Low Cost Airlines!

[f9driver]

Man, this sounds like cannabilization!

http://moneycentral.msn.com/content/P87285.asp

 

[BLUE BAYOU]

July 8, 2004 European low-cost airline Ryanair said on Thursday it would offer one million seats at 99 pence (USD$1.85) each as part of a winter fare sale.

Ryanair Chief Executive Michael O'Leary last month warned of a "blood bath" over fares later this year as the Irish airline taps cash reserves of more than EUR1.2 billion (USD$1.48 billion) to step up pressure on cash-strapped rivals across Europe.

(Reuters)

So you think the competition is fierce???

 

[vetteracer]

This is survival of the fittest!

And we could assume who in not fit anymore. Pay, operating costs, fuel it is penny pinching in this final game of poker. It will get better after half the players leave the table. The market will demand air transport and there will always be someone to fill the gap.

Mark

 

[AAflyer]

O'leary has his own crews purchase beverages onboard. Talk about running a lean ship. Thats right folks, you want that morning cup of coffee you pay a euro just like the pax due.

Unless you can get in good with the FAs .

Probably shouldn't have posted this, I am sure some airline will start doing it here, and then others will have to do the same to be competitive, and then Lowecur will be telling me how stupid I am to think I could get a free cup of coffee on board, how uncompetitve.

AA (joking, I hope)

 

[Draginass]

Sounds like what the business is going to turn into is airline "churning." Do a start up, pay ultra low wages to desperate workers, ride the tiger for a while, then shut it down and start all over again. Corporate officers walk away with zillions and everybody else gets a pink-slip and a new job at constantly lowering entry compensation.

Predict we'll have the same thing here. JB is riding the tiger now. In a few years, after Virgin USA and some others . . . . then JB is bust. You can then fly for JetPink, JetYellow, etc.

In the meantime, air service to marginal cities that the cherry pickers like SW and JB, and soon to be Virgin USA don't want will cease.

 

[Publishers]

Cycles

While I think we are definitely in a new situation as regards traditional cycles, in almost all case, the avaiability of aircraft from down periods has resulted in more airlines trying to start.

The high capital cost, which keeps the entry fee high, is reduced and hence an opportunity to be taken advantage of. While the crash of Valujet changed the time and money to start a carrier, the basics are the same.

It is not that you are paying such low wages, it is that you are not paying premiums for seniority that is non productive. If you look at it, who remembers airlines like Air South who tried to ride the same wave as Valujet or Air Tran.

There is nothing new here.