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SRQKEF
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Icelandair making a bid for controlling stake in TACV

Sat Nov 24, 2018 12:22 am

Just in: https://www.mbl.is/vidskipti/frettir/20 ... ofdaeyjum/

To sum it up, Icelandair Group subsidiary Loftleidir Icelandic along with a consortium of Icelandic investors has made an offer to buy a 51% share in TACV, the national carrier of the Cabo Verde islands. Last year, the two entities had an agreement that FI would help TACV restructure to boost tourism in the islands as well as potentially using its expertise at TATL connections to help build a connecting bank between Europe and S-America and/or W-Africa and N-America. Loftleidir also leased a 757 to TACV:



It'll be interesting to follow how this proceeds.
Nothing compares to taking off in an empty 757 with full thrust!
 
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FlyRow
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Re: Icelandair making a bid for controlling stake in TACV

Sat Nov 24, 2018 12:52 am

Trying the well discussed (here) business model on the EU-South America/Southern Africa market. Could work on a smaller skill i suppose.
But I don't expect it to be as large or lucrative as the EU-US market, which is just way way bigger.
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enilria
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Re: Icelandair making a bid for controlling stake in TACV

Sat Nov 24, 2018 12:54 am

I’ve never been a fan of merging with two other carriers simultaneously in the few times we have seen that, but hopefully these carriers are small enough to make it fairly easy.
 
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stl07
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Re: Icelandair making a bid for controlling stake in TACV

Sat Nov 24, 2018 1:05 am

enilria wrote:
I’ve never been a fan of merging with two other carriers simultaneously in the few times we have seen that, but hopefully these carriers are small enough to make it fairly easy.

They only have one plane. All they are doing is buying a 757
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stl07
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Re: Icelandair making a bid for controlling stake in TACV

Sat Nov 24, 2018 1:07 am

What's the point? They have a grand total of 1 plane.
Instead of typing in "mods", consider using the report function.
Love how every "travel blogger" says they will never fly AA/Ethihad again and then says it again and again on subsequent flights.
 
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c933103
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Re: Icelandair making a bid for controlling stake in TACV

Sat Nov 24, 2018 1:44 am

enilria wrote:
I’ve never been a fan of merging with two other carriers simultaneously in the few times we have seen that, but hopefully these carriers are small enough to make it fairly easy.

Taking 51% control of another carrier is not the same as merging. The most significant difference being this African island carrier will most likely remain independent after the transaction.
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LupineChemist
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Re: Icelandair making a bid for controlling stake in TACV

Sat Nov 24, 2018 1:48 am

This is an interesting double play with WW. They definitely have interesting aircraft utilization options now and can put WW's 330s running EU to S. America on a similar business model on a smaller scale while limiting overcapacity between N. America and Europe. And S. America-Europe fares are very high.

Cabo Verde has the added bonus of much lower local costs at Praia and both are in the situation where a weak currency is a huge asset since so little of their revenue will be in home country currency.

I definitely see the potential here.
 
Lapplander800
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Re: Icelandair making a bid for controlling stake in TACV

Sat Nov 24, 2018 2:30 am

c933103 wrote:
enilria wrote:
I’ve never been a fan of merging with two other carriers simultaneously in the few times we have seen that, but hopefully these carriers are small enough to make it fairly easy.

Taking 51% control of another carrier is not the same as merging. The most significant difference being this African island carrier will most likely remain independent after the transaction.


If you Google translate the OP article you will see that Loftleidir (a member of Icelandair Group as is Icelandair, the airline) is a 70% owner of a company that is bidding for the 51% share of this idea of an airline. So Icelandair Group has the potential of 36% control should this go through, partly paid for by servics already provided. Very far from a merger.

But hey if it all works out then this might.develop into a nice winter gig for Icelandair's surplus fleet and crews during low season. Have them fly French, Portuguese and Spaniards to Brazil for winter holidays. Given that Loftleidir has had a contract there for some time, I am sure they have an idea of the potential. If it doesn't work out the "Loftleidir Cabo Verde" holding company will be left without assets.
 
Lapplander800
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Re: Icelandair making a bid for controlling stake in TACV

Sat Nov 24, 2018 2:40 am

LupineChemist wrote:
This is an interesting double play with WW. They definitely have interesting aircraft utilization options now and can put WW's 330s running EU to S. America on a similar business model on a smaller scale while limiting overcapacity between N. America and Europe. And S. America-Europe fares are very high.

Cabo Verde has the added bonus of much lower local costs at Praia and both are in the situation where a weak currency is a huge asset since so little of their revenue will be in home country currency.

I definitely see the potential here.


WOW's fleet of 3 A330s currently makes a single RT to AMS and CDG every day and then 4 weekly trips to LAX hardly utilization worth bragging about. Oh... I forgot... the India flight competing against ME3... that will certainly fix that problem along with the 14% fuel savings the (4) 330-900s will provide.

Sarcasm aside I agree about the potential. Lets see first what Icelandair's risk adverse shareholders think about the WOW thing at the end of the month.
 
mjoelnir
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Re: Icelandair making a bid for controlling stake in TACV

Sat Nov 24, 2018 5:21 am

This TACV deal has been a while in the making. Icelandair has been involved in running that airline, after being asked last year by the government of the islands to help restructure the airline. Icelandair has done similar work for small airlines in other places.
There is also the idea that it would be possible to use Icelandair frames in the season that coincides with the of season in Iceland.
TACV will be run separately from Icelandair, but could use Icelandair MRO and training facilities.
 
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CARST
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Re: Icelandair making a bid for controlling stake in TACV

Sat Nov 24, 2018 9:40 am

This could be massive. MASSIVE! Megalomanic massive!

Image

Nearly all of this could be done with a 4000mi / 3500nm aircraft! Even the longest routes like CPT, JNB, SCL and EZE could be flown with an Airbus A321XLR or the B-MOM aircraft (if it ever happens). Icelandair could be dipping into the next gold mine here...

From To Distance

RAI GIG 2,537 nm
RAI GRU 2,661 nm
RAI EZE 3,584 nm
RAI SCL 3,961 nm
RAI LIM 3,575 nm
RAI UIO 3,380 nm
RAI ORG 1,950 nm
RAI REC 1,537 nm
RAI FOR 1,433 nm
RAI SAL 3,808 nm
RAI ASU 3,120 nm
LON RAI 2,461 nm
BER RAI 2,853 nm
PAR RAI 2,397 nm
MAD RAI 1,851 nm
BCN RAI 2,064 nm
FCO RAI 2,451 nm
MAN RAI 2,511 nm
MXP RAI 2,453 nm
ZRH RAI 2,517 nm
VIE RAI 2,803 nm
AMS RAI 2,613 nm
BRU RAI 2,544 nm
CPH RAI 2,952 nm
RAI ACC 1,486 nm
RAI LOS 1,658 nm
RAI LAD 2,609 nm
RAI WDH 3,288 nm
RAI CPT 3,787 nm
RAI JNB 3,894 nm
RAI DKR 349 nm
RAI TUN 2,226 nm
RAI CMN 1,401 nm
RAI TFS 873 nm
RAI ABJ 1,292 nm
RAI ALG 1,932 nm
RAI MIA 3,244 nm
RAI NYC 3,044 nm


Link to Great Circle Mapper: http://www.gcmap.com/mapui?P=RAI-GIG%0D ... S=bm&DU=nm

BTW: Most of South America to Europa (and v.v.) via RAI is more or less right on the great circle track of a direct route from Europe. That's massive!
 
a350lover
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Re: Icelandair making a bid for controlling stake in TACV

Sat Nov 24, 2018 9:53 am

As much as the project is interesting.... this same thing has also been commented before for setting up a transatlantic hub for the Southern part of the Atlantic in the Canaries. The interesting thing here is the distances to places. As we look at them, mostly all of them are doable with a narrow body plane which would be more cost competitive. However, most of the big cities where this could have potential count already with direct links to Europe without the need of a stopover in a country like Cabo Verde, which for some people wouldn't sound like too appealing. For those who do not have direct link to South America yet (mainly Scandinavia) I guess the current traditional hubs for these routes now (MAD, CDG, AMS) are still going to be very competitive when it comes to the reputation of both its airports, and its airlines. The links North-America-Europe are even less attractive due to the detour which the flight to RAI would suppose.

The traffic to South America has been less explored so far via new-hubs. The traffic is way different to the massive amount of people which cross the North Atlantic routes. Immigrants flying mainly to Spain, Italy have direct links, or I see them preferring the traditional routes via MAD/AMS. The business pax on these routes are very loyal to the consolidated brands here (Iberia/AF) even if the service isn't the most luxurious sometimes. Possibilities must be there, but I see the project quite hard to success.
 
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Eindhoven
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Re: Icelandair making a bid for controlling stake in TACV

Sat Nov 24, 2018 10:56 am

CARST wrote:
BTW: Most of South America to Europa (and v.v.) via RAI is more or less right on the great circle track of a direct route from Europe. That's massive!


Hub for VR is SID not RAI. SID has always been the largest airport in the country and main gateway. RAI is the capital but a small airport.

Rumour has been around longer that FI is replacing it's 752s with 73Ms and the 752s are going to VR.
 
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CARST
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Re: Icelandair making a bid for controlling stake in TACV

Sat Nov 24, 2018 12:30 pm

Eindhoven wrote:
CARST wrote:
BTW: Most of South America to Europa (and v.v.) via RAI is more or less right on the great circle track of a direct route from Europe. That's massive!


Hub for VR is SID not RAI. SID has always been the largest airport in the country and main gateway. RAI is the capital but a small airport.

Rumour has been around longer that FI is replacing it's 752s with 73Ms and the 752s are going to VR.


Thanks for correcting me, I wasn't aware of this. But doesn't really change what I pointed out about the Car Verde islands being so ideally located for Europe - South America, as well as North-America - Afrika routes.
 
stlgph
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Re: Icelandair making a bid for controlling stake in TACV

Sat Nov 24, 2018 1:43 pm

Hasn't Iceair already been operating a number of charters for TACV or am I thinking wrong?
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SRQKEF
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Re: Icelandair making a bid for controlling stake in TACV

Sat Nov 24, 2018 2:12 pm

stlgph wrote:
Hasn't Iceair already been operating a number of charters for TACV or am I thinking wrong?


Not charters, just wet-leasing for their regular scheduled operations since thr strategic partnership last year AFAIK.
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GCT64
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Re: Icelandair making a bid for controlling stake in TACV

Sat Nov 24, 2018 2:14 pm

a350lover wrote:
As much as the project is interesting.... this same thing has also been commented before for setting up a transatlantic hub for the Southern part of the Atlantic in the Canaries. The interesting thing here is the distances to places. As we look at them, mostly all of them are doable with a narrow body plane which would be more cost competitive. However, most of the big cities where this could have potential count already with direct links to Europe without the need of a stopover in a country like Cabo Verde, which for some people wouldn't sound like too appealing.


The same is true for most of FI's TATL routes (most have non-stop options without requiring a stop in a country like Iceland), however FI has still managed to carve out a successful niche. They are probably the best qualified to attempt the same thing in the South Atlantic.
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mjoelnir
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Re: Icelandair making a bid for controlling stake in TACV

Sat Nov 24, 2018 2:21 pm

Eindhoven wrote:
CARST wrote:
BTW: Most of South America to Europa (and v.v.) via RAI is more or less right on the great circle track of a direct route from Europe. That's massive!


Hub for VR is SID not RAI. SID has always been the largest airport in the country and main gateway. RAI is the capital but a small airport.

Rumour has been around longer that FI is replacing it's 752s with 73Ms and the 752s are going to VR.


Icelandair has been adding 737-8. 3 up to now this year. They have also added a 757-300 and a 757-200. So no 757 has been replaced by a 737 up to now. Icelandair had never more 757 in operation. Next year they will add 6 737-8 and we will perhaps see the oldest pax 757 be replaced.
 
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SRQKEF
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Re: Icelandair making a bid for controlling stake in TACV

Sat Nov 24, 2018 2:28 pm

a350lover wrote:
As much as the project is interesting.... this same thing has also been commented before for setting up a transatlantic hub for the Southern part of the Atlantic in the Canaries. The interesting thing here is the distances to places. As we look at them, mostly all of them are doable with a narrow body plane which would be more cost competitive. However, most of the big cities where this could have potential count already with direct links to Europe without the need of a stopover in a country like Cabo Verde, which for some people wouldn't sound like too appealing. For those who do not have direct link to South America yet (mainly Scandinavia) I guess the current traditional hubs for these routes now (MAD, CDG, AMS) are still going to be very competitive when it comes to the reputation of both its airports, and its airlines. The links North-America-Europe are even less attractive due to the detour which the flight to RAI would suppose.

The traffic to South America has been less explored so far via new-hubs. The traffic is way different to the massive amount of people which cross the North Atlantic routes. Immigrants flying mainly to Spain, Italy have direct links, or I see them preferring the traditional routes via MAD/AMS. The business pax on these routes are very loyal to the consolidated brands here (Iberia/AF) even if the service isn't the most luxurious sometimes. Possibilities must be there, but I see the project quite hard to success.


That's why it's crucial to first build O&D to the islands. If they manage that, and can successfully fill aircraft from a few large cities at both ends, they then have the critical mass in the system to add smaller cities to the network without nonstop links on the other end. Once that ball gets rolling, every route added on each end adds a little bit more to the network connectivity.

FI is a prime example. They started with only the largest cities/O&D destinations from KEF on both ends (JFK, BOS, MCO, YYZ vs CPH, LHR, CDG, AMS, FRA etc). Once that network was established, they slowly added other large but less obvious markets to the network (SEA, DEN, YUL vs BRU, MUC, ZRH etc). The third "wave" then consisted of adding flights to 2 seperate categories: large markets with very strong competition where FI now had the network size to compete in (ORD and SFO are both very successful adds that fall into this category) and smaller markets that have few or even no TATL options (ANC, MCI, CLE vs BGO, BLL etc). All these factors combined now mean that suddenly, each new FI route is much more likely to succeed than a few years earlier. KEF-CLE made no sense back when FI had ~5 European destinations, but connect it with 30+ European destinations and it's suddenly a very strong route for them. Routes like that can even have much higher yields than bulk routes like JFK and LHR due to the lack of competition.

This is why FI's 80 years of experience can certainly help TACV. If there's any way at all to make a successful hub operation out of SID, FI will most likely find it. If not, they can just lease the planes elsewhere or take them back into their own system. Low risk, high potential return.
Nothing compares to taking off in an empty 757 with full thrust!
 
SCQ83
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Re: Icelandair making a bid for controlling stake in TACV

Sat Nov 24, 2018 5:38 pm

Cabo Verde is gaining a lot of traction lately as a sun & holiday destination for Europeans; kind of the new Canarias. This will be useful to make flights to Europe work. There are a few international operators building hotels there http://www.themovechannel.com/magazine/ ... rism-boom/
 
Galwayman
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Re: Icelandair making a bid for controlling stake in TACV

Sat Nov 24, 2018 6:26 pm

Really really interesting development . Cabo Verde makes an excellent transfer hub between the Americas , Europe and Africa
 
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spinkid
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Re: Icelandair making a bid for controlling stake in TACV

Sat Nov 24, 2018 6:45 pm

SCQ83 wrote:
Cabo Verde is gaining a lot of traction lately as a sun & holiday destination for Europeans; kind of the new Canarias. This will be useful to make flights to Europe work. There are a few international operators building hotels there http://www.themovechannel.com/magazine/ ... rism-boom/


As it develops. They can start offering "free stopovers"| and replicate the model they use in Iceland.

My mother visited there around 1986 when it was a stop from JFK- to CPT on South African. She loved it. There is also a good sized Cape Verdean community in and around Boston. With such little in terms of non stops to Africa. There are a number of cities that would benefit from a one stop connection here vs. somewhere in Europe.
 
SCQ83
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Re: Icelandair making a bid for controlling stake in TACV

Sat Nov 24, 2018 6:50 pm

spinkid wrote:
My mother visited there around 1986 when it was a stop from JFK- to CPT on South African. She loved it. There is also a good sized Cape Verdean community in and around Boston. With such little in terms of non stops to Africa. There are a number of cities that would benefit from a one stop connection here vs. somewhere in Europe.


Also in Portugal for obvious reasons. But (as it happens with migrants from Portuguese colonies in Portugal) once they get their EU passport, they will move to a wealthier country with significant Portuguese population, like France, Switzerland or Luxembourg.
 
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ACCS300
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Re: Icelandair making a bid for controlling stake in TACV

Sat Nov 24, 2018 7:21 pm

Looks like Binter got right in-there and established themselves as the largest inter-island airline in Cape Verde ( est. 2014 ), far more dominant a player than TACV. Looks like they're using their great success in the Canaries to establish themselves in Cape Verde.
 
AirbusOnly
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Re: Icelandair making a bid for controlling stake in TACV

Sat Nov 24, 2018 7:42 pm

There are currently already 2 Icelandair B 757, TF-FII and TF-FIJ , flying for VR, since TF-FIW is chartered out to Abercrombie & Kent and Captains Choice
 
a350lover
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Re: Icelandair making a bid for controlling stake in TACV

Sat Nov 24, 2018 8:00 pm

GCT64 wrote:
They are probably the best qualified to attempt the same thing in the South Atlantic.


Sure they are. Since that's the reason to exist for Icelandair, this would be just replicating its own model, so they are probably the ones more likely to successfully do so. But like you said, first some O&D traffic to the islands would be needed, which at this stage I believe must be too limited. At the moment, RAI airport only sees a limited amount of international EU/American flights, linking Praia with Lisbon, Amsterdam (seasonal, I believe) and Boston which launched this June.

You would agree on something with me. We can't compare the matureness and volumes of the North-Atlantic market to the South-American corridors. Iceland actually played a a very logical role as the only possibility to fly across the ocean when planes would not be able to do so non-stop. When this was the case, to fly to South America planes would stop in Dakar, or in Western Sahara before making its way to Natal in Brazil.

On top of all that, Icelandair is the national carrier of one of the richest countries in the World when you analyze the per capita. That changes a little bit the scenario at an economic level.

Clearly at the geographical level, RAI is very strategically located and Icelandair is the perfect player to explore its possibilities.
 
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Re: Icelandair making a bid for controlling stake in TACV

Sat Nov 24, 2018 8:41 pm

a350lover wrote:
Sure they are. Since that's the reason to exist for Icelandair, this would be just replicating its own model, so they are probably the ones more likely to successfully do so. But like you said, first some O&D traffic to the islands would be needed, which at this stage I believe must be too limited. At the moment, RAI airport only sees a limited amount of international EU/American flights, linking Praia with Lisbon, Amsterdam (seasonal, I believe) and Boston which launched this June.

You would agree on something with me. We can't compare the matureness and volumes of the North-Atlantic market to the South-American corridors. Iceland actually played a a very logical role as the only possibility to fly across the ocean when planes would not be able to do so non-stop. When this was the case, to fly to South America planes would stop in Dakar, or in Western Sahara before making its way to Natal in Brazil.

On top of all that, Icelandair is the national carrier of one of the richest countries in the World when you analyze the per capita. That changes a little bit the scenario at an economic level.

Clearly at the geographical level, RAI is very strategically located and Icelandair is the perfect player to explore its possibilities.


As has already been mentioned before, the main hub for TACV isn't Praia, it's Sal. And Sal sees a whole lot more traffic than Praia.

Attracting visitors to Cape Verde isn't that difficult, it's known as the land of the eternal summer. With beautiful beaches they're bound to attract a good number of sun worshipers. Even the Canary islands tend to get a bit chilly in the winter, but the Cape Verde islands don't. For Europeans this is a good reason for visiting Cape Verde. The South American end of the line would be a bit more problematic, but the historical links should help. Both Cape Verde and Brazil were Portuguese colonies in the past, ships from Portugal to Brazil often stopped in Cape Verde.
 
a350lover
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Re: Icelandair making a bid for controlling stake in TACV

Sat Nov 24, 2018 8:58 pm

PatrickZ80 wrote:
Attracting visitors to Cape Verde isn't that difficult, it's known as the land of the eternal summer. With beautiful beaches they're bound to attract a good number of sun worshipers.


That is something Cape Verde has not in common with Iceland, for sure. lol

I just used RAI to continue with the example pointed out by the poster who included a potential map of airlinks from Cape Verde to Europe and the Americas. Even if we consider Sal relatively most developed on its international routes, most of them just reliy on purely tourism-many of them just seasonal. To me, that is a weakness compared to the hub which is/has always been Keflavik. Although KEF also relies on leisure pax, it attracts O&D traffics year round of a likely higher expenditure.

Again, to me the pax profile of this corridors Europe-South America is way way different than the same traveling the North-Atlantic market. I don't wanna say they are less attractive, for sure, but probably less corporative, less opened to new routings?

Of course we don't know what type of airline do they aim to be with this project. Thinking of an operation with narrow-body planes, for some reason it makes one think they might deploy a low cost network of links between Europe and South America. That would be revolutionary and truly new, sure.
 
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PatrickZ80
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Re: Icelandair making a bid for controlling stake in TACV

Sat Nov 24, 2018 11:18 pm

I suppose this is what their route network could one day look like:

Image

All of these destinations are within reach with a 757 or 737MAX. Quite some potential I would say.
 
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Aisak
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Re: Icelandair making a bid for controlling stake in TACV

Sun Nov 25, 2018 12:59 am

PatrickZ80 wrote:
Attracting visitors to Cape Verde isn't that difficult, it's known as the land of the eternal summer. With beautiful beaches they're bound to attract a good number of sun worshipers. Even the Canary islands tend to get a bit chilly in the winter, but the Cape Verde islands don't. For Europeans this is a good reason for visiting Cape Verde. The South American end of the line would be a bit more problematic, but the historical links should help. Both Cape Verde and Brazil were Portuguese colonies in the past, ships from Portugal to Brazil often stopped in Cape Verde.


But the Canaries have some advantages over Cape Verde. No borders within the Schengen Area, hasslefree inmigration for the rest of EU citizens, the use of the Euro common currency and no roaming charges for EU users.
Knowing Portuguese is the official language (although per wiki, not the most used language), it could be said tourism could be easier with the same language, but the Azores are just not that far North.

One the other hand using Cape Verde as a transit hub could be good to link ALL major Portuguese airports one-stop to the principal Brazilian cities.
If they get some O/D thanks to a free stopover, then fine with it.
Then grow the network to Spain and other European destinations and neighboring LatAm countries, but for starters linking the main two Portuguese speaking countries seems like a good place to start.
 
Samrnpage
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Re: Icelandair making a bid for controlling stake in TACV

Sun Nov 25, 2018 4:22 am

What are the facilities like at Sal? Could it support an operation like the the ones being proposed by others here?
 
SCQ83
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Re: Icelandair making a bid for controlling stake in TACV

Sun Nov 25, 2018 6:24 am

Aisak wrote:
But the Canaries have some advantages over Cape Verde. No borders within the Schengen Area, hasslefree inmigration for the rest of EU citizens, the use of the Euro common currency and no roaming charges for EU users.
Knowing Portuguese is the official language (although per wiki, not the most used language), it could be said tourism could be easier with the same language, but the Azores are just not that far North.


Azores is a not a sun / beach destination.

Canarias is obviously way way bigger as a sun market and more developed, but what you said about Cape Verde can be said about places like Hurghada or Agadir and European tourists flock there (and in CV you are unlikely to have any kind of terror-related attack). So while CV is unlikely to ever become a new "Canarias" in terms of hotel infrastructure or route development, it has a lot of untapped potential. And this is good for Icelandair and Cabo Verde Airlines because it means that if they build new hotels and open new routes, those planes will be filled. IMO Cabo Verde has way more potential than Azores, which will be always be a niche "bio tourist" destination. Something like Gran Canaria VS La Palma.

For instance, the very-Spanish Meliá Group is building three hotel resorts in CV: https://anacao.cv/2016/11/01/24988/

Será um resort composto pelos hotéis Meliá Lusofonia Resort & Spa, Meliá Lusofonia e Meliá Lusofonia Residences, de 320, 150 e 130 quartos, respectivamente, que vão abrir entre 2019 e 2020, após a conclusão das obras de construção.


I also imagine that with the right air route development, it could become an attractive holiday destination for wealthy Africans and Brazilians.

Btw what happened with Joao Pessoa and Natal? Those were such odd routes. According to Wikipedia, they are no longer operating.

viewtopic.php?t=590099

https://en.wikipedia.org/wiki/Am%C3%ADl ... al_Airport

https://en.wikipedia.org/wiki/Nelson_Ma ... al_Airport
 
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Re: Icelandair making a bid for controlling stake in TACV

Sun Nov 25, 2018 6:59 am

PatrickZ80 wrote:
a350lover wrote:
Sure they are. Since that's the reason to exist for Icelandair, this would be just replicating its own model, so they are probably the ones more likely to successfully do so. But like you said, first some O&D traffic to the islands would be needed, which at this stage I believe must be too limited. At the moment, RAI airport only sees a limited amount of international EU/American flights, linking Praia with Lisbon, Amsterdam (seasonal, I believe) and Boston which launched this June.

You would agree on something with me. We can't compare the matureness and volumes of the North-Atlantic market to the South-American corridors. Iceland actually played a a very logical role as the only possibility to fly across the ocean when planes would not be able to do so non-stop. When this was the case, to fly to South America planes would stop in Dakar, or in Western Sahara before making its way to Natal in Brazil.

On top of all that, Icelandair is the national carrier of one of the richest countries in the World when you analyze the per capita. That changes a little bit the scenario at an economic level.

Clearly at the geographical level, RAI is very strategically located and Icelandair is the perfect player to explore its possibilities.


As has already been mentioned before, the main hub for TACV isn't Praia, it's Sal. And Sal sees a whole lot more traffic than Praia.

Attracting visitors to Cape Verde isn't that difficult, it's known as the land of the eternal summer. With beautiful beaches they're bound to attract a good number of sun worshipers. Even the Canary islands tend to get a bit chilly in the winter, but the Cape Verde islands don't. For Europeans this is a good reason for visiting Cape Verde. The South American end of the line would be a bit more problematic, but the historical links should help. Both Cape Verde and Brazil were Portuguese colonies in the past, ships from Portugal to Brazil often stopped in Cape Verde.


Praia is more important to traffic coming from New England, since traffic is more VFR than tourism.

Also since we've immediately launched into speculation about expansion, I bet there's a few Brazilians who might want to pay an extended visit to cape verde, considering how terrified academics there are currently.
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AsoRock
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Re: Icelandair making a bid for controlling stake in TACV

Sun Nov 25, 2018 3:36 pm

This is a brilliant idea and can ride on Cabo Verde's booming tourism industry as well (2.2+ million tourists in 2017 alone) . But what I am inclined to think is that this is a major investment, starting with a small yet brand new fleet properly configured for long-haul low-fare travel, this project would need to start operating at a loss for a few years before firmly developing a brand and profits roll-in.
Look at Rwandair (if you are familiar with them), developed a reasonable modern fleet of aircraft, superb service, reliable schedule and a brand emerged out of nowhere in Africa. The airline is yet to turn a profit though, which I'm sure if well run will soon happen. I really hope Icelandair goes through with this as a new source of growth, away from the mature and highly competitive North Atlantic market.
 
a350lover
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Re: Icelandair making a bid for controlling stake in TACV

Sun Nov 25, 2018 3:56 pm

SRQKEF wrote:
FI is a prime example. They started with only the largest cities/O&D destinations from KEF on both ends (JFK, BOS, MCO, YYZ vs CPH, LHR, CDG, AMS, FRA etc). Once that network was established, they slowly added other large but less obvious markets to the network (SEA, DEN, YUL vs BRU, MUC, ZRH etc). The third "wave" then consisted of adding flights to 2 seperate categories: large markets with very strong competition where FI now had the network size to compete in (ORD and SFO are both very successful adds that fall into this category) and smaller markets that have few or even no TATL options (ANC, MCI, CLE vs BGO, BLL etc). All these factors combined now mean that suddenly, each new FI route is much more likely to succeed than a few years earlier. KEF-CLE made no sense back when FI had ~5 European destinations, but connect it with 30+ European destinations and it's suddenly a very strong route for them. Routes like that can even have much higher yields than bulk routes like JFK and LHR due to the lack of competition.


The main difference which I see here is the economies of those city pairs via the KEF hub. JFK, BOS, YYZ, CPH, LHR, CDG, AMS, FRA, SEA, DEN, MUC, ZRH, ANC, MCI, BGO or BLL all offer to FI premium markets at both ends. That stimulates demand in a different way I believe. South American air market is different.
 
a350lover
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Re: Icelandair making a bid for controlling stake in TACV

Sun Nov 25, 2018 3:57 pm

Aisak wrote:
the Canaries have some advantages over Cape Verde. No borders within the Schengen Area, hasslefree inmigration for the rest of EU citizens, the use of the Euro common currency and no roaming charges for EU users.
Knowing Portuguese is the official language (although per wiki, not the most used language), it could be said tourism could be easier with the same language, but the Azores are just not that far North.


Very good point.
 
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SRQKEF
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Re: Icelandair making a bid for controlling stake in TACV

Sun Nov 25, 2018 4:05 pm

a350lover wrote:
SRQKEF wrote:
FI is a prime example. They started with only the largest cities/O&D destinations from KEF on both ends (JFK, BOS, MCO, YYZ vs CPH, LHR, CDG, AMS, FRA etc). Once that network was established, they slowly added other large but less obvious markets to the network (SEA, DEN, YUL vs BRU, MUC, ZRH etc). The third "wave" then consisted of adding flights to 2 seperate categories: large markets with very strong competition where FI now had the network size to compete in (ORD and SFO are both very successful adds that fall into this category) and smaller markets that have few or even no TATL options (ANC, MCI, CLE vs BGO, BLL etc). All these factors combined now mean that suddenly, each new FI route is much more likely to succeed than a few years earlier. KEF-CLE made no sense back when FI had ~5 European destinations, but connect it with 30+ European destinations and it's suddenly a very strong route for them. Routes like that can even have much higher yields than bulk routes like JFK and LHR due to the lack of competition.


The main difference which I see here is the economies of those city pairs via the KEF hub. JFK, BOS, YYZ, CPH, LHR, CDG, AMS, FRA, SEA, DEN, MUC, ZRH, ANC, MCI, BGO or BLL all offer to FI premium markets at both ends. That stimulates demand in a different way I believe. South American air market is different.


On the other hand, S-America to Europe is probably overpriced as it is. A cheaper option between the largest cities, if correctly advertised, might very well sway people to an option with a quick stop enroute. The key is managing the potential bank system very carefully because connections must all be 1-2 hrs at most so it doesn't add too much time to the journey vs nonstop flights.
Nothing compares to taking off in an empty 757 with full thrust!
 
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enilria
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Re: Icelandair making a bid for controlling stake in TACV

Sun Nov 25, 2018 4:14 pm

Lapplander800 wrote:
But hey if it all works out then this might.develop into a nice winter gig for Icelandair's surplus fleet and crews during low season.

If there is that level of integration it's as good as merged.
 
mjoelnir
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Re: Icelandair making a bid for controlling stake in TACV

Sun Nov 25, 2018 7:33 pm

I assume Icelandair will move slowly. Now we are talking 1 or 2 757-200 owned by TACV and perhaps 1 or 2 on wet lease from Icelandair in the winter.
Icelandair should have some good information regarding that business having been running TACV for more than a year for the government on the Capo Verde Islands.

There is also competition. There are already flights to North and South America, Europe and Africa.
 
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PatrickZ80
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Re: Icelandair making a bid for controlling stake in TACV

Sun Nov 25, 2018 7:39 pm

mjoelnir wrote:
There is also competition. There are already flights to North and South America, Europe and Africa.


True, however what that competition doesn't offer but TACV can offer are connections in Cape Verde. For all of those competing airlines Cape Verde is a destination, not a hub. This means the best you can do is self-transfer whilst TACV can offer you an arranged transfer.
 
asuflyer
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Re: Icelandair making a bid for controlling stake in TACV

Sun Nov 25, 2018 8:12 pm

Samrnpage wrote:
What are the facilities like at Sal? Could it support an operation like the the ones being proposed by others here?


Space at SID is very limited, they only have about 5 hardstands.

SID will never become like KEF, at least not for now. Cape Verde's parliament debated this last week, as the issue of air transport has become a crisis in the country. TACV's debt is approximately 7% of Cape Verde's GDP.

The first priority for the government is to ensure the inter-island services are continued, served currently by Binter and Sevenair. However, Binter has threatened to cut service in Cape Verde in January 2019, as the government mandated a 2.3% reduction in inter-island services. The second is having Cabo Verde Airlines officially restart is another, as FI is operating their services entirely. The former TACV employees have protested outside their former offices, demanding their jobs back. At this point, FI has operated TACV flights since late 2017. FI probably will only base 2-3 aircraft at the beginning, beyond the current 1. Their only 757's D4-CCF has gone to TPA reportedly for maintenance. Hopefully, they can look to expand beyond the existing services serving the VFR and capture more of the growing tourist market to Cape Verde.
 
Blerg
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Re: Icelandair making a bid for controlling stake in TACV

Sun Nov 25, 2018 9:34 pm

Generally speaking, how big is demand between Africa and South America?
 
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spinkid
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Re: Icelandair making a bid for controlling stake in TACV

Sun Nov 25, 2018 10:36 pm

In the second proposed route map. I'm not so sure about CAY and BDA, let alone St. Helena........unless they suddenly decide to ramp up their tourist industry exponentially.
 
mjoelnir
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Re: Icelandair making a bid for controlling stake in TACV

Sun Nov 25, 2018 11:11 pm

PatrickZ80 wrote:
mjoelnir wrote:
There is also competition. There are already flights to North and South America, Europe and Africa.


True, however what that competition doesn't offer but TACV can offer are connections in Cape Verde. For all of those competing airlines Cape Verde is a destination, not a hub. This means the best you can do is self-transfer whilst TACV can offer you an arranged transfer.


But one base point for FI in KEF is O&D and FI in KEF needs O&D plus transfer pax to fill their flights.

Nobody should forget that FI has been growing there operation slowly for a long time adding only a few destination each year. Such a connection net is not build overnight.
 
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SRQKEF
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Re: Icelandair making a bid for controlling stake in TACV

Sun Nov 25, 2018 11:35 pm

mjoelnir wrote:
PatrickZ80 wrote:
mjoelnir wrote:
There is also competition. There are already flights to North and South America, Europe and Africa.


True, however what that competition doesn't offer but TACV can offer are connections in Cape Verde. For all of those competing airlines Cape Verde is a destination, not a hub. This means the best you can do is self-transfer whilst TACV can offer you an arranged transfer.


But one base point for FI in KEF is O&D and FI in KEF needs O&D plus transfer pax to fill their flights.

Nobody should forget that FI has been growing there operation slowly for a long time adding only a few destination each year. Such a connection net is not build overnight.


Absolutely. If, and it's a big if, FI decide to make a connecting hub out of SID it'll be at least a 15-20 year process.
Nothing compares to taking off in an empty 757 with full thrust!
 
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aemoreira1981
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Re: Icelandair making a bid for controlling stake in TACV

Mon Nov 26, 2018 3:05 am

It's not so much links from the north that could be the problem, but links to Africa that I see, other than to South Africa. What this could do, however, is crimp the non-stops between JNB and North America, on which DL (ATL-JNB) and SA (JFK-JNB) are currently unchallenged. Icelandair could easily pitch this to North Americans as a sun destination. The obvious places to start, in my opinion, are areas with a significant Portuguese or African diaspora, such as BOS and EWR/JFK to SID (JFK/EWR year-round, BOS winter seasonal to start). Both are within reach of the MAX 8, but the B752 would be the ideal aircraft for both in terms of fuel planning. On the African end, however, one would likely need a wide-body for JNB (with an Airlink or Comair codeshare), such as the Boeing 767-300ER if anyone else is retiring 767-300ER planes before they can be snatched up by freight forwarders...a place to look at might be the El Al or older LATAM B763 fleet (the latter having GE engines - the former having PW engines).

Rome wasn't built in a day, and FI would likely be very deliberate...hence why I see South Africa and western Africa (i.e., DSS, LFW, ABJ, LOS) as the place to start and the best place to start on the African end. This could also take away traffic from DL (and ET) and its African destinations, as unlike South Africa, western Africa can be reached with the 757 or even 737 MAX 8.

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