Posts Tagged 'low-cost'

Air Asia And Jetstar Form New Alliance

The Kuala-Lumpur based Air Asia and Australian Jetstar low-cost carriers have announced a new Alliance in Sydney that is primarily targeted at specifying the new generation of single aisle aircraft as well as joint procurement of these planes.

The new alliance is bringing together the two leading, lowest-cost low-cost carriers of the Asia/Pacific region, and this alliance can reduce their cost levels even more by sharing expertise and procurement procedures.

The 3 alliances among traditional airlines (oneworld, Sky Team, Star Alliance) are primarily focusing on commercial agreements and passenger benefits such as loyalty programs. The same idea was launched in the first “low-cost alliance” between JetBlue and Aer Lingus who linked their booking engines, started code-sharing on some routes and are offering through check-in of luggage for each other’s flights for example.

The idea here on the other hand is that this new alliance is not (yet) about commercial partnerships and not about bringing additional revenue to each other by “sharing” passengers, but about actually cutting costs together by sharing some operational functions. The most interesting part is that these two airlines have explicitly formed this alliance partially to create “a joint specification for the next generation of narrowbody aircraft” and to look into a joint procurement of these jointly specified aircraft. While traditional airlines only seem to be talking about the importance of new, fuel efficient and environmentally friendly single-aisle aircraft and are looking for the aircraft manufacturers to come up with something out-of-the-blue, these two low-cost airlines are taking proactive steps – they want to make sure that the new airplane types which will be around for the next 40-50 years are designed and created in a way to fulfill their own requirements! They will not just jump on the bandwagon when the planes are around, but will actually be driving it!

And they are not talking in the air, as their combined fleets with orders and options add up to nearly 400 planes (currently operating 131) – making them a very powerful player to define the replacements of the Airbus A320 and (or) the Boeing 737 airplane families.

Alan Joyce, the CEO of Jetstar parent Qantas Group said: “Just as both carriers have pioneered the development of the low-cost, long-haul airline model, today’s announcement … establishes a new model for achieving reduced costs and increased efficiency. This partnership will ensure that both airlines can capitalize on these growth opportunities“.

Principal terms of the agreement cover:

  • future fleet specification,
  • airport passenger and ramp services at airports where both carriers operate to,
  • joint fuel purchasing,
  • shared aircraft parts and pooling,
  • procurement of engineering and
  • maintenance supplies/services and
  • reciprocal arrangements to mitigate possible operational disruption across both networks.

Reportedly the next step for the partners would be to look at joint venture on routes and other commercial activities including joint procurement of hotel inventory for holiday packages.

Air Asia CEO Tony Fernandes hailed the agreement as another step in “the airline’s strategy to maintain its global leadership as the lowest-cost airline operator This is what enables us to provide the low, low fares that our guests have enjoyed, and will continue to enjoy.”

Peter Harbison, Chairman of the Centre for Asia Pacific Aviation said the agreement could be the start of something bigger, with codesharing and equity exchanges at a later stage: “This is all about ‘let’s live together before we get married’“. Fernandes added that “This will be an exclusive partnership between both airlines. It’s difficult to have two husbands.

We are happy to see such an innovative, but very logical initiative from two airlines in such harsh economic situation. This is really pointing forward to a future that other alliances (even the ones already established) should follow immediately. The big three alliances all have their leading, ruling large airline members, who believe they have the large enough economies of scale and do not need their (smaller) partners in such joint procurement actions – even though they should… Let’s see how this works out, we can only wish Air Asia and Jetstar a huge success and a great future of this new, cost-cutting based alliance!

by balint01

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SkyEurope Goes Bankrupt

Following 7.5 years of operations and almost half a year of struggling to find an investor, SkyEurope Airlines has announced its bankruptcy this morning on the website of the Vienna Stock Exchange, which also means the immediate suspension of all of their flights.

We have reported earlier that a SkyEurope plane had been held up in Paris in July, then all of their Vienna flights were moved to Bratislava just two weeks ago, and earlier on Monday the company cancelled all flights from Slovakia until midnight on Monday, facing a suspension in flights from the Czech capital of Prague starting on Tuesday due to outstanding bills. Then the (not-so) shocking news saw the light this morning: SkyEurope Airlines went bankrupt. This means all of its fleet is grounded, all of its passengers are left behind wherever they may be at the moment.

SkyEurope_Website_Bankruptcy_Message

The final request for the bankruptcy procedure came from the advisor overlooking Slovakian SkyEurope’s financial restructuring. Due to this, ALL OF SKYEUROPE’s flights are CANCELLED with IMMEDIATE EFFECT. Some reports claim their staff has not received their salary for some time, and it still owes a large sum of money for Bratislava Airport for the fuel they have used in recent weeks. SkyEurope first flew on February 13, 2002 and last flew on August 31, 2009.

When clicking on the banner that reads “SkyEurope suspends its operations”, you get to a page with the following text:

Dear Guests,
Please be advised that SkyEurope has suspended its sales and operations immediately.
Those of you who have purchased flights with a credit card, please turn to your credit card issuing bank to seek refunds for unused portions of SkyEurope’s flights.
In case you have paid directly to SkyEurope in other means than credit card (e.g. bank transfer, cash), please be advised that a refund may not be possible.
If you have ordered your flight tickets via a travel agency or organizer, you should discuss the matter with them first.
If you are already at the destination or have rented a car through SkyEurope’s business partner, you may stay at the hotel and use the vehicle during the period originally agreed. You must, however, order a return flight from some other airline at your own expense.
You may also wish to contact your insurance provider to seek further guidance and support.
We regret for the inconvenience that have been caused to you.

The worst point is the one that explains that if you are already at your destination, “you must … order a return flight from some other airline at your own expense”. This will mean a lot of hazzle, and maybe extra income and profit for other airlines flying on the same route. Earlier, when other low-cost airlines went bankrupt, easyJet and BA were the first ones to offer special tickets for passengers having a valid ticket with the bankrupt airline. We are wondering if any other airline will offer this now (Austrian Airlines, Wizzair, CSA and maybe Malev are in favor as they share(d) some routes with SkyEurope).

Update (02SEP): Three Airlines are offering special one-way fares for passengers holding a valid SkyEurope ticket: Austrian Airlines for EUR 150, Malév Hungarian Airlines for EUR 99 EasyJet for EUR 30 and Wizzair for EUR 30. Malév also offers the EUR 99 fare for passengers who planned to fly with SkyEurope from Prague – they can now take Malév’s offer for a transfer flight through Budapest.

by balint01

Ryanair Passengers Willing To Stand For FREE

RyanAirRyanair is famous for creating media buzz with the strangest ideas, including collecting money for using the restrooms onboard, or asking passengers to actually carry their luggage all the way to the airplane. Their latest such idea is to install standing “seats” for passengers on short flights. This idea has also been raised by the Chinese low-fare airline, Spring, not so long ago. Ryanair has claimed they are in talks with Boeing to install such devices (let’s not call them seats), but Boeing has not yet confirmed or denied such a study being conducted.

Ryanair_Vertical_Seating

Ryanair however, took the idea one step further, with conducting a survey on their site. During two weeks in July 2009 they were asking their website visitors three questions – that were answered by 120,000 people. Today (22nd July) they announced that over 80,000 (66%) passengers said they would stand on short one hour flights if it meant that their fare would be free (FREE – not simply cheap). 72,000 (60%) agreed that airline passengers should have a choice of standing on short flights as they already do on buses, trains and underground transport while a minority of 50,000 (42%) said they would stand if they could pay 50% less than seated passengers. This means most of the passengers are only willing to stand – if the fare is FREE. Simply offering cheaper fares will not do the trick – in case the majority of the passengers. However, 42% is still a large number to be considered.

Here are the results from the Survey:

Question
Yes
No
 1. If it meant your fare was free would you stand on a one hour flight?
66%
34%
 2. If it meant your fare was half that of a seated passenger would you stand on a one hour flight?
42%
58%
 3. Do you think passengers should have a choice of standing on short flights as they currently do on trains, buses and underground transport?
60%
40%

Ryanair’s Stephen McNamara said: : “With 120,000 passengers voting and 80,000 saying they would stand on board, Ryanair will continue to explore the concept of ‘fare free standing’ flights with Boeing and the relevant aviation authorities in the US and EU“. We are looking forward to this exploration, as it would only work for short, commuting flights. If an airplane is equipped with let’s say 50 standing “seats” besides the regular seats – it can only be used on such routes and can not be rotated to a longer a flight – unless it gets re-seated, or only sells the regular seats (at reduced capacity). This is very unlikely in our opinion, especially at Ryanair, as they already work with a very low turn-around time – that would leave no room for reorganization of the cabin. This would also break one of the foundations of the low-fare business model – the unified fleet, as rotation of aircraft and yield management would have to consider special cases for a few aircraft which would add to the maintenance overhead – in terms of scheduling and reservation systems. It is not yet know if such seating areas would require more or less cabin staff, how children would be handled with such tickets, how would the open seating work for check-in and boarding, etc. We’ll keep an eye on this development, though.

Here is a funny video about Ryanair’s idea (posted on their own website…): http://www.youtube.com/watch?v=ymLWycAPZaQ

by balint01

Flight Review: easyJet

Route: BUDAPEST-London/Gatwick
Travel Date: 05OCT2008

Ticket Purchase

I have bought the ticket through www.easyjet.com, which was very simple and straight forward. After selecting your departue city on the homepage, it narrows down the list of destinations which are directly served from there. Also there is an option to indicate if you’re flexible about your dates. As I was on a business trip, this was not an option for me, I had to leave on a Sunday as the Monday schedule from Budapest to London pretty much destroys the full business day, thus it’s not an option… (I think with the winter 2008 timetable this flight has been rescheduled as an evening flight.) The Search Results still show 3 days, even though I have opted not to be flexible with my dates…

The least fair step of the booking process, comes after selecting your flight, where additional services are already added to your flight by default and the price of course is increased. This page looks very crowded, with loads of information presented in a number of different stlyed boxes below each other, making it hard to read and find the important information (“I’m charged with extra stuff”), which seems to be lost among the colored text and symbols. Third party taxes are of course OK, but why do I have to be automatically opted-in to Travel Insurance and 1 checked-in luggage with their associated costs? I can somewhat understand the luggage as probably the average traveller takes 1 larger, non-carry-on bag with them, but the insurance is really something that should not be opted-in by default! I can still add other items to the service, such as Speedy Boarding, additional luggage, and special sports equipment. This is the step when I can also opt-in to compensate my CO2 emmissions of the flight(s) booked. After having actively removed the Travel Insurance and the Checked-in luggage fee, I can continue to the next page to provide my traveller details, etc. Based on my preferred credit card type, I’m again charged with the extra Credit Card Transactional Fee. Only Visa Electron is transaction fee free… Once paid, I can already check-in if my flight is within 3 months from now! This is a very nice solution!

Offsetting Carbon Emissions 

Offsetting Carbon Emissions is very easy and simple with easyJet. As I already mentioned after selecting your flight you are presented with a very loaded page where you can opt-in for extras. One of those is the CO2 offsetting schema, that has already calculated the amount you should pay for this “service” and you can opt-in with just one simple click.

easyJet Airbus A319 (G-EZBU) c by Martin Stephen on airliners.net

easyJet Airbus A319 (G-EZBU) c by Martin Stephen on airliners.net

Check-In

I chose to check-in online, immediately after finishing my booking. It opens 3 months before the actual flight, it’s very simple, and you can print your boarding pass at the end of the process. It is very convenient as you can proceed straight to the gate with that piece of paper. The only worry I would have is that if I’m checked in 3 months in advance for a flight, I may simply forget about it… 🙂 As easyJet is using “Open seating“, there are no seats assigned to the passengers, you can look for a free seat you like and just take it once you’re on the aircraft. With the internet check-in, one is placed in boarding group “A”, that supposedly gets on board after those who have purchased the “Speedy Boarding” service – to guarantee themselves as among the first people to enter the airplane. There is another group following “A”, which is “B” and includes those who checked-in at the airport. They are the last ones to get on the plane and can only select from “left-over” seats.

1. BUDAPEST – LONDON GATWICK (EZY 5444)

Aircraft: Airbus A319 (G-EZBU)
Class: Economy (one class layout)
Punctuality: Flight took off 2 minutes late, arrived exactly on time.
Boarding: By bus, thus the above described boarding groups were hard to coordinate I think. As I took the aft door of the plane after getting out of the bus, I probably entered the plane with my “A” group Boarding pass earlier than some of those going through the front door and having “Speedy Boarding”… I got a window seat without any problems. Flight was less-than half house, with plenty of free seats, I was the only one in my row on my side.
Seats: Regular seats with less-than average legroom
Flight Attendants: There were 4 of them, 2 young girls and 1 guy plus 1 older purser. Two of the girls were good looking, all of them were very friendly.
Meals: Meals are offered at an additional cost, you can select from a range of sandwiches and drinks including alcoholic drinks. Those who selected a warm sandwhich, had to wait about 20 mins before they got their heated up food.
In-Flight shopping: In-flight shopping contains a selected range of items. I have purchased a limited series easyJet model plastic aircraft only, as the parfume I wanted to buy for my wife has already ran out.
Entertainment: No LCD screens or such, only the In-Flight magazine of easyJet plus the In-Flight Shopping guide of course. Bring your own reading material and music player!

Onboard easyJet

Onboard easyJet

Overall Experience

It was exactly what I paid for: transportation from Budapest to London Gatwick, in a timely, correct manner without any frills. I would take this flight again, but only if I ever want to leave on a business trip on a Sunday afternoon as the schedule is not really good for travellers originating in Budapest. Totally wrong schedule for any Hungarian business travellers, as the flight leaves in the afternoon and returns from London in late morning, but probably suits London business people just OK. The pricetag: this one way flight costed HUF 41.400 or USD 255, with the purchase taking place 10 days before the departure.

by balint01


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