gilesdavies
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A350 & 787 Only Way Low Cost Long Haul Can Work...

Thu Jun 13, 2013 11:31 am

Just reading this interesting article on the BBC website with Bjorn Kjos and talking about Low Cost Carriers operating long haul routes...

Interestingly he goes on to say, they had tried looking into operating Long Haul routes in the past, but before the A350 and 787 came along, the economics did not add up for them to be able fly routes profitably with the current generation of aircraft. Interesting how airlines like Air Asia X and charter carriers like Air Transat which follow the same sort of model can do so.

He also talks about how it is vital they fly the most modern and up to date aircraft, and how they dispose of aircraft within 4-5 years of them being in the fleet, even though the aircraft are capable of flying for 25-30 years, they will not be profitable for them.

Anyway here is the article and interview:
http://www.bbc.co.uk/news/business-22840790
 
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Stitch
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RE: A350 & 787 Only Way Low Cost Long Haul Can Work...

Thu Jun 13, 2013 12:10 pm

Quoting gilesdavies (Thread starter):
Interesting how airlines like Air Asia X and charter carriers like Air Transat which follow the same sort of model can do so.

Air Asia X did end a number of their long-haul routes currently operated with the A330/A340, so perhaps they now need the greater efficiency of the A350 in order to make them work.
 
AngMoh
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RE: A350 & 787 Only Way Low Cost Long Haul Can Work...

Thu Jun 13, 2013 12:36 pm

Quoting Stitch (Reply 1):
Air Asia X did end a number of their long-haul routes currently operated with the A330/A340, so perhaps they now need the greater efficiency of the A350 in order to make them work.

As part of their IPO, AirAsia X has stated that they found a profitable sweet spot in 4-9hr flights. More than 9 hrs does not work, so that is in line with a lot of cancelled route. Scoot is targeting the same type of flights and I believe most of the Jetstar widebodies are in the same range too.
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waly777
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RE: A350 & 787 Only Way Low Cost Long Haul Can Work...

Thu Jun 13, 2013 1:06 pm

Hmm, I suppose the air transport world is watching NAS very closely. However, the long haul LCC concept has been studied quite extensively and quite frankly it is hard to see just how well it can work.

As the article rightly pointed out, the cost efficiencies experienced by short haul LCC's can't be translated to long haul, particularly with fuel. Fuel is a much smaller expense by % of short haul operations, whereas with long haul it is the major expense and rises quite rapidly as the stage length increases. Both LCC and FSC long haul operators will experience the same fuel consumption on the same distance flights. In addition, they will both operate from the same airports seeing as there are few secondary international airports...hence landing and navigation charges will be similar. The only differentiation seems to be more seats (which the FSC's are quickly wisening up to in economy) to lower CASK.

Even with the newer and more fuel efficient a350 and 787 (which the FSC's have also ordered), I struggle to see this model succeeding outside the Asia pacific region (which is frankly more medium haul with air asia x than long haul).

Then again, they just might surprise everyone seeing as the demand for economy seating is more inelastic to economic shocks and passengers increasingly seem to be willing to put up with less comfort for the right price.
The test of first-rate intelligence is the ability to hold 2 opposed ideas in the mind concurrently, and still function
 
CXfirst
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RE: A350 & 787 Only Way Low Cost Long Haul Can Work...

Thu Jun 13, 2013 1:23 pm

I do believe Norwegian will do better than for instance Air Asia X did into Europe. Firstly, they do have a lot of Scandinavian feed, and even feed from other places in Europe. Air Asia X also did have this on the Asian end, so that in itself isn't the advantage. Air Asia flew into large European airports with a lot of competition, while Norwegian has started flying from OSL and ARN, two airports that are not seeing the amount of intercontinental traffic that they should, seeing how CPH-centric SAS is (arguably, this is what will work best for SK, but it leaves an open market). Sure, NYC and BKK have services already, but I believe DY will not just share that traffic, but take some of the Mediterranean traffic too BKK, and European big city traffic to NYC (prices of tickets allow customers to fly further). Lastly, as Kjos says, they will have very efficient aircraft and low cost structure that should allow them to undercut competitors and still make money.

In the last ten years, I have had no family members in Norway that have gone to NYC even though they had the option of UA/CO and SK (and connecting), yet they didn't go, often due to the price of going to LON, CDG, BER, BCN (etc.) being much cheaper. But, since DY announced JFK, I've had two different families book to go. DY has made the whole nation know that they fly there, and they do it cheaply, unlike SK.

-CXfirst
 
chieft
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RE: A350 & 787 Only Way Low Cost Long Haul Can Work...

Thu Jun 13, 2013 2:55 pm

Long haul LCC isn't new at all.

Think about Freddie lakers Skytrain.
Or all the leisure airlines offering long haul flights. They are all doing long haul more or less successful. Remember Britannia Airways flying with a high-denisty B767-200 all the way down to Australia. It can still work. The nature of an LCC is a high aircraft utilisation per day. That is achievable on long haul.

The basic nature of an LCC is to bring people from A to B at the lowest possible price, without frills.

Well, the question is, if an IFE or WiFi are frills.
Basically the maintenance for it costs too. On the other hand you could charge the use of it and you'll find out, that people don't use it if it costs extra. Then you have unnecessary weight and costs. A pure LCC concept on long haul has to quetion all these bits and pieces.

[Edited 2013-06-13 08:02:30]
Aircraft are marginal costs with wings.
 
Aither
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RE: A350 & 787 Only Way Low Cost Long Haul Can Work...

Thu Jun 13, 2013 3:10 pm

New generation aircraft only compensate the cost increase of energy. Imagine what would be air travel with the same aircraft fuel burn performance as 30 years ago...
Never trust the obvious
 
waly777
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RE: A350 & 787 Only Way Low Cost Long Haul Can Work...

Thu Jun 13, 2013 4:47 pm

Quoting chieft (Reply 5):
The nature of an LCC is a high aircraft utilisation per day. That is achievable on long haul.

I'm genuinely curious as to how this is possible? Taking distances (hence time spent in the air), turnaround times, time zone differences and flight/cabin crew time limitations into consideration.
The test of first-rate intelligence is the ability to hold 2 opposed ideas in the mind concurrently, and still function
 
YULWinterSkies
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RE: A350 & 787 Only Way Low Cost Long Haul Can Work...

Thu Jun 13, 2013 9:52 pm

Quoting chieft (Reply 5):
The basic nature of an LCC is to bring people from A to B at the lowest possible price, without frills.

Not always. For instance, frills offered by WN far exceed those offered by competitors: free checked bags (up to 2!), no change fee, all tickets modifiable until 10 minutes before departure, wi-fi (for purchase) on board, drinks/snacks offer roughly similar to the legacies, similar legroom, etc... in aircraft that are often newer than those operated by legacies (I'm particularly thinking of all these loud MD80's)

LCCs target lower operating costs notably by staying away from the regional airports, eliminating the need for smaller less cost-effective planes, and allowing for much simplified fleets.

Otherwise, fare-wise, they are also pretty similar to the legacies.

Quoting chieft (Reply 5):
A pure LCC concept on long haul has to quetion all these bits and pieces.

In my opinion, LCCs on long-haul have to exceed whatever mediocre frills legacies have ended up offering. A modern IFE is a requirement. So are 2 checked bags, the possibility of emitting cheap one-way tickets, and the elimination of change fees. Food can be up for debate, but again, standards are not quite exactly high anymore....
When I doubt... go running!
 
dc9super80
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RE: A350 & 787 Only Way Low Cost Long Haul Can Work...

Thu Jun 13, 2013 11:06 pm

Quoting waly777 (Reply 7):
I'm genuinely curious as to how this is possible?

The NAS B787 crews will be based in New york and Bangkok. And the aircrafts are scheduled very cleverly and tight. Rotating between the various stations, with very little ground time and no backup aircrafts for MX delays.
An Aircraft can as an example Route JFK-ARN-BKK-CPH-JFK with only a couple of hours ground time between flights this mean a very high utilization.
 
prebennorholm
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RE: A350 & 787 Only Way Low Cost Long Haul Can Work...

Thu Jun 13, 2013 11:51 pm

Quoting gilesdavies (Thread starter):
He also talks about how it is vital they fly the most modern and up to date aircraft, and how they dispose of aircraft within 4-5 years of them being in the fleet, even though the aircraft are capable of flying for 25-30 years, they will not be profitable for them.

Words are cheap. Last summer I flew on Bjorn Kjos' airline on a 30 years old B733, which looked like at least 40 years old.
Always keep your number of landings equal to your number of take-offs
 
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TheRedBaron
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RE: A350 & 787 Only Way Low Cost Long Haul Can Work...

Fri Jun 14, 2013 4:03 am

Long haul is a different animal from short operations, just the logistics of crew and personal make it more expensive. the events of a MX problem away from base, and also a very low load on a short haul may cost you 15000 and the cost of an empty long haul operation may run several times that amount...

I think having a efficient airliner makes things easier but , there are a lot of other things involved... just see the blood bath China southern is having with their A380 and selling super cheap seats....

TRB
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TC957
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RE: A350 & 787 Only Way Low Cost Long Haul Can Work...

Fri Jun 14, 2013 7:34 am

Quoting prebennorholm (Reply 10):

The DY 733's are going and none of them are that old anyway. I think they just do the domestic runs within Norway these days. And a lot of LCC's start off with used aircraft before going to new builds.
 
waly777
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RE: A350 & 787 Only Way Low Cost Long Haul Can Work...

Fri Jun 14, 2013 7:51 am

Quoting DC9super80 (Reply 9):
The NAS B787 crews will be based in New york and Bangkok. And the aircrafts are scheduled very cleverly and tight. Rotating between the various stations, with very little ground time and no backup aircrafts for MX delays. An Aircraft can as an example Route JFK-ARN-BKK-CPH-JFK with only a couple of hours ground time between flights this mean a very high utilization.

I understand that, however how much higher utilisation can long haul lcc achieve vs the fsc? On a weekly basis, how many more journeys can a long haul aircraft with an lcc achieve vs that of an fsc. Today, fsc's already have very high utlisation on long haul aircraft....check EK's daily or even VS's utilsation.

The things which translate to higher utilisation on short haul, e.g. deboarding from 2 doors, aircraft not carrying cargo, cabin crew clearing the aircraft, quick fuel loading cos of short flight times. These all contribute to the quick turnaround times, which enables the aircraft to be used more as the flights are generally short enough to fit in additional flights. These do not work with long haul as they spend much longer in the air, they aren't built for 25 min turnarounds, not to mention the savings from quick turnarounds are minimal @ best as a majority of the cost for long haul is fuel.....hence I still struggle to see where the savings short haul lcc's get translating into long haul lcc's.
The test of first-rate intelligence is the ability to hold 2 opposed ideas in the mind concurrently, and still function
 
Kiwirob
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RE: A350 & 787 Only Way Low Cost Long Haul Can Work...

Fri Jun 14, 2013 8:33 am

Quoting CXfirst (Reply 4):
In the last ten years, I have had no family members in Norway that have gone to NYC even though they had the option of UA/CO and SK (and connecting), yet they didn't go, often due to the price of going to LON, CDG, BER, BCN (etc.) being much cheaper.

Bizarre I know a lot of people who have been to NYC from OSL, my brother in law and his girlfriend often go to NYC for long weekends, it's not that expensive, Norwegian fares aren't much cheaper than most other carriers including SK. I've just had a play on both websites, prices for the same day are within 200nok for a couple if you chose reserved seats and baggage on Norwegian, I assume most couples want to sit together and bring a change of clothes.

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