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Andy Onchan

Flybe nosedives on profits warning

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A full 737/A320 flying to a destination 1-2 hours away makes money. Other sized aircraft and routes are much more financially precarious and a usually relies on busines travel to make a profit.

 

At the present fare levels I therefore have no idea how all our routes don't loose a fortune.

I reckon they are marginal and weighed against other costs and benefits. For example: An Easyjet aircraft and crew can fit in an IOM return between other routes when it couldn't easily do anything else other than sit on the ground costing money. If the schedule for the aircraft is running late, IOM is easily dropped out. That kind of thing.

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A full 737/A320 flying to a destination 1-2 hours away makes money. Other sized aircraft and routes are much more financially precarious and a usually relies on busines travel to make a profit.

 

At the present fare levels I therefore have no idea how all our routes don't loose a fortune.

 

If this is so, then Flybe must be in a precarious situation across the board, as all their aircraft are smaller than than that. But I would have thought that 1 to 2 hour sectors on 'non sunshine' routes are exactly what machines like the Dash 8 - 400s and the Stobart's ATRs are designed to do? If they fill 'em up reasonably well, then they must be doing something else wrong to be losing money. In fact, they put a lot of the blame on IT related cost according to the statement.

 

I wouldn't be surprised to see a network contraction, though, dropping routes where demand is too low. It's been a while since I was on Flybe (!), so I'm not sure how things are on the IoM routes.

Edited by guzzi

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Just as an aside (and I'm hardly suggesting this 19 seat aircraft is what we need) I wondered what a 5 year old Twin Otter, as mentioned in the Edinburgh thread, would cost to buy. A decent one with EFIS can be about £5 million (about x5 what I had imagined).

 

What would that cost a day in lease then add crewing, fuel, insurance, maintenance, airways fees, landing fees etc etc. How can they then charge £40 for a 40 minutes flight and make money?

 

I travel regularly midweek to and from MAN. There is rarely more than about 25 pax but I suppose a full ATR72 might make a few bob.

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A twotter probably costs just over a grand a sector EDI-IOM after pax charges. Based on citywings Glasgow load factors of just over 55% from the airport figures that's 10-11 pax a flight. So 100 bucks average a passenger to make it pay.

 

Simply makes it clear that eastern or loganair aren't going to be on the route come this time next year.

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A twotter probably costs just over a grand a sector EDI-IOM after pax charges. Based on citywings Glasgow load factors of just over 55% from the airport figures that's 10-11 pax a flight. So 100 bucks average a passenger to make it pay.

 

Simply makes it clear that eastern or loganair aren't going to be on the route come this time next year.

That's what I said earlier in the thread. To sustain a service operators will require some support.

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On ‎31‎/‎03‎/‎2017 at 11:17 PM, quilp said:

Is there a parachute strategy..?

they will be needing one pretty soon,but I've been pessimistic on this heap of shit for a few years now,how much longer can they last?.wold YOU feel secure booking a flight with them,i wouldn't.

http://www.cityam.com/274092/flybe-warns-profits-due-disappointing-rise-maintenance

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They're gonna be asking shareholders for more money again soon methinks. They're focusing on the wrong markets ^_^

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What I don't understand is why they should be having maintenance cost issues, as a fair proportion of their operation is outsourced to Stobart and Loganair(?). 

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The maintenance cost issue seems about as plausible as the IT problems that they came up with last March for poor performance.

I suspect there's a fundamental business model issue at stake here. IT and maintenance costs would appear to be periphery issues to the main operating problem.  

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It's a pity the Isle of Man doesn't have its own airline and parking places in major UK airports such as London City.

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I think one of the biggest problems is the cost for regional airlines trying to operate out of sizeable airports.  

I can't see how operating out of Heathrow for example is viable.  

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2 hours ago, Andy Onchan said:

What I don't understand is why they should be having maintenance cost issues, as a fair proportion of their operation is outsourced to Stobart and Loganair(?). 

I think you will find that currently they only have the 2 stobart aircraft on the iom operating on their behalf and no Loganair aircraft. So not really a fair proportion.

Most of Flybe maintenance is contracted to Monarch engineering division

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