Low cost airlines all scaling back at BRU

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travellover
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Re: Low cost airlines all scaling back at BRU

Post by travellover » 16 Feb 2017, 14:05

travellover wrote:
16 Feb 2017, 13:58
jan_olieslagers wrote:
15 Feb 2017, 15:03
They will more affect an airline whose fuel cost is 40% of total cost than one which has fuel contribute for 25% to its total cost.
(not sure if those 25 and 40 are realistic figures, but the idea should be clear).
Indeed. Surely the current SN, in it's size and business model, is more impacted than a bigger player by the fuel cost. If most airlines can more or less benefit from a low fuel context, it would be interesting if someone has some figures to share.
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travellover
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Re: Low cost airlines all scaling back at BRU

Post by travellover » 16 Feb 2017, 14:06

jan_olieslagers wrote:
15 Feb 2017, 15:03
They will more affect an airline whose fuel cost is 40% of total cost than one which has fuel contribute for 25% to its total cost.
(not sure if those 25 and 40 are realistic figures, but the idea should be clear).
Indeed. Surely the current SN, in it's size and business model, is more impacted than a bigger player by the fuel cost. If most airlines can more or less benefit from a low fuel context, it would be interesting if someone has some figures to make the comparison.
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Passenger
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Re: Low cost airlines all scaling back at BRU

Post by Passenger » 16 Feb 2017, 14:21

travellover wrote:
16 Feb 2017, 13:58
jan_olieslagers wrote:
15 Feb 2017, 15:03
They will more affect an airline whose fuel cost is 40% of total cost than one which has fuel contribute for 25% to its total cost. (not sure if those 25 and 40 are realistic figures, but the idea should be clear).
Indeed. Surely the current SN, in it's size and business model, is more impacted than a bigger player by the fuel cost. If most airlines can more or less benefit from a low fuel context, it would be interesting to read some figures.
It's not the scale of the airline that matters, but the yield of each flight. For LCC's, the average ticket fare is lower then with Brussels Airlines. Fuel costs therefore are important for every passenger at every flight from LCC's. Brussels Airlines also has Business Class passengers, and for them the fuel costs are less then 5% of the ticket fare. So even if Brussels Airlines hasn't hedged at a good price (but their annual account shows they have), they can counter it with a good yield. As long as not everybody passenger flies at 35 €...

convair
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Re: Low cost airlines all scaling back at BRU

Post by convair » 16 Feb 2017, 15:52

travellover wrote:
16 Feb 2017, 13:58
jan_olieslagers wrote:
15 Feb 2017, 15:03
They will more affect an airline whose fuel cost is 40% of total cost than one which has fuel contribute for 25% to its total cost.
(not sure if those 25 and 40 are realistic figures, but the idea should be clear).
Indeed. Surely the current SN, in it's size and business model, is more impacted than a bigger player by the fuel cost. If most airlines can more or less benefit from a low fuel context, it would be interesting to read some figures.
I believe this is a wrong interpretation of what jan meant, tavellover. If I remember correctly, the FR fans often said its overhead (or non-fuel?) costs were lower than that of a "legacy" airline like SN. Hence FR might be more impacted than SN by a fuel price hike.
Comments/contradiction welcome.

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Re: Low cost airlines all scaling back at BRU

Post by sean1982 » 16 Feb 2017, 18:18

convair wrote:
16 Feb 2017, 15:52
travellover wrote:
16 Feb 2017, 13:58
jan_olieslagers wrote:
15 Feb 2017, 15:03
They will more affect an airline whose fuel cost is 40% of total cost than one which has fuel contribute for 25% to its total cost.
(not sure if those 25 and 40 are realistic figures, but the idea should be clear).
Indeed. Surely the current SN, in it's size and business model, is more impacted than a bigger player by the fuel cost. If most airlines can more or less benefit from a low fuel context, it would be interesting to read some figures.
I believe this is a wrong interpretation of what jan meant, tavellover. If I remember correctly, the FR fans often said its overhead (or non-fuel?) costs were lower than that of a "legacy" airline like SN. Hence FR might be more impacted than SN by a fuel price hike.
Comments/contradiction welcome.
True, though FR is hedged for a loooong time

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travellover
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Re: Low cost airlines all scaling back at BRU

Post by travellover » 17 Feb 2017, 08:42

OO-ITR wrote:
14 Feb 2017, 22:26
travellover wrote:
15 Feb 2017, 15:01
sean1982 wrote:
14 Feb 2017, 17:04

Mostly because of historic low fuel prices and some state aid.
Fuel prices concern any airline.
and FYI the fuel prices are going up in case you didn't notice it yet. And the state aid. Well guess you have not been reading the 100s of previous messages. Or probably totally ignored like you usually do.
My point was/is to suggest that the argument of (recent) low fuel prices influencing black figures cannot be applied to the only SN.
sean1982 wrote:
16 Feb 2017, 18:18
convair wrote:
16 Feb 2017, 15:52

I believe this is a wrong interpretation of what jan meant, tavellover. If I remember correctly, the FR fans often said its overhead (or non-fuel?) costs were lower than that of a "legacy" airline like SN. Hence FR might be more impacted than SN by a fuel price hike.
Comments/contradiction welcome.
True, though FR is hedged for a loooong time
I mostly conceived that SN was more impacted than FR but reading all posts and informations, I'm not so sure.
For instance : http://theconversation.com/explainer-fu ... ares-36773
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Omychron
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Re: Low cost airlines all scaling back at BRU

Post by Omychron » 19 Feb 2017, 12:49

sean1982 wrote:
16 Feb 2017, 18:18
convair wrote:
16 Feb 2017, 15:52
travellover wrote:
16 Feb 2017, 13:58


Indeed. Surely the current SN, in it's size and business model, is more impacted than a bigger player by the fuel cost. If most airlines can more or less benefit from a low fuel context, it would be interesting to read some figures.
I believe this is a wrong interpretation of what jan meant, tavellover. If I remember correctly, the FR fans often said its overhead (or non-fuel?) costs were lower than that of a "legacy" airline like SN. Hence FR might be more impacted than SN by a fuel price hike.
Comments/contradiction welcome.
True, though FR is hedged for a loooong time
Odd how people will always jump to hedging, as if that somehow affects fuel pricing.
This just means it'll take a "loooong" time for the fuel price to be felt at Ryanair, and an equally "looooong" time for the subsequent drops to be felt.
In the end, low cost companies feel the impact of higher fuel prices too, hedging or not.
And they hurt more than legacy or hybrid carriers, where the relation fuel cost - total cost is different.

Back on topic, I don't believe the scaling back of low cost carriers has much to do with fuel costs.
Give any of these low cost carriers free market at Brussels, even at way higher fuel prices then we're seeing now, and they'd turn huge profits.

Competition is the reason they're scaling back. If they felt they could turn a profit at Brussels by increasing capacity they would. They have the aircraft and funds to do so!

convair
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Re: Low cost airlines all scaling back at BRU

Post by convair » 19 Feb 2017, 14:20

As far as FR is concerned, it was clear it wanted to kill SN (MOL said it several times), or at least hurt it enough to make LH abandon the take-over and then maybe make it an easy prey for itself.

That didn't work (fast enough) and now LH took over SN. Maybe they (FR) started the maneuver too late. The result is that FR is now partially pulling out of BRU.

IMHO, FR still has the means to hurt SN though, but they may have decided that it would cost them too much, both in terms of cash and human resources.

Charlie Roy
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Re: Low cost airlines all scaling back at BRU

Post by Charlie Roy » 19 Feb 2017, 15:14

That didn't work (fast enough) and now LH took over SN. Maybe they (FR) started the maneuver too late. The result is that FR is now partially pulling out of BRU.
I really do not believe Ryanair were aiming at Brussels Airlines in the recent Brussels wars.
Ryanair engaged in a war with Vueling and Easyjet on certain routes.
As a result there was overcapacity on the routes concerned.
Ryanair won when Vueling and Easyjet withdrew from the routes.
Ryanair set capacity to more realistic levels.

"Low cost airlines all scaling back at BRU" doesn't best describe the situation.
Rather, as expected, there are less low cost flights following the conclusion of a series of route wars.

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Yuqu12
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Re: Low cost airlines all scaling back at BRU

Post by Yuqu12 » 19 Feb 2017, 15:17

Ryanair is going to operate a serious amount of less flights this summer season from BRU, so this means that in fact all LCC's are scaling back at BRU.

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