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chrisp390
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Joined: Fri May 16, 2014 6:37 pm

Is LEVEL Airlines A Failure?

Wed Oct 10, 2018 10:30 pm

I am checking the prices for upcoming travel from BCN, and except for LAX, the prices are around $100-$150 USD. For example, this Sunday BCN-OAK, a 13 hour flight is selling for $150. The amount Level gets is roughly half this, the rest is taxes. How on earth are they making a profit and surviving with these sort of prices? Even Norwegian on the same routes is charging much more. Is Level a failure, and they are having to resort to this sort of dumping to fill their planes?
 
dcajet
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Re: Is LEVEL Airlines A Failure?

Wed Oct 10, 2018 10:37 pm

Sorry, but you checked a few flights' pricing on a single route and that is enough for you to ask yourself if LEVEL is a failure? Have you checked their prices on the BCN-EZE route (their #1 route in terms of number of flights)? Or their services ex-Paris?
Keep calm and wash your hands.
 
PlymSpotter
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Re: Is LEVEL Airlines A Failure?

Wed Oct 10, 2018 10:37 pm

Cheap fares for reasonably imminent travel aren't necessarily a good guide to profitability. It could be that 90% of the tickets already sold have been at $300+, but that LEVEL's revenue analytics solution is telling them that heavily incentivising travel in the (for instance) 14-3 day period will result in more revenue being generated than if they didn't discount, before peaking again for the more immediate same/next day departures.

Just a thought, I've seen it with several European LCC's.
...love is just a camouflage for what resembles rage again...
 
Chasensfo
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Re: Is LEVEL Airlines A Failure?

Wed Oct 10, 2018 10:48 pm

A tad overzealous to assume that cheap fares mean the airline is in financial trouble.

United has had random sales where SFO-Asia has been $200-250 one way relatively close to the sale date. Sometimes airlines sell last minute seats cheaply, Sun Country in the USA, albeit mostly for Domestic/Mexico, used to be very big on this with "Just Wing It" fares departing on specific flights on specific dates very near the purchase date.
 
downdata
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Re: Is LEVEL Airlines A Failure?

Wed Oct 10, 2018 10:51 pm

By your logic, the US3 may fail any time now justbecause they have some cheap near term transpacific fare.
 
evanb
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Re: Is LEVEL Airlines A Failure?

Wed Oct 10, 2018 11:02 pm

Just a thought, maybe profitability isn't the goal of LEVEL, at least in the short run.
 
chrisp390
Topic Author
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Re: Is LEVEL Airlines A Failure?

Wed Oct 10, 2018 11:08 pm

It is not just one flight, or a random sale, it seems to be most of the upcoming ones I can see between BCN and the USA at least. People here talk about Norwegian being in a bad situation financially but from what I can see the fares of Level are substantially lower than Norwegian consistently, so they cannot be doing well one would assume.
 
SelseyBill
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Re: Is LEVEL Airlines A Failure?

Wed Oct 10, 2018 11:24 pm

chrisp390 wrote:
It is not just one flight, or a random sale, it seems to be most of the upcoming ones I can see between BCN and the USA at least. People here talk about Norwegian being in a bad situation financially but from what I can see the fares of Level are substantially lower than Norwegian consistently, so they cannot be doing well one would assume.


How can an airline be a failure when it doesn't actually exist ? LEVEL only actually has a ops cert for its Paris operations; (formerly the BA 'Open Skies' unit).

LEVEL is a marketing 'brand'; a 'virtual airline'; with aircraft, crews and services hired-in at BCN from IB, for which I would imagine LEVEL 'pays' IB a pre-determined amount set at a pitch to make operating overheads comparatively cheaper than DY.

Its all smoke and mirrors.....
 
reality
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Re: Is LEVEL Airlines A Failure?

Wed Oct 10, 2018 11:26 pm

evanb wrote:
Just a thought, maybe profitability isn't the goal of LEVEL, at least in the short run.


Exactly. The only reason Level flies from BCN to OAK is to put Norwegian out of business on that route. Not to make money. Seems like they have failed. Apparently they are shifting to SFO soon hoping that will do better.
 
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VS4ever
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Re: Is LEVEL Airlines A Failure?

Wed Oct 10, 2018 11:34 pm

chrisp390 wrote:
It is not just one flight, or a random sale, it seems to be most of the upcoming ones I can see between BCN and the USA at least. People here talk about Norwegian being in a bad situation financially but from what I can see the fares of Level are substantially lower than Norwegian consistently, so they cannot be doing well one would assume.


The difference here is Level is owned by IAG via IB (who provide the aircraft). IAG have deep pockets and while they have to answer to shareholders, the aim quite clearly is to provide competition to DY/DI/D8 and essentially knock them out of markets as others have said. So while by standalone metrics they may not be making money, it's a strategic play and often those are allowed a lot more latitude than mainline businesses. Think of them as incubators. Now long term if the fight against DY doesn't play out, you might see them disappear apart from the "open skies" operation or if IAG ends up buying DY, but you can't make direct comparisons because the strategy is rather different to say the least.
That feeling when you sit at the end of a runway, brakes are released and the raw power takes over. Now that is a thing of beauty and it never gets old.
 
716131
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Re: Is LEVEL Airlines A Failure?

Thu Oct 11, 2018 12:23 am

If it's about the service, I found many negative in this site:
https://www.airlinequality.com/airline-reviews/level/
If it's not Boeing, I'm not going!
 
Planeflyer
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Re: Is LEVEL Airlines A Failure?

Thu Oct 11, 2018 4:10 am

Establishing a brand in a well established market is very expensive. Norwegian is still losing money but unlike Level people outside of anet know the brand.
 
SCQ83
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Re: Is LEVEL Airlines A Failure?

Thu Oct 11, 2018 6:27 am

Barcelona is a low-cost destination targeted at low-cost tourists. Hence the low ticket prices on LEVEL. Everything is connected!
 
LupineChemist
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Re: Is LEVEL Airlines A Failure?

Thu Oct 11, 2018 8:44 am

chrisp390 wrote:
It is not just one flight, or a random sale, it seems to be most of the upcoming ones I can see between BCN and the USA at least. People here talk about Norwegian being in a bad situation financially but from what I can see the fares of Level are substantially lower than Norwegian consistently, so they cannot be doing well one would assume.


Yeah, they are part of IAG's strategy to take over Norwegian (if they started that way or not, who knows)

All of Norwegian's losses would only be a couple of percentage points with IAG, as they are just a much bigger airline. So by forcing yields lower on Norwegian's most profitable routes, they can force them to losses to force them to accept the takeover sooner. I imagine that takeover is less about low cost long haul and more about the European short haul network and using the 787s for growth in other airlines. Also a serious shot at the Finnish government about their unwillingness to sell AY.
 
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J4YC3
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Re: Is LEVEL Airlines A Failure?

Thu Oct 11, 2018 2:06 pm

LupineChemist wrote:
chrisp390 wrote:
It is not just one flight, or a random sale, it seems to be most of the upcoming ones I can see between BCN and the USA at least. People here talk about Norwegian being in a bad situation financially but from what I can see the fares of Level are substantially lower than Norwegian consistently, so they cannot be doing well one would assume.


Yeah, they are part of IAG's strategy to take over Norwegian (if they started that way or not, who knows)

All of Norwegian's losses would only be a couple of percentage points with IAG, as they are just a much bigger airline. So by forcing yields lower on Norwegian's most profitable routes, they can force them to losses to force them to accept the takeover sooner. I imagine that takeover is less about low cost long haul and more about the European short haul network and using the 787s for growth in other airlines. Also a serious shot at the Finnish government about their unwillingness to sell AY.


Setting up an airline to price dump new competitors out of BCN has been first Iberia's and now IAG's MO since forever, BA is probably just taking a page out of the same book in LGW. They did it with Clickair when Vueling first started, resulting in the former taking over the latter (even if they retained the Vueling brand, the people currently running the airline are all former Clickair. Vueling's original management went on to found Volotea). They did it again with Vueling when Norwegian tried to enter the BCN-Spain market (4x daily BCN-BIO flights at 13€, that market still hasn't recovered from DY having to pull out) and now they're doing it with Level against Norwegian in the LHLC market, particulary BCN-US west coast and, eventually, BCN-EZE. Level are just reskinned Iberia planes and crews, even if they use their most junior staff and make meals complimentary there's no way their costs could be lower than Norwegian's (add that they still use A330 ceos against 787s), much less enough to make a profit on the price at which they sell their tickets.
Bah, humbug!
 
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J4YC3
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Re: Is LEVEL Airlines A Failure?

Thu Oct 11, 2018 2:15 pm

And come to think about it, they're also doing it to Laudamotion in VIE. This article by CrankyFlier sums up the situation quite well, in my opinion.

https://crankyflier.com/2018/07/09/level-goes-short-haul-from-vienna-and-i-struggle-to-figure-out-why/
Bah, humbug!

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