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Dieuwer
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LEVEL (airlines) struggling?

Tue Jan 28, 2020 7:29 pm

Not sure what's going on but LEVEL just recently cancelled ORY-BOS and ORY-LAS before they even started. It almost feels like LEVEL is another Primera: cancelling routes before they even started. Is this the start of another round of EU LCC airlines dropping like dead flies to the ground?

The Age of the Low-Cost TATL service is clearly over (WOW, Primera, Thomas Cook, etc.). https://www.reuters.com/article/us-euro ... SKBN1ZD1I3
 
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gatibosgru
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Re: LEVEL (airlines) struggling?

Tue Jan 28, 2020 7:30 pm

Maybe they could use the planes more profitably elsewhere?
@DadCelo
 
Rossiya747
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Re: LEVEL (airlines) struggling?

Tue Jan 28, 2020 7:35 pm

wtf i will be on jfk-bcn and bcn-jfk in february
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Thibault973
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Re: LEVEL (airlines) struggling?

Tue Jan 28, 2020 7:37 pm

Dieuwer wrote:
Not sure what's going on but LEVEL just recently cancelled ORY-BOS and ORY-LAS before they even started. It almost feels like LEVEL is another Primera: cancelling routes before they even started. Is this the start of another round of EU LCC airlines dropping like dead flies to the ground?

The Age of the Low-Cost TATL service is clearly over (WOW, Primera, Thomas Cook, etc.). https://www.reuters.com/article/us-euro ... SKBN1ZD1I3


Flights to LAS from Paris started back in October and apparently loads have been abysmal. Why the choose to start these in the dead middle of winter, I don't know. Apparently the 3rd 332 will stay based at ORY and will be used to up capacity on their routes to the PTP and FDF. Thing is I've heard that they are also struggling on these but the demise of SE might have changed things up.
 
Rossiya747
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Re: LEVEL (airlines) struggling?

Tue Jan 28, 2020 7:37 pm

I don't think Level will fold because it is part of IAG. None of the airlines you mentioned were part of a large airline conglomerate, save for Thomas Cook, kind of.
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Nicknuzzii
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Re: LEVEL (airlines) struggling?

Tue Jan 28, 2020 7:45 pm

Seems like some of the aircraft will actually be used for EWR - ORY. The route was initially 4x weekly but now is 6x for most of July and August and daily for June.
 
MIflyer12
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Re: LEVEL (airlines) struggling?

Tue Jan 28, 2020 7:54 pm

Dieuwer wrote:
Not sure what's going on but LEVEL just recently cancelled ORY-BOS and ORY-LAS before they even started. It almost feels like LEVEL is another Primera: cancelling routes before they even started. Is this the start of another round of EU LCC airlines dropping like dead flies to the ground?

The Age of the Low-Cost TATL service is clearly over (WOW, Primera, Thomas Cook, etc.). https://www.reuters.com/article/us-euro ... SKBN1ZD1I3


One obvious failing in your comparison is that WOW, Primera and Thomas Cook were independent carriers, not a subsidiary of deep-pocketed IAG. As such, treasury functions - like lines of credit - are more stable.
 
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Polot
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Re: LEVEL (airlines) struggling?

Tue Jan 28, 2020 8:15 pm

Rossiya747 wrote:
wtf i will be on jfk-bcn and bcn-jfk in february

It’s not like Level will suddenly collapse with all fights cancelled and people left out to dry overnight. As part of IAG if losses become too much to bear the airline would just be wind down over time in an orderly fashion
 
dtremit
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Re: LEVEL (airlines) struggling?

Tue Jan 28, 2020 8:16 pm

Rossiya747 wrote:
I don't think Level will fold because it is part of IAG.


It may not fold, but it could end up consolidated, given the Air Europa acquisition and IAG's frankly confused continental strategy.
 
Lufthansa
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Re: LEVEL (airlines) struggling?

Tue Jan 28, 2020 8:21 pm

What is the point of even having level? IAG already has a large LCC brand in Vueling why not leverage off that instead?
 
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PatrickZ80
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Re: LEVEL (airlines) struggling?

Tue Jan 28, 2020 8:22 pm

Dieuwer wrote:
The Age of the Low-Cost TATL service is clearly over


Quite the opposite, I'd say it's slowly getting shape.

Norwegian is in the middle of a reform process and finally making profit. Too early to say if they'll make it, but chances are looking good for them. On the other side of the planet we got AirAsia X and Scoot operating low-cost long haul flights. They're quite successful. If it can be done there, it can be done in other places as well.

I admit, low-cost long haul is a niche market that is easy to overserve. Also low-cost passengers are different from passengers on legacy airlines and it takes another way of thinking to make this profitable. The low-cost long haul airlines from the past have all made several mistakes in this and still the golden formula hasn't been found. But I'm sure it's there.
 
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Polot
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Re: LEVEL (airlines) struggling?

Tue Jan 28, 2020 8:24 pm

PatrickZ80 wrote:
Norwegian is in the middle of a reform process and finally making profit. Too early to say if they'll make it, but chances are looking good for them. On the other side of the planet we got AirAsia X and Scoot operating low-cost long haul flights. They're quite successful. If it can be done there, it can be done in other places as well.

I don’t know enough about Scoot but I’m not sure I would label AirAsia X as “quite successful”. It is surviving purely on AirAsia’s short haul money.
Last edited by Polot on Tue Jan 28, 2020 8:25 pm, edited 1 time in total.
 
Detroit313
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Re: LEVEL (airlines) struggling?

Tue Jan 28, 2020 8:24 pm

Too many brands. No need for both Level and Vueling. Make both Air Europa!
 
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PatrickZ80
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Re: LEVEL (airlines) struggling?

Tue Jan 28, 2020 8:28 pm

Lufthansa wrote:
What is the point of even having level? IAG already has a large LCC brand in Vueling why not leverage off that instead?


There are two reasons for this.

First is that Vueling kind of has a bad name for lots of delays. Specially in the high season this is not uncommon. What good would it do to use a damaged brand name? In remote destinations they'd have to build up brand awareness anyway, regardless if it would have been for Vueling or for Level. In Europe they chose to build it up new as well, unrelated to Vueling.

The other is that they got an agreement with the unions that limit the size of Vueling relative to the legacy airlines within the group. Wages at Vueling are lower, but the unions only accept a certain percentage of all staff working against that lower wage. For long haul operations they'd need more staff which would not be allowed. By using Level instead of Vueling they're going around this.
 
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enilria
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Re: LEVEL (airlines) struggling?

Tue Jan 28, 2020 9:01 pm

Dieuwer wrote:
Not sure what's going on but LEVEL just recently cancelled ORY-BOS and ORY-LAS before they even started. It almost feels like LEVEL is another Primera: cancelling routes before they even started. Is this the start of another round of EU LCC airlines dropping like dead flies to the ground?

The Age of the Low-Cost TATL service is clearly over (WOW, Primera, Thomas Cook, etc.). https://www.reuters.com/article/us-euro ... SKBN1ZD1I3

LEVEL only ever existed to drive Norwegian out of business. IAG also attempted to buy Norwegian to accomplish the same trick. LEVEL has basically followed Norwegian into markets. It's not unlike TED or Metrojet or Song. It's only there to defend against Norwegian. Is it losing money? DEFINITELY. The goal was never to make money. The goal was to lose less money by putting a lower cost product up against Norwegian. As soon as Norwegian is gone from markets IAG cares about, LEVEL will be gone.
 
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spinotter
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Re: LEVEL (airlines) struggling?

Tue Jan 28, 2020 9:13 pm

On December 7th last month I had a reservation BOS-BCN on Level. The flight was canceled for technical reasons, but the way we passengers were treated was nothing short of utter chaos. I never received an email for a replacement flight until I called Iberia. Not enough personnel? Inexperienced personnel? When I finally called and made a reservation for December 28th, I arrived at Logan with my bicycle and asked for a bike box, which according to the Level website had to be purchased for 20 euros at the airport. "We don't have any." I had to leave my bike at the airport and it is now lost to me. I would NEVER fly Level again.
 
Rossiya747
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Re: LEVEL (airlines) struggling?

Tue Jan 28, 2020 11:16 pm

dtremit wrote:
Rossiya747 wrote:
I don't think Level will fold because it is part of IAG.


It may not fold, but it could end up consolidated, given the Air Europa acquisition and IAG's frankly confused continental strategy.

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RainerBoeing777
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Re: LEVEL (airlines) struggling?

Tue Jan 28, 2020 11:22 pm

Air Europa could take the LEVEL base in BCN for long-haul flights, some Boeing 787 could base there and consolidate more routes in Barcelona
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Geoff1947
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Re: LEVEL (airlines) struggling?

Tue Jan 28, 2020 11:45 pm

Yes, the LEVEL brand is unlikely to survive the Air Europa acquisition by IAG.

Geoff
 
moa999
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Re: LEVEL (airlines) struggling?

Wed Jan 29, 2020 9:43 am

Polot wrote:
I don’t know enough about Scoot but I’m not sure I would label AirAsia X as “quite successful”. It is surviving purely on AirAsia’s short haul money.


Agreed

AirAsiaX has lost money the last two years and it's getting worse (despite probably doubling fares on Aus flights). It's separately listed to Air Asia Group and at all time share price lows and has deferred some 339s though still has a big order book.
Currently trying to engineer a merger with Malaysian as part of the government process

Scoot (which is now the combined Scoot/ex-Tiger narrowbody) in Singapore Airlines, has also lost money the past two years, although FY19 the loss narrowed.

Qantas hasn't expanded Jetstars fleet of 11 787s for five years, and some rumours it might reduce numbers with 321LR deliveries.

Meanwhile you've got upstart Bamboo in Vietnam buying 787s as well and reportedly trying to IPO.
 
VSMUT
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Re: LEVEL (airlines) struggling?

Wed Jan 29, 2020 11:31 am

moa999 wrote:
Polot wrote:
I don’t know enough about Scoot but I’m not sure I would label AirAsia X as “quite successful”. It is surviving purely on AirAsia’s short haul money.


Agreed

AirAsiaX has lost money the last two years and it's getting worse (despite probably doubling fares on Aus flights). It's separately listed to Air Asia Group and at all time share price lows and has deferred some 339s though still has a big order book.
Currently trying to engineer a merger with Malaysian as part of the government process

Scoot (which is now the combined Scoot/ex-Tiger narrowbody) in Singapore Airlines, has also lost money the past two years, although FY19 the loss narrowed.

Qantas hasn't expanded Jetstars fleet of 11 787s for five years, and some rumours it might reduce numbers with 321LR deliveries.

Meanwhile you've got upstart Bamboo in Vietnam buying 787s as well and reportedly trying to IPO.


Bamboo is not a low cost airline though.
 
SIVB
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Re: LEVEL (airlines) struggling?

Wed Jan 29, 2020 12:00 pm

PatrickZ80 wrote:
The other is that they got an agreement with the unions that limit the size of Vueling relative to the legacy airlines within the group. Wages at Vueling are lower, but the unions only accept a certain percentage of all staff working against that lower wage. For long haul operations they'd need more staff which would not be allowed. By using Level instead of Vueling they're going around this.


As a former Vueling employee, I’ve never heard of this. Care to provide a link to said union agreements? The only thing that limits VY somehow is codeshare, that you can find in IB pilot’s collective labour agreement= not more than 5% of VY flights out of MAD can have IB code. But there is no such restrictions at other bases (only MAD to protect IB hub), and you will find IB code in almost every single flight that VY operates (and AA and QR in some flights).

enilria wrote:
LEVEL only ever existed to drive Norwegian out of business. IAG also attempted to buy Norwegian to accomplish the same trick. LEVEL has basically followed Norwegian into markets. It's not unlike TED or Metrojet or Song. It's only there to defend against Norwegian. Is it losing money? DEFINITELY. The goal was never to make money. The goal was to lose less money by putting a lower cost product up against Norwegian. As soon as Norwegian is gone from markets IAG cares about, LEVEL will be gone.


This! +1
 
upperdeckfan
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Re: LEVEL (airlines) struggling?

Wed Jan 29, 2020 1:18 pm

Geoff1947 wrote:
Yes, the LEVEL brand is unlikely to survive the Air Europa acquisition by IAG.

Geoff


I don't see how these are related, UX has a hub in MAD and its long-haul network is focused on leisure-driven and 2nd tier cities in LATAM/caribbean.

LV is focused in NorthAm and operates out of BCN and ORY.

Besides UX and LV barely overlapping each other, they target different markets as UX is a fulll-service carrier and LV is a LCC.
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OlympicATH
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Re: LEVEL (airlines) struggling?

Wed Jan 29, 2020 1:23 pm

Not to mention that if and when the Air Europa acquisition gets approved, Air Europa is very likely going to get absorbed by Iberia. I don't see the standalone brand surviving, it wouldn't make any sense.
LEVEL is a totally different platform for IAG and it doesn't look like it's going anywhere.
 
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Aisak
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Re: LEVEL (airlines) struggling?

Wed Jan 29, 2020 10:31 pm

The thread op show “concern” about Level airlines while only one of them is mentioned in the examples. The French one rebranded from openskies. The other two seem to fulfill its purpose... while openskies is still trying to find its place.

Lufthansa wrote:
What is the point of even having level? IAG already has a large LCC brand in Vueling why not leverage off that instead?


Because Vueling is expensive to run outside Spain.

That’s what Level (Austrian = Anisec) is for. But they cannot simply replace Vueling routes as it would create some unrest in Vueling as per their Pilots union agreement.

Detroit313 wrote:
Too many brands. No need for both Level and Vueling. Make both Air Europa!

I guess it’s the same with LH Group or AFKLM... and...
RainerBoeing777 wrote:
Air Europa could take the LEVEL base in BCN for long-haul flights, some Boeing 787 could base there and consolidate more routes in Barcelona


First things first. Air Europa is not even part of IB. It is still pending regulatory approval. And remember, The Air Europa deal is with IB not IAG. The same way bmi was integrated into BA not with the rest of IAG airlines.

And there is no point in having another airline operating the BCN LongHaul base. Now it’s just IB in disguise, and as such it is just another slot at an existing IB/MAD destination with the cost advantage it brings to the formula. So no need to invoke new route/airlines approvals particularly with some latam countries or no new contract with handling and or hotels for crew rest.

SIVB wrote:
PatrickZ80 wrote:
The other is that they got an agreement with the unions that limit the size of Vueling relative to the legacy airlines within the group. Wages at Vueling are lower, but the unions only accept a certain percentage of all staff working against that lower wage. For long haul operations they'd need more staff which would not be allowed. By using Level instead of Vueling they're going around this.


As a former Vueling employee, I’ve never heard of this. Care to provide a link to said union agreements? The only thing that limits VY somehow is codeshare, that you can find in IB pilot’s collective labour agreement= not more than 5% of VY flights out of MAD can have IB code. But there is no such restrictions at other bases (only MAD to protect IB hub), and you will find IB code in almost every single flight that VY operates (and AA and QR in some flights).


That’s it. I think he is mixing up that concept with IB Express whose size is tied with the size of IB mainline.
The Vueling pilots union agreement does not say that. it says Only 5% of VY flights can be operated by airplane/crew not belonging to VY. And the flight crew must have a contract with Vueling Airlines SA(Spain), so it gets trickier with EU bases.

But you cannot just repaint Vueling planes in level colors, move the reg to Austria and hire new crew. No crew shall be made redundant and the (global) VY production must not shrink. So unless VY can find new (Spanish) home bases for those birds, no new VY EU base will be transferred to Level Austria. Just VIE (brand new) and AMS (replacing Vueling) for the time being. I guess next one will be Paris (CDG or ORY)
 
FlyHappy
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Re: LEVEL (airlines) struggling?

Wed Jan 29, 2020 10:56 pm

Polot wrote:
PatrickZ80 wrote:
Norwegian is in the middle of a reform process and finally making profit. Too early to say if they'll make it, but chances are looking good for them. On the other side of the planet we got AirAsia X and Scoot operating low-cost long haul flights. They're quite successful. If it can be done there, it can be done in other places as well.

I don’t know enough about Scoot but I’m not sure I would label AirAsia X as “quite successful”. It is surviving purely on AirAsia’s short haul money.


Bingo.
No way Scoot is a success without parent SQ's patronage and expertise.
AirAsia X, as you said, is seemingly subsidized by its short haul parent.
Norwegian too, clearly only (minimally) viable due to prior success of short haul parent, and is pretty well pinchered between EU3 and US3.

Big differences in the demographic and economic profile of potential customer base in Europe and Asia. I can't see how they relate at all (that's to PatrickZ80).
 
airbazar
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Re: LEVEL (airlines) struggling?

Wed Jan 29, 2020 11:27 pm

FlyHappy wrote:
Polot wrote:
PatrickZ80 wrote:
Norwegian is in the middle of a reform process and finally making profit. Too early to say if they'll make it, but chances are looking good for them. On the other side of the planet we got AirAsia X and Scoot operating low-cost long haul flights. They're quite successful. If it can be done there, it can be done in other places as well.

I don’t know enough about Scoot but I’m not sure I would label AirAsia X as “quite successful”. It is surviving purely on AirAsia’s short haul money.


Bingo.
No way Scoot is a success without parent SQ's patronage and expertise.
AirAsia X, as you said, is seemingly subsidized by its short haul parent.
Norwegian too, clearly only (minimally) viable due to prior success of short haul parent, and is pretty well pinchered between EU3 and US3.

Big differences in the demographic and economic profile of potential customer base in Europe and Asia. I can't see how they relate at all (that's to PatrickZ80).


But it's like that just about everywhere. In the U.S. the domestic operations subsidize the international operations (U.S. carriers are predominantly domestic). For European network carriers it's the opposite where long haul ops subsidize domestic and intra-europe ops. Airlines like any business, play to their strengths. Nothing wrong with that.
 
Dieuwer
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Re: LEVEL (airlines) struggling?

Thu Jan 30, 2020 12:46 am

Not sure if U.S. domestic operations subsidize international operations. I would think that TATL J cabins subsidize everything, considering the skyhigh airfare compared to domestic J/F and even TPAC J/F.
 
FlyHappy
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Re: LEVEL (airlines) struggling?

Thu Jan 30, 2020 5:58 am

airbazar wrote:
FlyHappy wrote:
Polot wrote:
I don’t know enough about Scoot but I’m not sure I would label AirAsia X as “quite successful”. It is surviving purely on AirAsia’s short haul money.


Bingo.
No way Scoot is a success without parent SQ's patronage and expertise.
AirAsia X, as you said, is seemingly subsidized by its short haul parent.
Norwegian too, clearly only (minimally) viable due to prior success of short haul parent, and is pretty well pinchered between EU3 and US3.

Big differences in the demographic and economic profile of potential customer base in Europe and Asia. I can't see how they relate at all (that's to PatrickZ80).


But it's like that just about everywhere. In the U.S. the domestic operations subsidize the international operations (U.S. carriers are predominantly domestic). For European network carriers it's the opposite where long haul ops subsidize domestic and intra-europe ops. Airlines like any business, play to their strengths. Nothing wrong with that.


I quite disagree. For one thing, US carriers being "predominantly domestic", is only a function of the size and richness of their domestic market.

AA has made fortunes for decades in the Latin Am markets. United in the Pacific. All continue to mint money TATL.
US carriers are driven, first and foremost by the expectations of shareholders (more so than other countries, for various reasons) - they will quickly cut low return long haul routes, and they won't even fly international long haul if it doesn't suit their profit expectations (see Southwest, Alaska, JetBlue). They really don't suffer from "prestige route" syndrome (see a.net outrage at DL cutting HKG, for example).

This thread is about Level, and the realities of low cost long haul. EU3 can use the bludgeon of seperate LCC operations to strangle weaker competition, while US3 cannot (just political reality).
Asia is completely different, with immature (ie, rising) markets and unestablished brands. Nobody is going to compete in China without the blessing of the CCP (lets not doubt for a moment that CN3 isn't all about building global presence, not profit), India is regulatory mess, Hong Kong is turning into an unknown, Taiwan is the "wild west" right now, Vietnam is following...... the rest of SE Asia is suspect, Singapore city-state aside. That leaves Korea and Japan as stable/major players; sure looks like Japan has the same LCC playbook with a legacy parent.

I'd say only Vietnam, Korea and maybe Taiwan have a reasonable prospect of supporting a stand alone, profitable, stable long haul LCC operation in the forseeable future.
I expect Norwegian to ultimately fail in their long haul ambitions, quite regretably, as I am a shareholder.
 
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vhtje
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Re: LEVEL (airlines) struggling?

Thu Jan 30, 2020 6:36 am

LEVEL is a low-risk strategy for IAG. Remember, it isn't a real airline - it is a virtual airline operated by other carriers within the IAG fold - Iberia (BCN base), Open Skies (ORL base) and Veuling (VIE and AMS). It is low-risk because if the venture fails, or, serves its purpose and is no longer needed, the operations can be absorbed back into the respective operating carrier's networks, at relatively very little cost to IAG.

The very fact that it was structured this way, and hasn't been moved towards obtaining its own AOC and staff, suggests to me that IAG's strategy with LEVEL isn't long-term.
I only turn left when boarding aircraft. Well, mostly. All right, sometimes. OH OKAY - rarely.
 
IrishLessor
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Re: LEVEL (airlines) struggling?

Thu Jan 30, 2020 7:44 am

Level was created to put it up to Norwegian. IAG recognised that they let loco SH particularly in the UK become the remit of Ryanair, easyJet etc. Without getting into the game in a meaningful way. In the same way IAG were not going to allow Norwegian come in to Spain and have it all. BA reformed at LGW to compete.

So Level has been on a holding pattern with a wait and see approach in terms of Norwegian, whether IAG would aquire it or not. Now with the potential opportunity to aquire AirEuropa, there likely will be some transformation.

I suspect that Air Europa will be carved up between IB and VY, with IB adopting the Madrid centred flying and BCN and others going to VY. At that juncture, it's likely we'll see Level's destiny being considered.
 
Andy33
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Re: LEVEL (airlines) struggling?

Thu Jan 30, 2020 7:56 am

vhtje wrote:
LEVEL is a low-risk strategy for IAG. Remember, it isn't a real airline - it is a virtual airline operated by other carriers within the IAG fold - Iberia (BCN base), Open Skies (ORL base) and Veuling (VIE and AMS). It is low-risk because if the venture fails, or, serves its purpose and is no longer needed, the operations can be absorbed back into the respective operating carrier's networks, at relatively very little cost to IAG.

The very fact that it was structured this way, and hasn't been moved towards obtaining its own AOC and staff, suggests to me that IAG's strategy with LEVEL isn't long-term.

Nearly right..
As far as Paris is concerned, Openskies was a small subsidiary of BA, with its own AOC and staff, before rebranding as Level. Not sure what it could get absorbed back into,
Amsterdam and Vienna both use a completely new Austrian AOC belonging to an Austrian-registered IAG subsidiary called Anisec. Vienna had no based IAG aircraft or crews at all prior to Anisec starting up under the Level brand..Amsterdam was a Vueling aircraft base, but crews were seconded from Spain not permanently based there. So there's nothing whatever to fold Vienna back into, because there was nothing before Level. Amsterdam was a Vueling experiment that didn't really work due to high crew costs, so is more likely to close altogether than be absorbed into Vueling - the crews and planes that operated for Vueling there are now elsewhere on the Vueling network.
 
Obzerva
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Re: LEVEL (airlines) struggling?

Thu Jan 30, 2020 8:00 am

If as some people suggest Air Europa is going to play a potential role within IB and IAG as a whole, when will be that start to fall in to place?
Is there a timeline for regulatory approval of Air Europa to then impact the future of Level?
 
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dutchflyboi
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Re: LEVEL (airlines) struggling?

Thu Jan 30, 2020 8:10 am

Andy33 wrote:
[quote="vhtje" Amsterdam was a Vueling experiment that didn't really work due to high crew costs, so is more likely to close altogether than be absorbed into Vueling - the crews and planes that operated for Vueling there are now elsewhere on the Vueling network.


I do not know where you get your facts about AMS being a failure due to high crew costs. Level currently pays the lowest wages in The Netherlands for crew that are based in The Netherlands. They can't find enough staff to operate the flights, due to the turnover of the staff. Is Level a failure in AMS? Sure, but not due to high crew cost.
 
Andy33
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Re: LEVEL (airlines) struggling?

Thu Jan 30, 2020 11:45 am

dutchflyboi wrote:
Andy33 wrote:
[quote="vhtje" Amsterdam was a Vueling experiment that didn't really work due to high crew costs, so is more likely to close altogether than be absorbed into Vueling - the crews and planes that operated for Vueling there are now elsewhere on the Vueling network.


I do not know where you get your facts about AMS being a failure due to high crew costs. Level currently pays the lowest wages in The Netherlands for crew that are based in The Netherlands. They can't find enough staff to operate the flights, due to the turnover of the staff. Is Level a failure in AMS? Sure, but not due to high crew cost.

The high costs were when the routes were run by Vueling, not by Level, because due to Vuelings union agreement, the crews were on Spanish pay and conditions, and remained officially based in Spain so Vueling had to pay overnight accommodation and living expenses as if they were on a night-stop. It is almost always cheaper to use locally recruited crews who simply go home when they finish a duty shift and have to pay for their own off duty meals.
 
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vhtje
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Re: LEVEL (airlines) struggling?

Thu Jan 30, 2020 12:31 pm

Andy33 wrote:
vhtje wrote:
LEVEL is a low-risk strategy for IAG. Remember, it isn't a real airline - it is a virtual airline operated by other carriers within the IAG fold - Iberia (BCN base), Open Skies (ORL base) and Veuling (VIE and AMS). It is low-risk because if the venture fails, or, serves its purpose and is no longer needed, the operations can be absorbed back into the respective operating carrier's networks, at relatively very little cost to IAG.

The very fact that it was structured this way, and hasn't been moved towards obtaining its own AOC and staff, suggests to me that IAG's strategy with LEVEL isn't long-term.

Nearly right..
As far as Paris is concerned, Openskies was a small subsidiary of BA, with its own AOC and staff, before rebranding as Level. Not sure what it could get absorbed back into,
Amsterdam and Vienna both use a completely new Austrian AOC belonging to an Austrian-registered IAG subsidiary called Anisec. Vienna had no based IAG aircraft or crews at all prior to Anisec starting up under the Level brand..Amsterdam was a Vueling aircraft base, but crews were seconded from Spain not permanently based there. So there's nothing whatever to fold Vienna back into, because there was nothing before Level. Amsterdam was a Vueling experiment that didn't really work due to high crew costs, so is more likely to close altogether than be absorbed into Vueling - the crews and planes that operated for Vueling there are now elsewhere on the Vueling network.


Well, yes, you are correct, of course, but that does not materially impact my point: LEVEL is, financially, low-risk for IAG and can easily be disbanded and dismantled when the time comes. The structure of LEVEL, which persists nearly three years after it began, suggests that IAG are not planning on keeping it.

In 2017 WW said, "Walsh says that the airline’s growth plans mean that the current structure is not sustainable, so it will transition to its own management and AOC."

Source: https://www.flightglobal.com/routes-iags-level-eyeing-30-aircraft-fleet-by-2022/125485.article

The fact that nearly two and half years on from making that statement, IAG still have not sought an AOC for LEVEL, is, I think, revealing.
I only turn left when boarding aircraft. Well, mostly. All right, sometimes. OH OKAY - rarely.
 
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LH748
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Re: LEVEL (airlines) struggling?

Thu Jan 30, 2020 1:29 pm

IAG has way too many brands that compete in the same markets.
I assume that level is going to disappear as soon as Air Europa is fully integrated and UX is going to play the low-cost longhaul role.
306 310 318 319 320 321 333 343 388 ATR72 733 737 738 739 743 744 748 752 753 763 764 772 77W 788 CRJ7 CRJ9 E170 F100 MD11 RJ1H
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VanBosch
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Re: LEVEL (airlines) struggling?

Thu Jan 30, 2020 3:56 pm

Andy33 wrote:
vhtje wrote:
LEVEL is a low-risk strategy for IAG. Remember, it isn't a real airline - it is a virtual airline operated by other carriers within the IAG fold - Iberia (BCN base), Open Skies (ORL base) and Veuling (VIE and AMS). It is low-risk because if the venture fails, or, serves its purpose and is no longer needed, the operations can be absorbed back into the respective operating carrier's networks, at relatively very little cost to IAG.

The very fact that it was structured this way, and hasn't been moved towards obtaining its own AOC and staff, suggests to me that IAG's strategy with LEVEL isn't long-term.

Nearly right..
As far as Paris is concerned, Openskies was a small subsidiary of BA, with its own AOC and staff, before rebranding as Level. Not sure what it could get absorbed back into,
Amsterdam and Vienna both use a completely new Austrian AOC belonging to an Austrian-registered IAG subsidiary called Anisec. Vienna had no based IAG aircraft or crews at all prior to Anisec starting up under the Level brand..Amsterdam was a Vueling aircraft base, but crews were seconded from Spain not permanently based there. So there's nothing whatever to fold Vienna back into, because there was nothing before Level. Amsterdam was a Vueling experiment that didn't really work due to high crew costs, so is more likely to close altogether than be absorbed into Vueling - the crews and planes that operated for Vueling there are now elsewhere on the Vueling network.



FYI - Anisec was rebranded to “Level Europe” in December.
 
CDGIAD
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Re: LEVEL (airlines) struggling?

Thu Jan 30, 2020 4:06 pm

LEVEL development in France does not make sense, first their generic name that has nothing to with an airline…

Openskies was at first business class only airline, then they moved to having Premium Y and Y but they were Premium oriented.
They were never profitable it seems.
They now operate long haul low cost from ORY for LEVEL, so they clearly lost their premium customer base.
If it was to compete with Norwegian, then that's a lost battle, Norwegian no longer operates out of Orly.
French Caribbean destinations are already extensively covered by AF, TX and SS, NYC is even more extensively covered.
If IAG wants to make good use of these slots at ORY, they should reopen the ORY-LHR flights or have IB Express adding flights to 2nd cities in Spain.
 
ethernal
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Re: LEVEL (airlines) struggling?

Thu Jan 30, 2020 5:08 pm

PatrickZ80 wrote:
Dieuwer wrote:
The Age of the Low-Cost TATL service is clearly over


Quite the opposite, I'd say it's slowly getting shape.

Norwegian is in the middle of a reform process and finally making profit. Too early to say if they'll make it, but chances are looking good for them. On the other side of the planet we got AirAsia X and Scoot operating low-cost long haul flights. They're quite successful. If it can be done there, it can be done in other places as well.

I admit, low-cost long haul is a niche market that is easy to overserve. Also low-cost passengers are different from passengers on legacy airlines and it takes another way of thinking to make this profitable. The low-cost long haul airlines from the past have all made several mistakes in this and still the golden formula hasn't been found. But I'm sure it's there.


Fundamental issue with ULCC long haul is that the economic disruption is far, far less because the market characteristics are different.

Short-haul ULCC offers a hugely differentiated value proposition because they are frequently turning two short flights (connections) into one nonstop. This means both significantly higher willingness to pay (shorter trip) and significantly lower costs (short haul has high staffing costs versus distance traveled - especially since it may be two flights). Even when looking at non-stop vs. non-stop, labor as a percentage of short haul cost is significantly higher than non-labor expenses (fuel, maintenance) because the percentage of time "in the air" is much less. So, the significantly lower labor costs relative to legacies makes a huge difference in total costs.

ULCC long haul has.. less of a value prop. Maybe you turn a trip with connections into a non-stop, but you're reducing a 12 hour trip time into a 9 hour trip time. Not as huge win so WTP isn't as high (customers are also more likely to want traditional "legacy" offerings on long haul flights - maybe a meal, and perhaps more than 28" of seat pitch). And on the cost side? Definitely still a nod to the ULCC.. but not as much. Labor as a percentage of long haul flights is less - fuel is the major cost item on long haul because the plane is burning it, and burning a lot of it, since it is flying a lot. There's less total gate staffing, and so on. Again, it's still cheaper for a ULCC, but the premium-cabin adjusted CASM differential is less in long haul than in short haul flying. In addition, a larger percentage of international flying may be consumed with taxes.

Again, not saying that ULCC long hual doesn't work. It's just going to be a much slower slog than the take-over in short haul flying - simply because the economic value prop isn't nearly as much on the willingness-to-pay and cost differential.
 
KlimaBXsst
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Re: LEVEL (airlines) struggling?

Thu Jan 30, 2020 9:16 pm

Level has minimum um, “exposure” to China.

The will be just as fine as any carrier, well as safe as any carrier during this World Health Emergency.
Aesthetically the A 340 got it right!
 
jetwet1
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Re: LEVEL (airlines) struggling?

Thu Jan 30, 2020 10:59 pm

Thibault973 wrote:
Dieuwer wrote:
Not sure what's going on but LEVEL just recently cancelled ORY-BOS and ORY-LAS before they even started. It almost feels like LEVEL is another Primera: cancelling routes before they even started. Is this the start of another round of EU LCC airlines dropping like dead flies to the ground?

The Age of the Low-Cost TATL service is clearly over (WOW, Primera, Thomas Cook, etc.). https://www.reuters.com/article/us-euro ... SKBN1ZD1I3


Flights to LAS from Paris started back in October and apparently loads have been abysmal. Why the choose to start these in the dead middle of winter, I don't know. Apparently the 3rd 332 will stay based at ORY and will be used to up capacity on their routes to the PTP and FDF. Thing is I've heard that they are also struggling on these but the demise of SE might have changed things up.


I live in Vegas, I knew nothing about an LAS-ORY flight, no promotion of it was done here, maybe if they tried to promote the flights on the US side they would stick.
 
talonone
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Re: LEVEL (airlines) struggling?

Fri Jan 31, 2020 5:16 am

dtremit wrote:
Rossiya747 wrote:
I don't think Level will fold because it is part of IAG.


It may not fold, but it could end up consolidated, given the Air Europa acquisition and IAG's frankly confused continental strategy.


Let's not mix onions with apples. Air Europa was bought by Iberia, and not by IAG.
The space and human stupidity are endless. Maybe the space is not... but the human stupidity for sure!
 
jetwet1
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Re: LEVEL (airlines) struggling?

Fri Jan 31, 2020 9:41 am

talonone wrote:
dtremit wrote:
Rossiya747 wrote:
I don't think Level will fold because it is part of IAG.


It may not fold, but it could end up consolidated, given the Air Europa acquisition and IAG's frankly confused continental strategy.


Let's not mix onions with apples. Air Europa was bought by Iberia, and not by IAG.


So Iberia spent $1.11b without the parent companies input and okay ??? Sure, that happens.
 
talonone
Posts: 57
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Re: LEVEL (airlines) struggling?

Sun Feb 02, 2020 2:14 pm

jetwet1 wrote:
talonone wrote:
dtremit wrote:

It may not fold, but it could end up consolidated, given the Air Europa acquisition and IAG's frankly confused continental strategy.


Let's not mix onions with apples. Air Europa was bought by Iberia, and not by IAG.


So Iberia spent $1.11b without the parent companies input and okay ??? Sure, that happens.


The parent companies of IAG are BAW and IB! In 2018 won around 470 million € net. Do not forget that VLG is also 48% owned by IB. It has more cash, than BAW!
And to answer to your question: Yes!
The space and human stupidity are endless. Maybe the space is not... but the human stupidity for sure!
 
ShamrockBoi330
Posts: 351
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Re: LEVEL (airlines) struggling?

Sun Feb 02, 2020 7:08 pm

talonone wrote:

The parent companies of IAG are BAW and IB! In 2018 won around 470 million € net. Do not forget that VLG is also 48% owned by IB. It has more cash, than BAW!
And to answer to your question: Yes!


What? Much confusion in that statement!

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