AIRLINE NEWS
Thursday, June 05, 2008
No-frills carriers can weather the storm, says easyJet
Budget airlines will be the biggest victims of soaring fuel costs as fares rise across the industry, the global aviation body warned today.
The head of the International Air Transport Association warned passengers that the era of cheap air travel, spurred by the no-frills carrier phenomenon, will be ended by the oil price spike. The fuel bill for the global airline industry could rise by $50bn (£25.5bn) this year and has put businesses in "emergency mode", said Giovanni Bisignani, Iata chief executive.
Echoing recent comments by British Airways chief executive, Willie Walsh, Bisignani said low-cost airlines face the greatest shock because their business models rely on cheap fares.
"When you add $50bn to the bill, somebody has to take care of the cost. Clearly the fare will have to reflect a cost structure that is different. In this picture, the low-cost carrier will be more affected," he said. Bisignani added that fuel represents 50% of costs for some no-frills carriers, such as Ryanair, while it accounts for 34% of the cost base among Iata members.
In response, Toby Nicol, director of communications at easyJet, said Bisignani represented "vested interests" because Iata is the global body for traditional network carriers such as BA, Air France-KLM and American Airlines. Ryanair and easyJet, in keeping with their low-cost ethos, refuse to sign up to Iata, which charges a membership fee. Nicol added that the biggest casualties in the UK airline market are business class-only carriers. Last week, Luton-based Silverjet joined Eos and Maxjet in closing its operations.
"Those airlines are the polar opposite of easyJet. They are high-fare and long-haul, whereas we are low-fare and short-haul." He added that carriers with the most cash and least debt on their balance sheets, led by Ryanair and easyJet, are more likely to survive the high oil price and weak consumer demand squeeze.
"Those people who have the cash to ride out the storm will be the winners and those who don't will be the losers."
EasyJet said rising fuel costs will benefit short-haul operators because the fuel cost passed on to the passenger is much lower. For instance, fuelling a BA return flight to Miami cost around £60,000 per journey when oil was at $80 per barrel. At $135 per barrel, the cost has climbed to £100,000, which equates to an increased fuel cost of around £133 per passenger. By contrast, the cost in fuel of flying from Luton to Alicante and back with easyjet has doubled to around £20 over the same period, easyJet said.
"If you want a week in the sun, with easyJet you will be paying around £20 per return in fuel costs. If you want to go to the US, you are looking at paying between £180 [for San Francisco] and £130 per person."
Today, a barrel of US crude oil was trading at $126.27.
Source: guardian.co.uk
The head of the International Air Transport Association warned passengers that the era of cheap air travel, spurred by the no-frills carrier phenomenon, will be ended by the oil price spike. The fuel bill for the global airline industry could rise by $50bn (£25.5bn) this year and has put businesses in "emergency mode", said Giovanni Bisignani, Iata chief executive.
Echoing recent comments by British Airways chief executive, Willie Walsh, Bisignani said low-cost airlines face the greatest shock because their business models rely on cheap fares.
"When you add $50bn to the bill, somebody has to take care of the cost. Clearly the fare will have to reflect a cost structure that is different. In this picture, the low-cost carrier will be more affected," he said. Bisignani added that fuel represents 50% of costs for some no-frills carriers, such as Ryanair, while it accounts for 34% of the cost base among Iata members.
In response, Toby Nicol, director of communications at easyJet, said Bisignani represented "vested interests" because Iata is the global body for traditional network carriers such as BA, Air France-KLM and American Airlines. Ryanair and easyJet, in keeping with their low-cost ethos, refuse to sign up to Iata, which charges a membership fee. Nicol added that the biggest casualties in the UK airline market are business class-only carriers. Last week, Luton-based Silverjet joined Eos and Maxjet in closing its operations.
"Those airlines are the polar opposite of easyJet. They are high-fare and long-haul, whereas we are low-fare and short-haul." He added that carriers with the most cash and least debt on their balance sheets, led by Ryanair and easyJet, are more likely to survive the high oil price and weak consumer demand squeeze.
"Those people who have the cash to ride out the storm will be the winners and those who don't will be the losers."
EasyJet said rising fuel costs will benefit short-haul operators because the fuel cost passed on to the passenger is much lower. For instance, fuelling a BA return flight to Miami cost around £60,000 per journey when oil was at $80 per barrel. At $135 per barrel, the cost has climbed to £100,000, which equates to an increased fuel cost of around £133 per passenger. By contrast, the cost in fuel of flying from Luton to Alicante and back with easyjet has doubled to around £20 over the same period, easyJet said.
"If you want a week in the sun, with easyJet you will be paying around £20 per return in fuel costs. If you want to go to the US, you are looking at paying between £180 [for San Francisco] and £130 per person."
Today, a barrel of US crude oil was trading at $126.27.
Source: guardian.co.uk
Labels: EasyJet, low cost airline
Saturday, March 15, 2008
EasyJet chief calls for break-up of BAA
The new chief executive of easyJet, Andy Harrison, called for the break-up of the airports operator BAA yesterday and launched a swinging attack on his low-cost rival Ryanair for being "nasty" to its crew and passengers.
independent.co.uk
independent.co.uk
Saturday, March 08, 2008
EasyJet fears damage to airlines from rising oil price
The biggest danger facing the airline industry is the global oil price, easyJet warned today, after it released strong passenger numbers.
guardian.co.uk
guardian.co.uk
Friday, October 26, 2007
Easyjet agrees to buy GB Airways
Budget airline Easyjet has expanded further by buying UK carrier GB Airways for £103.5m ($212m).
news.bbc.co.uk
news.bbc.co.uk
Labels: British Airways, EasyJet, GB Airways
Friday, October 05, 2007
Easyjet to open two new French hubs in 2008
Europe's second biggest budget airline, easyJet, plans to open two new hubs in France in 2008, stepping up pressure on national carrier Air France.
uk.news.yahoo.com (page not found)
uk.news.yahoo.com (page not found)
Monday, July 16, 2007
Ryanair and Easyjet lose French battle
Easyjet and Ryanair must apply French employment laws to staff operating from the country after a court threw out an attempt by the two budget airlines to bypass local rules.
business.timesonline.co.uk
business.timesonline.co.uk
Sunday, June 17, 2007
'Ecojet' is pie in the sky, say environmentalists
The unveiling of EasyJet's prototype plane that the airline says would cut carbon emissions in half has left environmentalists unimpressed.
guardian.co.uk
guardian.co.uk
Labels: EasyJet, ecoJet, environmental
Thursday, June 14, 2007
EasyJet unveils 'ecoJet'
EasyJet has unveiled the prototype for an aircraft that would produce 50% less CO2 than its existing fleet.
guardian.co.uk
guardian.co.uk
Wednesday, May 09, 2007
Ryanair declares price war
Ryanair has declared a price war against EasyJet and other low cost rivals, slashing 10 million tickets to £10 amid a downward turn in passenger numbers.
guardian.co.uk
guardian.co.uk
Labels: EasyJet, price war, Ryanair
Tuesday, February 27, 2007
EasyJet eyes expansion at Brussels airport
Budget carrier EasyJet is planning to expand its operations at Brussels Airport after starting a service to Geneva at the end of June.
Source: uk.biz.yahoo.com
Source: uk.biz.yahoo.com
Labels: Brussels Airport, EasyJet, Geneva
Wednesday, February 07, 2007
EasyJet predicts 50% growth in profits
EasyJet's first quarter revenues have risen 15 per cent, with passenger numbers rising by 10 per cent, as it joins its close rival Ryanair in predicing a strong financial performance this year.
guardian.co.uk
guardian.co.uk
Labels: EasyJet, profit, revenue
Thursday, January 04, 2007
AirAsia shares fly high
Shares in budget carrier AirAsia have surged more than seven per cent after speculation it is to launch an alliance with Virgin and EasyJet.
theage.com.au
theage.com.au
Labels: Air Asia, EasyJet, Virgin
Monday, January 01, 2007
Virgin, EasyJet, AirAsia forging long-haul alliance
Three of the world's best known budget airlines are in discussions to form a Malaysian based low cost global alliance.
smh.com.au
smh.com.au
Labels: AirAsia, EasyJet, Virgin
Tuesday, November 14, 2006
