airblue
Posts: 1785
Joined: Sat May 19, 2001 9:16 pm

SR,SN,EI All Without A Domestic Market?

Tue Nov 06, 2001 9:55 pm

My consideration is:

SwissAir, Sabena, AerLingus, are all airlines who are going to die due to financial trouble.
But all these carriers have something common: they don't have a domestic network (except the ZRH-GVA route).

Don't you think that without a domestic market where there are less competition and more possibility to make profits (just see SK in Scandinavia (BU take over), or LH in Germany (EW take over) or BA, AF, IB and AZ) is really hard to survive today??

What do you think about it??
 
Guest

RE: SR,SN,EI All Without A Domestic Market?

Tue Nov 06, 2001 9:57 pm

EI had a domestic market - in fact, quite an extensive one.

BA on the other hand says that its domestic/regional flights lose it lots of money.

Go figure!
 
gibberish
Posts: 411
Joined: Mon Sep 11, 2000 5:35 pm

RE: SR,SN,EI All Without A Domestic Market?

Tue Nov 06, 2001 10:04 pm

Actually Swissair and Crossair have more domestic routes, they serve the following cities: Basel, Geneva, Lugano, Berne, Sion and of course Zurich. But it is true, with Switzerland's population being close to 7 million, Swissair has a very small domestic market.

gibberish
 
Guest

Domestic Market Is Not Neccessary

Tue Nov 06, 2001 10:08 pm

The countries which form Europe are quite small. Distances are quite short in most of the countries so flying domestic has not always sinn.
I just think that there are too many airlines which want to present their own country. Look at Ryanair, Virgin Express and easyJet. They are doing well and they have based themselves on profitable airports (even in countries which are not their own country of origen) and are operating from out countries where there is a huge market. They offer what the people are asking for. Flying in Europe was still a matter of luxury. Now it all turns out "as taking the bus by air". No frills.
 
Guest

RE: SR,SN,EI All Without A Domestic Market?

Tue Nov 06, 2001 10:08 pm


You might have a good point here.
 
petertenthije
Posts: 3261
Joined: Tue Jul 10, 2001 10:00 pm

RE: SR,SN,EI All Without A Domestic Market?

Tue Nov 06, 2001 10:42 pm

In Belgium it would probably be not much faster but definately cheaper to go from any point in Belgium to Zaventem (Brussels), then to take the plane at a regional airport, and then fly to Zaventem. Therefore an internal network has very little use. There is to much competition from road and rail, as well as from other airlines (VLM, Virgin Express).
Attamottamotta!
 
sab12
Posts: 95
Joined: Sun Sep 16, 2001 5:40 am

RE: SR,SN,EI All Without A Domestic Market?

Tue Nov 06, 2001 10:50 pm

What about KLM?

They don't have what I call an internal market, just from Eindhoven and Maastricht, but those only exist because the roadsystem and traffic in Holland is worse.
Still KLM is doing better then the rest, so an internal market is not the only factor
 
Saint-Exupery
Posts: 47
Joined: Tue Mar 13, 2001 10:37 pm

RE: SR,SN,EI All Without A Domestic Market?

Tue Nov 06, 2001 11:00 pm

I've never been in Singapore, only at the airport, but I'm quiet sure it doesn't exists anything like a domestic market...
 
gibberish
Posts: 411
Joined: Mon Sep 11, 2000 5:35 pm

RE: SR,SN,EI All Without A Domestic Market?

Tue Nov 06, 2001 11:01 pm

Yes KLM is doing good. There are a few reasons:
NW - most NW pax to Europe connect in AMS
Colonies - The Dutch had colonies and still have territories outside Europe, also a market.
Low cost - It doesn't cost as much to operate KLM with older planes, lower pilot wages and less quality than, say Swissair.

Remember Swissair only failed due to a poor strategy with wasting money, they had the customers. SR used to be the business traveler's preferred airline until their strategy switched from quality to quantity.

gibberish
 
petertenthije
Posts: 3261
Joined: Tue Jul 10, 2001 10:00 pm

RE: SR,SN,EI All Without A Domestic Market?

Tue Nov 06, 2001 11:41 pm

The colonies are a bit far fetched. Sure we have still have the Dutch Antilles, but that won't make the difference between a profitable KLM and a loss-making KLM.

KLM has new planes, but SN and SR had new planes as well. In fact, I wouldn't be surprised if the average age of the planes of SN and SR was newer. KLM still has some old 742's and 743's. Also 733's and 734's.

Personnel costs are indeed cheaper. Although probably still higher than in other places, but I really can't compare. I believe 40% of wages go to taxes etc.

NW is indeed a reason for having a lot of pax.
Attamottamotta!
 
johnnybgoode
Posts: 2144
Joined: Wed Jan 03, 2001 8:47 pm

RE: SR,SN,EI All Without A Domestic Market?

Wed Nov 07, 2001 12:29 am

i don´t think that a domestic market is needed to be succesful.
certainly, for us airlines their domestic is much more important to them than the respective domestic market for such carriers like CSA, LOT, SR, SN, EI, and also bigger european carriers...
but i think it depends on the airlines, the respective markets and the route structure.

cathay pacific and singapore have absolutely no domestic market and they´re quite profitable, but they have no massive short-haul network like american or european air carriers.

rgds
daniel
If only pure sweetness was offered, why's this bitter taste left in my mouth.
 
LGW
Posts: 4281
Joined: Thu Jun 01, 2000 6:07 pm

RE: SR,SN,EI All Without A Domestic Market?

Wed Nov 07, 2001 1:35 am

EI fly DUB-CRK DUB-SNN etc so they do

LGW
 
LJ
Posts: 4116
Joined: Wed Nov 17, 1999 8:28 pm

RE: SR,SN,EI All Without A Domestic Market?

Wed Nov 07, 2001 3:29 am

The reason why KLM is profitable and SN not is very simple. The Netherlands is, unlike Belgium, a large trading nation with a lot of multinationals. Companies like Unilever, Shell (okay both are Anglo-Dutch), ING, ABN AMRO, AHOLD, Phillips and more are all belonging to the world league and generate a lot of air travel. Belgium doesn't have any large multinational. Moreover The Netherlands is the third or fourth largest investor in the USA which generates a lot of biz travel between both countries.

Finally, the cargo market at AMS is much bigger and the yield is very good (a lot of pershiables due to the fact that we've the largest flower market in the world).

Compare this to Belgium and you see why KLM is profitable. Moreover, SR only went bankrupt after it expanded too fast (investing in loss making airlines) and reducing quality standards).

Regards
Laurens
 
teahan
Posts: 4990
Joined: Sun Nov 21, 1999 11:18 pm

RE: SR,SN,EI All Without A Domestic Market?

Wed Nov 07, 2001 3:35 am

Hello,

Up to a number of months ago (and for some routes, an year or two), Aer Lingus were pretty strong in the domestic market including Kerry, Galway, Donegal and so on. They gave up the last 2 Kerry and Galway earlier this year, I was on the last DUB-KIR flight. They even got payed under the PSO scheme to operate these flights. I was one of those who tried a lot for them to continue Kerry and Galway, got myself hated on an Irish Aviation Forum and so on. Aer Arann took over.

Jeremiah
Goodbye SR-LX MD-11 / 6th of March 1991 to the 31st of October 2004
 
airblue
Posts: 1785
Joined: Sat May 19, 2001 9:16 pm

RE: SR,SN,EI All Without A Domestic Market?

Wed Nov 07, 2001 3:41 am

My point was that in Europe, except low-cost carriers that are doing well, the high pressure of competition on intra-european flights reduced the profits margin, so for the so called "flag carriers" is too important to have a large domestic network in which the competition is low and the profit high.
Only BA today has also the pressure of low-cost carrier in domestic market.
 
LJ
Posts: 4116
Joined: Wed Nov 17, 1999 8:28 pm

RE: SR,SN,EI All Without A Domestic Market?

Wed Nov 07, 2001 3:53 am

And what about KLM? Yes no competition on domestic flights but they have fierce low cost competition on one of their most profitable route (Amsterdam - London).

Regards
Laurens

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