The future of European aviation

[Clarkkent]

Here is something I stumbled across while looking for information about Thomson's withdrawal from Coventry.

http://news.travelcounsellors.co.uk/Ryanair_predict_five_carriers_will_survive_in_Europe_18795737.html

The deputy CEO of Ryanair predicts that only Ryanair, easyJet, British Airways, Air France/KLM and Lufthansa may survive the economic storms ahead. What affect might this have on low cost flying? How might it affect second home ownership in France?

I'll stick my neck out - I think that cheap air travel - as we know it - will disappear. However, full-service economy travel may also disappear.

[Frederick]

Ryan Air boss will be happy  I imagine to get his hands on cheap aircraft and hire crews as he is after putting on flights to the USA for 12 euros .....You will probably have to take your own  sandwiches to get that fare but that is what he is promising if he pulls it off ...

[Stefan]

Clarkkent

Add Alitalia to the list of survivors, it's the airline that will never be allowed to fail - for political reasons.

 

Elsewhere consolidation of services meaning fewer flights/seats/routes. Forget being able to buy a house in France and fly non-stop between regional airports as the carriers consolidate and do more "hub and spoking", i.e. expect to have to transfer through Gatwick, Luton, Stansted etc. Low cost isn't dead but more people are going to have to pay their way.

Frederick

USA for 12 euros...perhaps one  seat only sold at that price..everyone else paying at least ten times that.  Expecting to pay 12euros for a 5000km, 6 hour plus flight only goes to show how distorted some people's view of aviation economics have become, even with oil at <$70 a barrel.

 

[Frederick]

Stefan    Ryan Airs boss  is planning to buy 30 to 50 long haul aircraft for flights into Baltimore ..Rhode Island ..and New York  within 4 years .and Southwest Airlines the American low cost Airline plans to fly into the UK  with a similar service .... so the same way they sell tickets in Europe now  they plan  for the USA flights it seems ..we shall just have to wait and see

[Stefan]

Fredrick

 Err, I know all that!  - My point was that just like European fares the 12 euro ticket will be very much the loss leader and will be a rare beast....it costs considerably more than 12 euros to transport someone across the Atlantic - indeed it costs more than that to transport someone from the UK to Southern France ( which is probably why I'm the mug  who has just had to pay over 100 euros to buy a ticket late in the day on a LoCo to get from Southern France to the UK ... well somebody has to pay for the flight).

Once an airline shifts it's business  into the Long Haul Arena all sort of extra costs drop into the LoCost equation.....for example crewing levels per aircraft will probably go up and since the generally Lo Cos don't "night stop" crews downroute they save on hotel and transport charges vs. the legacy carriers.  All that would have to change with a Long Haul Operation.  In my humble opinion if this goes ahead you are bound to see the low cost tickets advertised but they will be very few and far between, but  as you say we will have to wait and see. 

[Quillan]

Did anyone see the documentary (English TV, can't remember the channel) on cheap airfares a few weeks back?

O'Leary didn't seem to bothered about fuel costs and anticipated that his fares would only increase by between 1.5 and 2 % because of them. Part of the oil price going up was due to the value of the dollar (he said). The fella that owns the oil wants to spend his money back home so whatever the exchange rate is in relationship to his own currency is going to effect the pice of oil. Not the prime reason for high oil prices of course but it doesn't help. Aparently airlines buy there fuel up to (or in some cases more than) a year in advance.

I thought O'Leary was going to try a long haul flight to Hong Kong or somewhere like that in 2009 to see how it goes. Wonder if he will increase the baggage allowance for long haul?

What I think is funny is loads of people complain about the likes of Ryan Air, about the weight limits on luggage, high price of a packet of peanuts etc but they are still as popular as ever.

[Eos]

[quote user="Quillan"]

I thought O'Leary was going to try a long haul flight to Hong Kong or somewhere like that in 2009


[/quote]

America, I believe. This was why he wanted to buy out Aer Lingus a couple of years ago as they already have a trans Atlantic presence.

[Stefan]

Quillan

Low cost to and from Hong Kong has been tried very recently - an outfit called Oasis operated LGW-HKG using 747s.  Sadly, since I had several friends who worked for them, they didn't last very long.

 

As for fuel, yes it's bought in dollars so it'd not just a case of looking at the raw price per barrel, you also have to factor in the doallr exchange rate to work out if your fuel costs are up or down relative to your "home" currency.

 

Yes, most airlines "hedge" fuel, i.e. they agree to buy at a fixed price at some point in the future..so they're probably trying to hedge like mad at todays' price.  But...it can go badly wrong if you hedge at a high price and then prices plummet  - one outfit, probably quite understandably  hedged some of their supplies at the equivalent of  $130 a barrel earlier in the year!  You can avoid  paying the fully hedged amount on the day but you end paying a penalty fee  so hedging is certinly something you don't want to get badly wrong.     

[Sprogster]

The biggest threat to low cost air travel in the future is going to be the international political pressure to reduce carbon emissions dramatically and the resulting escalation of taxes on airfares. For example, Ireland has just announced new taxes of £10 per passenger for long haul passengers and £4 for short haul.

Short haul air travel is likely to be targeted more than long haul as there are viable better green alternatives such as the train and European governments such as France are keen to protect their high speed train networks from these upstart British and Irish low cost carriers!

So regardless of the oil price expect to see European governments try to tax us of the plane onto the train. The trouble is that the TGV is not cheap!

[andyh4]

[quote user="Sprogster"]

So regardless of the oil price expect to see European governments try to tax us of the plane onto the train. The trouble is that the TGV is not cheap!

[/quote]

 

Tell me about it.

 

I don't have a LoCo from where I am to the Lyon area (at least not until the skiing season starts).  So I have to resort to national flag carriers.  Typical cost of a return 31€ - plus 68€ taxes.

 

Then I get an e-mail from SNCF.  Thalys to Paris for 19€.  Well that sounds interesting.  Except it is the last train on a Saturday night and arrives far too late to get an onward connection South.  Best price for my return by high speed train at a sensible time and to allow me to spend the weekend at home in France - 300+€.

I would happily go by train, but the price has got to be competitive.