VLM Airlines news 2014-2015

[saratoga]

Just to make clear: Klm never stopped the dallas route. They provide the route during a limited period. ( april to end of october). They did it this year, last year....

Back on topic.

[Avnu]

Also why sell and leaseback aircraft that are already paid off and worse very little?
Sounds like a desperate attempt to raise money.

It sounds like common sense actually. It's quite rare these days for an airline to still own ALL of their planes - which they did - so it's much more in line with how other airlines operate. In a way, it would be foolish not to.

[RoMax]

Just to make clear: Klm never stopped the dallas route. They provide the route during a limited period. ( april to end of october). They did it this year, last year....

Back on topic.

Not that it belongs in this topic...but just saying, they will not relaunch Dallas in summer 2016 (it is replaced by Salt Lake City basically) so they did stop Dallas.

[koninckske]

Last flight ANR - GVA in booking engine is 14 February 2016.

I wonder what is going to happen with the BHX flight which is normally operated with the airplane arriving from GVA.

Today:
New routes FDH to DUS, HAM and TXL
Cancelled route ANR to GVA.

VLM says money from Fokker 50s sale will be invested in new routes (first 3 from FDH).

[crew1990]

I wonder how long this company will survive.

[cathay belgium]

Hi,

Damn had a booking for march ...
If a route to GVA won't work from ANR they better stop immediately !
No management, no bad ... I mean there is none...!
More then 10 flights a day from BRU mostly loaded and they can't even fill 20 pax of these loads... horrible ! Let them die quick without pain please, ...

CXB

[crew1990]

The misadventure of Cathay belgium is the proof of the non viability of this airlines, who will still book with them, there are opening routes for a couple of month and close it, who will still trust them?

A few years ago I would have say that it's the fault of the airport which was not a great catchment area, but it look like I was wrong because JAF is performing well at this airport. The problem is VLM. But I'm sure it will soon be over for them.

[LJ]

Entering the Friedrichshafen market sounds like an ok idea. No competition from other airlines and a proven market (not a big market). Just putting in 3 airplanes is too big to start an operation.

How do you define "proven market". Their main airline went bankrupt and the Germanwings flights to CGN didn't last long.

Like I said: maybe the airport itself has offered some kind of compensation for the potential loss? The loss of InterSky was a serious loss for them as well...

That's the impression if you read the German local newspaper (Sudkurier). It's expected that the loss of InterSky meant that FDH would be losing money this year and the local city council is going to pay 2.3million to cover the losses (thus a new service may be cheaper).

FDH airport has been so nice to tell us how big the market for these flights is by stating that the loss of InterSky has meant a reduction of passenger numbers by 115000 a year.

The 115,000 includes a twice daily / daily (on weekdays) FDH - FMM - CGN rotation which VLM isn't going to operate (good choice as this didn't do well). Moreover, InterSky operated charters and other scheduled service from FDH on weekends and between the morning and evening DUS/HAM/TXL rotations (which I hope VLM will do as well).

I am sure that they got quite a nice offer from FDH, and they will continue flying as long as they receive a subsidy. Load factors of Intersky were not that bad neither.

I come in the region regulary. To be honest, I hope that they can make FDH work as the airport derves it (and it would be beneficial for us). However, Friederichshafen isn't a very big city and it has limited options to draw additional traffic (or better traffic which generates a lot of revenue). Morover, it face though competition from FMM (where FR and Wizz Air are located), ZRH and MUC (both are two hours drive away, though morning rush hour will increase the journey)

[b720]

As said above, if they can't make ANR - GVA work?
No publicity, very very basic and backward booking engine that does not accept all major credit cards...what are they expecting? That People magically find them and pay them to fly to and from the middle of no where?
I wish them the best of luck.. It is a shame, really. Just as ANR is expanding and becoming a real regional airport..

[cathay belgium]

Mmm....
ANR a real regional airport ?
With twice daily Cityjet, a dying VG and 'charters' JAF flights to some destinations... ?
JAF opened up a market here,... VG could have done this but with props to BCN,FCO,LIN,.. wasn't a good option...
Strange I don't see them coming to my nearby really regional airport ?! EIN...
Cityjet left here with two rotations operated by VLM to LCY and load were acceptable as I see what they are loaded in ANR ....
They could have flown ANR-AMS,LUX,CDG,FRA,ZRH.. as feeder for the bigs in co-operation...
Even a BMA could have worked I guess

But none of this all... SOU,HAM,GVA and BHX...
Fly a lot to BHX with KL,SN... big loads indeed but mostly transfer,... also from the nordics...to... GVA

Even the VG pilot ,last time I was there, parked next to the ARJ100,came to SN's avro inside for a quick chat with the SN crew, looking for better job options I guess now ...

What a mess...
Hope they don't go broke before I get my refund haha... guess no rebooking to another carrier would be given... SN dayreturn now +500 euro...
Maybe FR can enter the GVA market with VG rescue fares LOL

CXB

[Flanker2]

It sounds like common sense actually. It's quite rare these days for an airline to still own ALL of their planes - which they did - so it's much more in line with how other airlines operate. In a way, it would be foolish not to.

Not really.
25-28 year old F50's are not worth that much.

They were paid off and had no capital cost.
Now they are going to have to pay the lessor interests and a whole bunch of fees.

It only makes sense if the aircraft came with a high interest debt, which I doubt.

Leasing looks attractive on paper, but in the current low interest rate environmennt I think that airlines are being very foolish to not own their own aircraft. The debt is practically free considering inflation.

Ryanair’s Chief Financial Officer, Neil Sorahan, said:

“We are pleased to have accessed the low cost Euro Bond markets again. Our €850m, 8 year, transaction was very keenly priced at a fixed coupon of 1.125%. The bond was more than 3 times oversubscribed, reflecting the strong demand from bond investors for Ryanair.

This low cost finance, coupled with our attractively priced Boeing orders for 380 new Boeing 737 aircraft, will enable us to further reduce our aircraft ownership costs while continuing to offer the lowest fares and improving travel experience under our “always getting better” programme to our customers as we grow traffic from 90m customers p.a. this year to 160m p.a. by 2024.”

- See more at: http://corporate.ryanair.com/news/news/ ... 5MyB8.dpuf

[Poiu]

It sounds like common sense actually. It's quite rare these days for an airline to still own ALL of their planes - which they did - so it's much more in line with how other airlines operate. In a way, it would be foolish not to.

Not really.
25-28 year old F50's are not worth that much.

They were paid off and had no capital cost.
Now they are going to have to pay the lessor interests and a whole bunch of fees.

It only makes sense if the aircraft came with a high interest debt, which I doubt.

Leasing looks attractive on paper, but in the current low interest rate environmennt I think that airlines are being very foolish to not own their own aircraft. The debt is practically free considering inflation.

Exactly. A mortgage to buy a house is common sense, but selling your house, renting it back and use to money for a trip around the world, in the hope of finding your soulmate, is risky indeed.
I hope to be proven wrong and wish them success though!

[PttU]

Wasn't VLM going to buy those SSJ's? In that case it would make sense for the remainder of the lifetime of the Fokkers to get the money for selling them, and using only a bit of it for the lease untill the SSJ's are here? Maybe they needed more cashflow?

[sn26567]

Wasn't VLM going to buy those SSJ's?

Nope! Leasing from Ilyushin Finance.

[Avnu]

I'll be the first to admit the Jetstream deal won't bring in huge amounts of money. In terms of dollars and cents it's probably just a short term solution to what's hopefully a short term problem. Whatever helps them to make 2015 a somewhat less difficult year should be pursued IMHO.

But I also think it's wrong just to look at this deal as a bunch of numbers that do or do not match up. It's also about following a certain business model that's well established in the aviation sector AND about building up relationships. I've come to believe (and yes, this is mostly just a gut feeling) that the Sukhoi/Ilyushin deal is a non-starter and that VLM will not be flying the SSJ in the near future. And if that means they'll have to look for some other replacement for the Fokkers as a way to grow the business in smaller steps then Jetstream might be a good partner to have on board.

In other words, I think there must be more in the VLM/Jetstream contract than just a sale-and-leaseback deal for 4 planes. Time will tell of course and I've learned to always be ready for new developments when it comes to VLM

[koninckske]

Last flight ANR to BHX in booking engine on flyvlm.com is 4 March 2016 (return BHX-ANR still available after 4 March 2016). Not looking good for VLM operation at ANR.

I hope that VLM will make a clear statement in January 2016 about their future route plans. Also about what routes will be cancelled, not just about the news ones from FDH.

[airbuske]

It is official now : VLM will stop GVA & BHX from ANR.
GVA will stop on the 14th of february and the last flight to BHX on the 6th of March.

[air belgium]

What is the load factor on the VLM flights from ANR to HAM and Southampton? Thanks.

[Avnu]

What is the load factor on the VLM flights from ANR to HAM and Southampton? Thanks.

As far as I know, there's no public data available in either Belgium or Germany, but there is in the UK. The CAA releases numbers per route per month, however it seems the latest bunch only includes the SOU-ANR-HAM route and BHX-ANR but not SOU-ANR. As such, for November (provisional data):

- 245 passengers between BHX and ANR. I count 11 return flights that month (assuming there was no flight on armistice day), meaning there were 1100 seats for sale and a 22% load factor.
- 717 passengers between SOU and HAM but without the numbers for SOU-ANR it's impossible to calculate the load factor.

Data for October 2015 is complete but doesn't show the SOU-ANR numbers either:

- 241 passengers between BHX and ANR with 12 return flights, 20% LF
- 918 passengers between SOU and HAM, again no LF.

For September: 678 passengers between SOU and HAM

Finally, we do get full numbers for August 2015 but I'm not sure how representative they are given the summer period. With that in mind:

- 282 passengers between SOU and ANR
- A further 88 travelling SOU-ANR-HAM for a total of 370 passengers between SOU and ANR

Assuming there were no gaps in the schedule (I can't remember), the ANR-SOU route was served with 21 return flights that month for a total of 2100 available seats or a 18% load factor. That sounds terrifying but it's clear from even the incomplete numbers above that the route has improved since. Even when counting only those 717 passengers travelling to/from HAM out of SOU (and assuming 0 passengers with origin/destination ANR) that still comes down to a 36% load factor. Not much by any stretch of the imagination but substantially higher than the 22% LF to BHX.

[air belgium]

Thanks for your information!