PatrickZ80 wrote:skipness1E wrote:If you have ambitions to be a major player you need to be on core routes with high volume and yield
Wrong! High volume and yield don't go hand in hand, certainly not in markets with heavy competition like London. Norwegian may have high load factors out of London, but their yields are trash. The competition is crushing them.
Norwegian is a LCC, although they sometimes seem to forget that. Management for a LCC is very different from management for a legacy airline. The thing that attracts passengers to Norwegian is not convenience or service, it's the lowest ticket price. Therefor they should constantly ask themselves, where (and how) can that lowest ticket price be offered. Obviously it can't be offered in high-cost markets, those high costs are the reason they have to ask higher fares than they should. In low-cost markets, they can charge lower fares and still make a higher profit due to the absence of high costs.
If the fares are low enough, the passengers will come naturally. Of course they'll not all be locals, therefor a good feeder network is important. Not every route needs to be served non-stop, sometimes serving it one-stop makes more sense. That way you get one full plane instead of two half-full planes which reduces costs.
God this is painful. Again.
Patrickz80 it’s great to be an amateur enthusiast but at least school yourself in the basics before your next long post on the LCC market.
Europe to north america is intensely seasonal, the only way to try and pay off the costs of the new Dreamliners is to fill as many seats at a decent price as possible whilst keeping costs down. If the competition engages in your price war, you won’t make enough in high yield summer to get you through the depths of winter. This is where DY are now at, what many years ago killed Laker Airways in Feb 1982. In your model, the niche lesser served markets which you cannot name, cos they are usually unserved for very good reasons, won’t support 787s outwith summer peak even in good years. So you are advocating an unfocussed strategy of somehow feeding hubs with connections, at the lowest cost possible, remebering that hubbing is actually a substantial additional cost to a low-cost model. In your niche-hub, you have no 787s now, but 737/A321 models flying at the lowest possible cost, using a hubbing higher cost business model in unproven, low volume niche ling haul markets which won’t support a wide body and die a death fron Nov-Mar.
DY tried to balance out this by opening LGW-SIN, which has tanked very badly. EZE and South America remain underserved from London but the focus remains on N America cos they can at least fill an aeroplane, albeit at a loss.
As for yields being trash, well LCCs can make good yields. Try booking FR or EZY as departure date approaches. Ryanair are consistently VERY profitable. They also don’t hub, nor do EZY.
So my question to you is, given you cannot fill the 787s in your niche LCC business model, what do you do with 13+ LGW based wide bodies in 2019 to save the business?
You cannot double drop via the UK without rescreening the whole aeroplane btw, and any aircraft landing in the US needs everyone cleared at the first port of entry. Double drops are expensive and time consuming nowadays.