If I got it right, its not just about putting in new fares, (so just filling out the grid so to say), but about making it possible to book several add-ons to your ticket too, so for that they'd need a completely new booking engine, a bit like that of say vueling or germanwings.
But good thinking airazurxtror, because it seems you are right.
I have just checked our corporate interface with them here at work and indeed, they have made the changeover behind the scene with much more product options available: if you want I can book you a return ticket to BCN 'sec' for instance for indeed 69 euro as far as I can see here, so in case you wanted to be the very first to make use of their new product, I am afraid you're going to be beaten by those booking through GDS systems. Just teasing you a bit; I hope you won't mind?
The federal department of Mobility & Transport has advised the federal government that, due to an internal cash flow problem, its unable to pay out the support that has been promised to Belgocontol, to three Belgian airlines, to Belgocontrol and to NMBS/SNCB Logistics. The department has advised its secretary of State about its unability to pay out the subsidies.
Source for this article in De Standaard: another article in L'Echo.
Yes, it's true (see official press release): SN is one of Europe's fastest growing airlines this year. :clap:
Bring in more Airbusses, they are highly needed...
One would need a lot more internal information in order to make a sound recommendation but, looking at their traffic growth figures, it seems SN shouldn't loose any time in speeding up its fleet expansion. And LH should even push them to go ahead.
SN increased capacity during this summer and they managed to fill that capacity.
Bravo!
HOWEVER, the aviation business is not a one month business.
If it were, all airlines would be profitable.
Remember that SN is stuck with that additional capacity during the winter.
More revenues during July-August, but more costs for the whole year.
It's not hard to fill capacity during the summer. The question is what do you do with that capacity during the winter (for which I already proposed a solution numerous times, but to no avail.).
Unfortunately, SN doesn't have an answer to this, as winter after winter they bleed all the money that they earn during the summer and even more.
Even FR park a significant portion of their fleet during the winter. The mall difference is that they don't pay leases on most of those aircraft. They own them on dirt cheap interest rates and bought them very cheap.
Also, as put in the press release, tickets were sold cheaper.
So how much cheaper do you need to sell tickets to get 20% more pax? Would a 5% cheaper ticket convince 100.000 more people to fly SN? Would you pass on a ticket for 300 euro's but buy it for 285?
Or would you want more like a 10%? 20%? 25%? 50%? discount?
If tomorrow I start an airline flying BRU-JFK and I sell tickets for 400 euro return all the time, I will be full most of the time, but will I make money?
Also, SN operated some seasonal routes in very low frequencies, such as Corsica and CAG. Those flights can cost quite some money to operate as contractors for handling and airport will charge a premium for this occasional and highly seasonal service.
Last but not least, flexible costs increase significantly too, albeit slower than the pax increase.
So don't get too excited until you see the balance sheet at the end of the year.
With an increase of 5.2% in ASK, the capacity increase has been rather 'modest'. Yes these additional seasonal European flights have a lower impact on the ASK compared to longer routes and additional capacity has been deployed on charter operations, but the increase in pax loadfactor of 4.4 pct points is notable.
In summer, business routes are mostly operated at lower frequencies, upgrading these in the winter again already partly fills the 'overcapacity', Warsaw and Riga are (re)launched as new European routes this winter and just like more summer charters have been operated this winter, more winter charters (such as to skiing resorts, but not exclusively) will be operated. Of course that doesn't fill the complete over-capacity, but I doubt they will have more overcapacity this winter compared to previous years, the contrary actually.
Of course operational data doesn't show the complete story, but at this moment there is more reason for optimism than for pessimism. And we'll have to wait some more months/quarters anyway to see the financial effect of the updated European fare offer, so the balance sheet for 2014 will still show only half the story of the direction SN is heading to.
Also a positive number, though not published by SN itself with an exact number, is the increase in transfer pax (not only long haul to short haul and vica vers, but also within Europe). The increase of more than 20% in transfer traffic for BRU in August shows that this is about more than just point-to-point low-yield leisure pax.
RoMax wrote:With an increase of 5.2% in ASK, the capacity increase has been rather 'modest'
The capacity increase is more or less equivalent to 3 A319's flying 200 hours each.
In leases and insurance costs alone the cost increase would be in the area of 6-7 million euro's.
Divide that by 100.000 additional passengers and well, 60-70 EUR + 30 euro in airport taxes.
This means that the first 100 euro's that each of these pax paid would go to cover the capacity increase and the airport taxes. I'm not even counting the additional fuel, maintenance, crews, operational costs, etc...
This is why it's so important to know how the yields changed, before we can say whether SN is on the right track.
Thank you for the link to the press release, André.
IMHO they have predominantly replaced smaller planes with bigger ones on existing routes: doing so allowed them to reduce frequency on some of those lines and free up a the plane or 2 for some new routes too, and on the cheap, making the picture much brighter.
And there we come to an aspect which isn't taken into account in the equation so far, but to which I point above, it's that it would greatly surprise me if they aren't cutting their costs through the introduction of (first) bigger planes, and (soon) their new products.
All combined; the explosive passenger growth on the pro, the lower yield on the con, yet combined with the lowered costs; I'd say the risks aren't exactly on the down side for now: definitely a completely different picture than what most would have expected 9 months ago and maybe in there is to be found the real reason of their disbelief/pessimism?
Flanker2 wrote:
The capacity increase is more or less equivalent to 3 A319's flying 200 hours each.
You are not considering higher/optimised fleet utilisation and use of bigger aircraft iso smaller ones.
Besides, if SN would have that much overcapacity and exploding fleet costs because of this, why, really why would they add another A319 in the fall of this year?! It is perfectly possible to add 3 A319's in the spring of 2015 instead of 1 now and 2 in early 2015 as they are planning now. They are removing the last RJ85 from the fleet yes, but if they would indeed encounter such a significant overcapacity in the winter, they wouldn't replace it until the next summer and temporarily reduce the fleet in size.
Btw, regarding the two Q400's from FlyBe, don't their lease contracts end around the start of the new IATA winter season? Or are they extended?
The financial results are net yet clear indeed, which is normal. We have to wait until the end of the year. But also there I would rather verify if the trend is going in the right direction or not, rather than the +/- result itself.
What is more important for me though is that the pax evolution is different than what might been have expected at the end of last year, and than what was stated before by some here on the forum: Ryanair would blow everyone out of the market, new capacity in existing markets (Rome, Lisbon, Barcelona, ...) would lead to SN planes being less filled, etc. The contrary is true: e.g. I was recently on flights to FCO and they were almost fully booked which I found strange (but it was said by SN that the best performing routes are among others LIS, FCO, MAD, BCN).
I also think that indeed the transfer policy of the LH-group (because that is not something SN is deciding on its own) is working well over the past months. LH said before they want to use BRU to re-direct certain pax more logically: e.g. someone from Gotheborg wants to go to Porto - better via BRU than via FRA or MUC. I am curious to know how many of the pax on SN flights are coming from the booking mechanisms of LH, OS, LX ...
Finally, maybe even more important, it seems that Belgian people are still willing to travel, even if the economic future is uncertain. It seems that travelling is the last they will drop. But I don't know if there are surveys confirming this. This is good for SN, but also for Ryanair, Vueling, Jetair, Thomas Cook ...
