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LOT In Trouble?  
User currently offlineDelta777Jet From Germany, joined Jun 2000, 1296 posts, RR: 3
Posted (2 years 4 months 2 weeks 2 days 5 hours ago) and read 12481 times:

Today was the opening ceremony of the new Low Cost airport near to Warsaw, Warsaw-Modlin airport.
Wizz Air will move its entire operation to Modlin and Ryanair will open many routes. Additionally there is the new OLT Express competing very strong on domestic and from October also on European routes, flying directly from Warsaw's main airport. From next year on Emirates will start to kick them on the East routes.


Will LOT be able to survive this pressure ?


Fly easyJet
26 replies: All unread, showing first 25:
 
User currently offlinekl911 From Czech Republic, joined Jul 2003, 5256 posts, RR: 15
Reply 1, posted (2 years 4 months 2 weeks 2 days 5 hours ago) and read 12457 times:

Ryanair and Wizzair have different kind of pax. Pax who would have never flown at all if prices are not low enough. Doubt that LOT is at risk from them. BA for example has Easyjet, Ryanair and Wizzair at London and survives.

User currently offlineCubsrule From United States of America, joined May 2004, 23194 posts, RR: 20
Reply 2, posted (2 years 4 months 2 weeks 2 days 5 hours ago) and read 12432 times:

Quoting Delta777Jet (Thread starter):
From next year on Emirates will start to kick them on the East routes.

I missed LO's flights to DEL, BLR, MCT, and KHI. EK isn't really competing for Europe-PEK traffic.

LO has problems. EK isn't one of them.



I can't decide whether I miss the tulip or the bowling shoe more
User currently offlineju068 From Vanuatu, joined Aug 2009, 2737 posts, RR: 6
Reply 3, posted (2 years 4 months 2 weeks 2 days 4 hours ago) and read 12291 times:
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It will be difficult for LOT to compete against these other airlines but they do have some advantages over their competition. Most importantly WAW is three times closer to the city than Modlin is. LOT has a great onboard product and they operate a modern fleet with decent connections to all parts of Europe.
Just recently they considered axing their Belgrade flights but after implementing a new approach to the market things changed dramatically. This goes to prove that LOT has what numerous carriers lack today: a competent management.

I wonder if the new Modlin airport will have some impact on Lodz airport. After all it seems to me that the two airports are not that far.

If anything, it is nice to see OLT Express making things much more interesting in the Polish aviation market.


User currently offlinemdavies06 From United Kingdom, joined Aug 2009, 386 posts, RR: 0
Reply 4, posted (2 years 4 months 2 weeks 2 days 3 hours ago) and read 12076 times:

Quoting kl911 (Reply 1):
Ryanair and Wizzair have different kind of pax. Pax who would have never flown at all if prices are not low enough. Doubt that LOT is at risk from them. BA for example has Easyjet, Ryanair and Wizzair at London and survives.

BA actually would have closed down long ago had BA not been benefitting from its long haul operations, particularly its NA routes. BA was losing money on its short haul network for years in the 2010s.


User currently offlinebestwestern From Hong Kong, joined Sep 2000, 7257 posts, RR: 57
Reply 5, posted (2 years 4 months 2 weeks 2 days ago) and read 11656 times:

LO is in trouble. This different type of passenger argument isn't valid. The same can be said for Malev and CSA and all the other European flag carriers, whose home markets are low yield.

Whilst our friends in Wizz and Ryan will grow the market dramatically, a considerable proportion of the new LCC growth will come from LOT - and will impact both their yields and loads. Whilst LOT will be able to command a yield premium, their cost disadvantage is even greater.

Competent management at LOT commenced services to Hanoi, so unsure if they are really that bright afterall.

EK will compete for eastbound passengers, and make their putative Beijng services even more loss making.

LO fleet isn't in too bad a shape - their E jets are fuel efficient. The 787 order was a folly.



The world is really getting smaller these days
User currently offlineEY460 From United States of America, joined Jan 2012, 270 posts, RR: 0
Reply 6, posted (2 years 4 months 2 weeks 1 day 21 hours ago) and read 10891 times:

Quoting kl911 (Reply 1):

The same could have been said for MALEV. And we all know how it ended.


User currently offlineju068 From Vanuatu, joined Aug 2009, 2737 posts, RR: 6
Reply 7, posted (2 years 4 months 2 weeks 1 day 20 hours ago) and read 10247 times:
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Quoting bestwestern (Reply 5):
LO is in trouble. This different type of passenger argument isn't valid. The same can be said for Malev and CSA and all the other European flag carriers, whose home markets are low yield.

The problem with Eastern European carriers is not so much that their market is low yielding but that they have not adapted to the change in their operating environment, that is from a protected to a liberal one. But decades of ineffective economic planning had destroyed any form of competence among the 'political elite' which would not know what competition is, even less how to fight it. Until that political elite is replaced with the newer generation things will be difficult.
Without adequate reform these carriers could not compete effectively against new airlines in their market.
All of the ex-communist countries had their airlines as a system for employing the children of the 'revolutionary heroes'.

Malev's problem was that the current CEO of Wizz Air signed a detrimental fleet renewal which ensured that Malev could never make a profit. This was the real reason for Malev's collapse, their slow death began the moment they started advertizing their youngest fleet in Europe.

On the other hand LOT is the only carrier in Eastern Europe to successfully maintain long-haul flights. As for Hanoi, those flights had the loads but not the yields. In other words LOT's management sensed that there was a market and they entered it but left it soon after because the yields did not live to their expectations. Calling LOT's management 'not smart' is unfair because this happens to all airlines.

I am confident LOT will be just fine because they are the only post-communist airline to show signs of good management.


User currently offlinemarky From United Kingdom, joined Nov 2003, 214 posts, RR: 0
Reply 8, posted (2 years 4 months 2 weeks 1 day 19 hours ago) and read 9956 times:

Is LOT in trouble?

I'd suggest that long term virtually every European full service carrier that isn't part of IAG, Lufthansa Group or AF-KLM is probably in trouble......


User currently offlinekl911 From Czech Republic, joined Jul 2003, 5256 posts, RR: 15
Reply 9, posted (2 years 4 months 2 weeks 1 day 18 hours ago) and read 9339 times:

Quoting EY460 (Reply 6):
The same could have been said for MALEV. And we all know how it ended.

MALEV was killed by its management and the government. Ryanair wasnt even at BUD untill malev collapsed.


User currently offlineju068 From Vanuatu, joined Aug 2009, 2737 posts, RR: 6
Reply 10, posted (2 years 4 months 2 weeks 1 day 16 hours ago) and read 8376 times:
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Quoting kl911 (Reply 9):

Well that is not true, Ryanair left Budapest because of an argument over the prices while Malev was still around. Though Malev did not have to deal with Ryanair they had to deal with Wizz Air which made their life much more difficult.


User currently offlineCubsrule From United States of America, joined May 2004, 23194 posts, RR: 20
Reply 11, posted (2 years 4 months 2 weeks 1 day 12 hours ago) and read 6802 times:

Quoting bestwestern (Reply 5):
EK will compete for eastbound passengers, and make their putative Beijng services even more loss making.

I know EK has a nice onboard product, but why would anyone fly 2000 miles out of their way when it would be far easier to connect at any number of places in Europe if one does not wish to fly LO?



I can't decide whether I miss the tulip or the bowling shoe more
User currently offlinehoya From United States of America, joined Jun 2004, 416 posts, RR: 0
Reply 12, posted (2 years 4 months 2 weeks 1 day 12 hours ago) and read 6776 times:

Quoting bestwestern (Reply 5):
Competent management at LOT commenced services to Hanoi, so unsure if they are really that bright afterall.
Quoting ju068 (Reply 7):
On the other hand LOT is the only carrier in Eastern Europe to successfully maintain long-haul flights. As for Hanoi, those flights had the loads but not the yields. In other words LOT's management sensed that there was a market and they entered it but left it soon after because the yields did not live to their expectations. Calling LOT's management 'not smart' is unfair because this happens to all airlines.

I got the feeling the Hanoi flights were axed because LO needed a plane to fly to PEK. After all, Poland has a very large Vietnamese community - admittedly that probably meant lots of VFR traffic, but at least that was a source of customers.

Modlin's problem is that it's far from the city center. Business travelers will not drive that far. WAW is close to the city center, and has great public transportation links, particularly after the train station opened. EK believes there is a large enough business market to warrant a 3-class daily flight out of WAW. LO is better able to capture that higher-yielding traffic at WAW, unlike Wizz or Ryanair out at Modlin. LO also seemed to be doing well even though it was competing with Wizz at WAW. Now that competition will be gone.

As for OLT Express, they already have received bad press due to their old ATRs breaking down. Additionally, they're flooding the market with too much capacity, and their business plan doesn't make sense in the long-term. Once Poland's roads and railways are upgraded, flying domestically will make little sense. There's a reason LO mostly flies its E-Jets and K2's turboprops domestically. If anyone is a casualty of Modlin, it will be OLT.



Hoya Saxa!!
User currently offlineraaadek From United Kingdom, joined Sep 2007, 51 posts, RR: 0
Reply 13, posted (2 years 4 months 2 weeks 1 day 12 hours ago) and read 6645 times:

Interesting question. From my own experience - I am a 'price sensitive, low yield' passenger and travel frequently on the LON-WAW route. Before OLT started operations and Modlin opened there were 3 options LO, BA, W6 - all flying into WAW. Most of my trips in the last 3 years were on LO. That was because I could get a return ticket with LO for £60-80 and Wizzair, being the only LCC at WAW had little incentive to lower their fares - they were usually at the same level as LOT and often more expensive. Now, my next 4 trips are 2xW6, OLT and LO. The price war between FR and W6 had already started and you can get a RT for as little as £15 from WMI. This means that LO won't be getting my £70 any time soon, the question is - will they miss it? Can they even make profit on that fare.
BTW. In my opinion W6 moving from WAW to WMI was not a smart move. They knew in advance that FR will be flying from WMI as well and at the moment they go head to head on almost all their routes from WMI. Can W6 compete with FR? MO'L has already said that their tickets from WMI will always be cheaper than W6, even if it means selling them for 1p. Comparing the size and bank accounts of the 2 airlines has W6 any hope? Would't it be smarter to stay at WAW. How much more expensive is it to fly from WAW vs. WMI? £5, £10 per sector, per head? Many people would be glad to pay the difference and fly from WAW. As it is, if the price is the same from WMI I'd always choose FR because they are simply better and more reliable in my view. Sorry for drifting off topic.


User currently offlineju068 From Vanuatu, joined Aug 2009, 2737 posts, RR: 6
Reply 14, posted (2 years 4 months 2 weeks 1 day 11 hours ago) and read 6434 times:
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Does anyone know how much does it cost to reach the city from Modlin? Also how long is the ride?

User currently offlineJarek From Poland, joined May 2001, 347 posts, RR: 1
Reply 15, posted (2 years 4 months 2 weeks 1 day 10 hours ago) and read 5738 times:

Quoting ju068 (Reply 14):
Does anyone know how much does it cost to reach the city from Modlin? Also how long is the ride?

About 15 PLN for the bus and train ride and it would take about 1 hour 20 minutes.
99 PLN for the taxi ride. That would be about 30 minutes I guess.

[Edited 2012-07-08 09:38:43]

User currently offlineju068 From Vanuatu, joined Aug 2009, 2737 posts, RR: 6
Reply 16, posted (2 years 4 months 2 weeks 1 day 10 hours ago) and read 5618 times:
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Quoting Jarek (Reply 15):

About 15 PLN for the bus and train ride and it would take about 1 hour 20 minutes.
99 PLN for the taxi ride. That would be about 30 minutes I guess.

Wow!! 01:30 for the ride to the city?? I do not see many people opting for this unless there is a huge difference in price. Thanks for the info.


User currently offlinedcaviation From Poland, joined Aug 2011, 222 posts, RR: 0
Reply 17, posted (2 years 4 months 2 weeks 1 day 10 hours ago) and read 5618 times:
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Quoting Jarek (Reply 15):
99 PLN for the taxi ride. That would be about 30 minutes I guess.

How far is Modlin from Central Station?
WAW is about 11km and I'm yet to pay for taxi less then 50 PLN.


User currently offlineJarek From Poland, joined May 2001, 347 posts, RR: 1
Reply 18, posted (2 years 4 months 2 weeks 1 day 8 hours ago) and read 4996 times:

Modlin is outside of the city. About 35 km

See here (in Polish)
http://www.modlinairport.pl/site/%EF%BB%BFdojazd%20na%20lotnisko


User currently offlineJeffinMass From United States of America, joined Dec 2011, 27 posts, RR: 0
Reply 19, posted (2 years 4 months 2 weeks 1 day 6 hours ago) and read 4082 times:

Didn't Turkish Airlines purchase controlling interest in LOT recently?

User currently offlineB777LRF From Luxembourg, joined Nov 2008, 1426 posts, RR: 3
Reply 20, posted (2 years 4 months 2 weeks 1 day 6 hours ago) and read 3822 times:

Quoting JeffinMass (Reply 19):
Didn't Turkish Airlines purchase controlling interest in LOT recently?

Nope, they backed out before a deal was even close to being made. Besides, there's a problem when a company from a non-EU country acquires more than 49%. Basically that would result in the carrier loosing it's "EU" status.



From receips and radials over straight pipes to big fans - been there, done that, got the hearing defects to prove
User currently offlineBuyantUkhaa From Mongolia, joined May 2004, 2907 posts, RR: 3
Reply 21, posted (2 years 4 months 2 weeks 19 hours ago) and read 3050 times:

Quoting hoya (Reply 12):
I got the feeling the Hanoi flights were axed because LO needed a plane to fly to PEK.

Correct.

Quoting hoya (Reply 12):
Once Poland's roads and railways are upgraded, flying domestically will make little sense.

Well, don't underestimate the distances - GDN-KRK for example would still take you almost 6 hours after all railway upgrades (currently 8-10) so there will always be a market on domestic flights, smaller maybe, but still.



I scratch my head, therefore I am.
User currently offlineLOWS From Austria, joined Oct 2011, 1175 posts, RR: 1
Reply 22, posted (2 years 4 months 2 weeks 16 hours ago) and read 2887 times:

Quoting hoya (Reply 12):
Once Poland's roads and railways are upgraded, flying domestically will make little sense. There's a reason LO mostly flies its E-Jets and K2's turboprops domestically.

And when is that supposed to happen?

I've heard Polish train service is awful, so say the least.


User currently offlineeaa3 From United States of America, joined Sep 2007, 1028 posts, RR: 0
Reply 23, posted (2 years 4 months 2 weeks 15 hours ago) and read 2819 times:

Quoting B777LRF (Reply 20):
Nope, they backed out before a deal was even close to being made. Besides, there's a problem when a company from a non-EU country acquires more than 49%. Basically that would result in the carrier loosing it's "EU" status.

Are you sure of this. The EU mandates that there are no restrictions on ownership of airlines within the EU but often the contries themselves restrict foreign ownerships from entities from outside the EU. The EU doesn´t get involved in this.


User currently offlineju068 From Vanuatu, joined Aug 2009, 2737 posts, RR: 6
Reply 24, posted (2 years 4 months 2 weeks 15 hours ago) and read 2799 times:
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Quoting eaa3 (Reply 23):
Are you sure of this. The EU mandates that there are no restrictions on ownership of airlines within the EU but often the contries themselves restrict foreign ownerships from entities from outside the EU. The EU doesn´t get involved in this.

Turkey is not a member of the European Union hence why there was a problem with ownership. Had TK bought LO it would lose the status of an EU carrier.


25 WROORD : LO flies with 737 on routes from WAW to GDN and WRO. Exactly, therefore OLT has now 3 x daily A320 on routes from GDN to KRK and WRO. Poland is more
26 bestwestern : Because its cheap and good service. Lets get real here - Hanoi was axed because it lost a fortune.
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