So who is doing due diligence on LTE?

LTE (the former Spanish Affiliate of LTU) is continuing to operate its leasing and charter operations. In the mean time while banned from operating a scheduled service it is having its books evaluated by someone from Europe.

Our speculation is that it is Grupo Marsans who owns Air Comet (and absorbed the rump of Air Madrid in 2006) and Aerolineas Argentinas and who just placed a mammoth order for 61 Airbus liners included some A380s!!!

Other possible alternative players are Vuelling/Clickair (doubtful as they have their own merger to manage), Spanair is a basket case so that leaves Iberia who it would doubtful would do this. Hence we think Grupo Marsans

Cheers

Look for new posts coming in June

Sorry we have not been able to post for a while here. However the regular T2 Blog has been rolling along.

New Posts will come along in June if we are able to get the reports out

Cheers

Timothy

Adieu Virgin Blue LCC

We are gathered here today to acknowledge the sell out and passing of our friend and former classmate Virgin Blue.

Effective today they are no longer a Low Cost Carrier but a conventional airline. Witness what they have done:

No Longer 1 Aircraft type - they now have 2 actually 3 but whose counting
No Longer a single class - they have 2 classes
No Longer web only airline - they are available in the GDS
No Longer one size fits all....
Profits are no longer ascending.

So we say Adieu Virgin Blue. Alas I knew her when she was a true Virgin. Now she is developing some decidedly matron like attributes. Just like Qantas.

Jetblue sounds more and more like a .....

Full Service Network carrier.

Eschewing its routes even further - JetBlue is continuing its inevitable march away from the LCC model to that of a FNC. Let me count the ways:

Aircraft - Jetblue uses aircraft from not even the same manufacturer, today it flies Embraer E-Series as well as the Airbus A320.

Airports - Jetblue mostly serves mainstream airports of its 54 served online cities very few are considered purely secondary airports (EG Long Beach). It serves most of the top 25 markets in the country with the exception of Dallas and Atlanta.

It participates in the GDS fully

Etc etc

And now add Fully Refundable fares. Here are the rules from the website.

"The fare rules for JetBlue Refundable Fares are as follows:
This is a refundable fare.
Reservations made with this fare may be changed or canceled for a refund up until the time of departure.
After departure, any unused funds will be converted to a JetBlue credit which is valid for future travel for up to one year from date of issuance.
Name changes are permitted.
All fares are subject to change until purchased. "

So Jetblue sounds very "un"LCC like. It joins AirTran and now Southwest in moving further away from the LCC model. Herb is not even off the board and things are not too promising over at Love Field.

Bottom line: JetBlue is NOT a pure LCC any more. While it has returned to profitability for the first time since 2005 it clearly has moved away from its roots. This move is not confined to the USA. In Europe we also see EasyJet behaving the same way.

What's left?

Higher fares and labour unrest.

Lets hope these dont happen any time soon

Cheers

Timothy

Ryanair posts big rise in 1/2 Year Profits

Sticking to the playbook. Well done the team over at FR.

The numbers of course are staggering. Well on the way to a 50 mil pax plus airline this year- the underlying numbers show some clear success in the strategy.

Revenues grew by 24% to €1.6bn (£1.1bn), which included ancillary revenues of €252m (£175.5m), up 54%. This meant that ancillaries accounted for 15.8% of total revenues, versus the airline’s target of 20%. This is the key to the long term success of FR. For a conventional airline this number is essentially zero as no additional revenues are booked in this manner. This only now shows how much this is worth and how successful Ryanair has been at pursuing the growth of the revenue base not based on RPMs/ASMs and CASMs.

We believe that leveraging the individual passenger as the core metric is the fundemental differentiator between the true LCC model and the legacy one. Any airline still clinging to their outdated metrics deserves to be shot.

Those of you who are regular readers - know am not a big fan of the Ryanair service but I totally buy into the model and am quite happy to put up with the poor service in exchange for a reliable timetable and a low price. This is the true credo.

Cheers

Timothy

AIr Asia X delays UK launch till Q4 2008

As reported in DowJones News Wires, KL-based AirAsia X, 20% owned by the Virgin Group, plans to start services to London or Manchester in Q408. The LCC’s chief executive, Azran Osman-Rani, told Dow Jones Newswires it would acquire 50 Airbus A350s or Boeing 787-10s to handle its ongoing expansion.

Those interim A330s are not all going to fly to the Gold Coast so where are they going? Howeve a big twin like A330 would have to stretch REALLY hard to make it to the UK.

Enquiring minds want to know.

Cheers

Timothy

Southwest returns to Worldspan after many years

Southwest will be returning to participation in Worldspan announced today as part of their ongoing campaign to court the business traveler.

However Worldspan even under Travelport ownership is not known as a major corporate agency system, nor do they have deep penetration among agencies in WN's key markets. So why?

Two reasons:

Reason 1 - Southwest needs all the bookings they can get - with Galileo and Worldspan under joint ownership (but NOT common platforms), Travelport made them an offer they couldnt refuse.

Reason 2 - Southwest needs a back door capability to reach the OTAs who are still using Worldspan.

It has been a long time coming. Now if only Southwest would announce something more meatier. We still dont have much clue to their long term strategy change.