 22
Reply 8, posted (4 years 5 months 6 days 5 hours ago) and read 5843 times:



Quoting Gkirk (Reply 7):
if GSM were to go under, it would be disastrous, especially for GLA.

I'm not so sure to be honest.

IMHO, GSM provide nothing radical that wasn't around before they appeared on the scene. They are nothing more than a glorified charter airline, and not a particularly good one at that.

I will never understand how GSM can be failing at what they do; they have the right fleet, by and large a great bunch of crew, a willing market and management who (on the whole) have a fair idea what they're doing. Why can't they match all the pieces up?



Statistically, people who have had the most birthdays tend to live the longest.
User currently offlineGkirk From UK - Scotland, joined Jun 2000, 24815 posts, RR: 56
Reply 9, posted (4 years 5 months 6 days 5 hours ago) and read 5830 times:



Quoting Gordonsmall (Reply 8):
Why can't they match all the pieces up?

They operate stupid flights such as LGW-YYC-YVR, MAN-YYC-YVR, DUB-YYC-YVR. They should stick to the Scottish market and ignore England and Ireland



When you hear the noise of the Tartan Army Boys, we'll be coming down the road!
User currently offlineShamrock604 From Ireland, joined Sep 2007, 4109 posts, RR: 13
Reply 10, posted (4 years 5 months 6 days 5 hours ago) and read 5795 times:



Quoting Gkirk (Reply 9):
They operate stupid flights such as LGW-YYC-YVR, MAN-YYC-YVR, DUB-YYC-YVR. They should stick to the Scottish market and ignore England and Ireland

Putting all your eggs in one basket is hardly good strategy. If the flights make money, why should they go?



Flown EI,FR,RE,EIR,VE,SI,TLA,BA,BE,BD,VX,MON,AF,YS,WX,KL,SK,LH,OK,OS,LX,IB,LTU,HLX,4U,SU,CO,DL,UA,AC,PR,MH,SQ,QF, EY, EK
User currently offlineGkirk From UK - Scotland, joined Jun 2000, 24815 posts, RR: 56
Reply 11, posted (4 years 5 months 6 days 4 hours ago) and read 5752 times:



Quoting Shamrock604 (Reply 10):
Putting all your eggs in one basket is hardly good strategy. If the flights make money, why should they go?

Hawd on, BA put all their eggs into Lond....oh wait Big grin

They need to get back to basics, at GLA, they dont have too much competition, so thats where they should concentrate on. EDI is full of EZY, FR and LS.



When you hear the noise of the Tartan Army Boys, we'll be coming down the road!
User currently offlineShamrock604 From Ireland, joined Sep 2007, 4109 posts, RR: 13
Reply 12, posted (4 years 5 months 6 days 4 hours ago) and read 5723 times:



Quoting Gkirk (Reply 11):
Hawd on, BA put all their eggs into Lond....oh wait

Touche... and hence why they need to go merging!  Wink

OK, I accept what you say about getting back to basics, but if they can put all this long haul capacity into GLA on a profitable basis, then sure, they should go for it. Clearly, they felt different however.



Flown EI,FR,RE,EIR,VE,SI,TLA,BA,BE,BD,VX,MON,AF,YS,WX,KL,SK,LH,OK,OS,LX,IB,LTU,HLX,4U,SU,CO,DL,UA,AC,PR,MH,SQ,QF, EY, EK
User currently offlineBestWestern From Hong Kong, joined Sep 2000, 6953 posts, RR: 57
Reply 13, posted (4 years 5 months 6 days ago) and read 5414 times:



Quoting Gkirk (Reply 9):
They should stick to the Scottish market and ignore England and Ireland

Agree 100%

Quoting Shamrock604 (Reply 10):
Putting all your eggs in one basket is hardly good strategy.

Globespans market with too many focus cities in the UK and Ireland means that they cant hope for operational stability, nor can they market to everyone.

Quoting Gkirk (Reply 11):
They need to get back to basics, at GLA,

I agree 100%.



The world is really getting smaller these days
User currently offlineGordonsmall From UK - Scotland, joined Jun 2001, 2003 posts, RR: 22
Reply 14, posted (4 years 5 months 5 days 20 hours ago) and read 5153 times:



Quoting Gkirk (Reply 9):
They should stick to the Scottish market and ignore England and Ireland

I'm actually inclined to agree. It's a well recongised brand in Scotland these days, and whilst I severely dislike the way they portray themselves as a serious scheduled airline akin to U2, FR etc I do believe that if they just got their act together, set up a consistent 'bucket and spade' program from the major gateways (GLA, EDI, ABZ and even INV) and kept their ambitions realistic (i.e. not trying to make TATL work from EVERY airport in the country!) then they could do well.

Quoting Shamrock604 (Reply 12):
if they can put all this long haul capacity into GLA on a profitable basis, then sure, they should go for it. Clearly, they felt different however.

I think the biggest problem they face is that they simply have too much long haul capacity for what they do, hence why there have been so many deals set up to lease out the 767's to other airlines.

Quoting BestWestern (Reply 13):
Globespans market with too many focus cities in the UK and Ireland means that they cant hope for operational stability, nor can they market to everyone.

Exactly!



Statistically, people who have had the most birthdays tend to live the longest.
User currently offlineAerecosse From UK - Scotland, joined Mar 2009, 85 posts, RR: 0
Reply 15, posted (4 years 5 months 5 days 10 hours ago) and read 4459 times:

statetment from GSM indicates it wants to grow........ we'll watch this sapce

http://www.heraldscotland.com/news/t...ash-lifeline-says-airline-1.932675



Flown: BA,BD,BY,AMM,DA,MON,LC,BE,EI,FR,EZY,NW,CO,US,HP,F9,AC,QF,AN,NZ,TN,GZ,MH,EK,EY,PG,IB,JK,FH,BV,LH,SA
User currently offlineShamrock604 From Ireland, joined Sep 2007, 4109 posts, RR: 13
Reply 16, posted (4 years 5 months 5 days 9 hours ago) and read 4382 times:



Quoting BestWestern (Reply 13):
Globespans market with too many focus cities in the UK and Ireland means that they cant hope for operational stability, nor can they market to everyone.

I appreciate that they have had reliability issues. Let me just say that my work background dictates that speading one's self too thinly in an operational sense is something one should always seek to avoid!  Wink



Flown EI,FR,RE,EIR,VE,SI,TLA,BA,BE,BD,VX,MON,AF,YS,WX,KL,SK,LH,OK,OS,LX,IB,LTU,HLX,4U,SU,CO,DL,UA,AC,PR,MH,SQ,QF, EY, EK
User currently offlineMCO2BRS From United Kingdom, joined Jan 2007, 537 posts, RR: 0
Reply 17, posted (4 years 5 months 5 days 8 hours ago) and read 4159 times:

Would these cash flow issues at the airline have an impact on their Tour Operator side, or are there safeguards in place where if one failed the other would not?

Cheers,

MCO-2-BRS


User currently offlineNighthawk From UK - Scotland, joined Sep 2001, 5093 posts, RR: 35
Reply 18, posted (4 years 5 months 5 days 7 hours ago) and read 4073 times:



Quoting Gordonsmall (Reply 14):
I'm actually inclined to agree. It's a well recongised brand in Scotland these days, and whilst I severely dislike the way they portray themselves as a serious scheduled airline akin to U2, FR etc I do believe that if they just got their act together, set up a consistent 'bucket and spade' program from the major gateways (GLA, EDI, ABZ and even INV) and kept their ambitions realistic (i.e. not trying to make TATL work from EVERY airport in the country!) then they could do well.

Dont forget Globespans primary market has always been their package deals to Canada, with flights provided by Air Transat. Their decision to operate the flights themselves was a logical one, however im not sure how well it has worked out.

I wonder how well the Aberdeen flights are working out, it seems to be a difficult market to crack, folk up here only seem to be interested in travelling to Norway. GSM have done a lot of chopping and changing of destinations, hopefully they have finally found a few that work.



That'll teach you
User currently offlineMainMAN From United Kingdom, joined Jul 2005, 2086 posts, RR: 5
Reply 19, posted (4 years 5 months 5 days 7 hours ago) and read 4022 times:



Quoting Nighthawk (Reply 18):

I wonder how well the Aberdeen flights are working out, it seems to be a difficult market to crack, folk up here only seem to be interested in travelling to Norway. GSM have done a lot of chopping and changing of destinations, hopefully they have finally found a few that work.

With a monopoly on ABZ - all sunny points south, you'd think that they'd be able to make them work. Having said that, they only have a captive audience of about 600,000 people, or 800k if Highland is included.

Quoting Gkirk (Reply 9):

They operate stupid flights such as LGW-YYC-YVR, MAN-YYC-YVR, DUB-YYC-YVR

I can't see any evidence of these continuing, unless I'm looking in the wrong place. Their Orlando programme seems to consist of such routings as SFB - CWL - GLA - SFB and even SFB - GLA - EDI - SFB! (but who am I to judge what makes money?)


User currently offlineHumberside From United Kingdom, joined Dec 2005, 4914 posts, RR: 5
Reply 20, posted (4 years 5 months 5 days 4 hours ago) and read 3899 times:

A follow up article from the Independent focusing on the credit card company and possible issues they have, though comments on pprune indicate the entire story could have been made up. Either way GSM seem to have got long term investment now

http://www.independent.co.uk/news/bu...ence-ahead-for-eclear-1812629.html

Quoting Nighthawk (Reply 18):
I wonder how well the Aberdeen flights are working out, it seems to be a difficult market to crack, folk up here only seem to be interested in travelling to Norway. GSM have done a lot of chopping and changing of destinations, hopefully they have finally found a few that work

GSM seem to be fairly constant in what they offer from ABZ in summer, though they are adding Dubrovnik next summer. But in winter they seem to be only able to make a weekly TFS work. On one hand ABZ does have a small catchment, but ZB could fill 2 or 3 AGP flights in winter not so long ago

Quoting MainMAN (Reply 19):
I can't see any evidence of these continuing, unless I'm looking in the wrong place

Canada 2009 has finished and Canada 2010 is not yet on sale, but GSM have certainly done routings like GKirk mentioned in the past. Double drop YYC/YVR isn't uncommon for Canada-Europe leisure flights and GSM aren't the only airline to do it



Visit the Air Humberside Website and Forum
User currently offlineBestWestern From Hong Kong, joined Sep 2000, 6953 posts, RR: 57
Reply 21, posted (4 years 4 months 4 weeks 1 day 10 hours ago) and read 3329 times:



Quoting Humberside (Reply 20):
Double drop YYC/YVR isn't uncommon for Canada-Europe leisure flights and GSM aren't the only airline to do it

But that works for airlines with operational support in these airports. GSM operate double drops into canada from airports in Europe that are basically offline. It is this complexity that causes chaos if anything goes wrong.

When GSM operated from Ireland to Boston and JFK it was chaotic, with frequent delays right accross the network - which has resulted in passengers and agencies not trusting the service.



The world is really getting smaller these days
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