Flybe nosedives on profits warning

[Albert Tatlock]

1 hour ago, John Wright said:

What makes you think the steam packet is receiving a subsidy. 

It cut down sailings March to May. It owns the boats, no lease or finance charges, unlike airlines. Fewer sailings, less fuel costs and fewer crew.

The freight will cover operating costs. Manannan is tied up for the winter. I’m surprised they aren’t just allowing passengers only on one sailing each way each day. That also cuts down on crewing.

I suspect they'll just post a big loss (or big profit drop) at the end of the year....and government will take the hit on the taxpayer chip-in to the new boat.

[John Wright]

17 minutes ago, Boris Johnson said:

I was told that during that period with running the 2 boats mostly empty they were eating through a £mill/ week, may have been a mill a month? I don't know how true this is but it came from a sensible person with connections in the industry.

Memory is that turnover for 2017 and 2018 was roughly £60m divided £30m passenger and £22m freight,  and £6m shop/restaurant sales and £1.5m investment income and other sales. on that they were making £11m. They had £13m cash reserves at end 2018.

There will have been reduced overheads during 2020, fewer sailings, fewer staff, less fuel. freight income will have held up. Arrow has been chartered out. But there will have been some passenger income. 

Certainly wouldn’t have been a £1m per week burn.
 

[tetchtyke]

1 hour ago, Boris Johnson said:

I was told that during that period with running the 2 boats mostly empty they were eating through a £mill/ week, may have been a mill a month? I don't know how true this is but it came from a sensible person with connections in the industry.

I've heard that the operating costs for the Ben are about £20k per return sailing. Freight has stayed relatively stable even if passenger numbers haven't. So I'd be surprised if losses are as high as a million a month, they certainly won't be a million a week, but I'm sure they will be making a loss.

Edited November 16, 2020 by tetchtyke

[tetchtyke]

5 hours ago, NoTailT said:

 

The fact that Loganair said they were going to pull all of the routes UNLESS IOM PLC awarded them the patient transfer contract is abysmal. They're no supported of our Island any more than easyjet is.

All airlines are commercial organisations. The flights that are running have 10-15 people on them, other than the patient transfer flights. So of course they're not going to fly unless their losses are covered, they are not a charity. And, unlike with the boat and the linkspan, it's not like you can force them to run a service by restricting access if they don't.

Question is, is paying Loganair cheaper than setting up an Aurigny-style state airline?

[John Wright]

Just now, tetchtyke said:

Just now, tetchtyke said:

Question is, is paying Loganair cheaper than setting up an Aurigny-style state airline?

Short term or long term?  There’s a lot of subsidy to be had in avoiding £10 million a year loss. And set up costs wouldn’t be cheap.

[jaymann]

2 minutes ago, John Wright said:

Short term or long term?  There’s a lot of subsidy to be had in avoiding £10 million a year loss. And set up costs wouldn’t be cheap.

To me that isn't the question.

The real question is, how or was this tendered and is there not a cheaper alternative operator who won't act as was described above towards the Government and our Island?

Edited November 16, 2020 by jaymann

[John Wright]

16 minutes ago, tetchtyke said:

I've heard that the operating costs for the Ben are about £20k per return sailing. Freight has stayed relatively stable even if passenger numbers haven't. So I'd be surprised if losses are as high as a million a month, they certainly won't be a million a week, but I'm sure they will be making a loss.

Think you’re on the high side. But, assuming you’re correct, and based on 26 crossings a week for 48 weeks ( annual overhaul and sailings missed due to weather ) gives operating costs of £25m against freight operating income of approx £22m

Of course for 15 weeks Ben only sailed 14 trips a week, freight only, no passengers - so substantially reduced crew. 
 

 

[tetchtyke]

7 minutes ago, jaymann said:

To me that isn't the question.

The real question is, how or was this tendered and is there not a cheaper alternative operator who won't act as was described above towards the Government and our Island?

British Airways pulled out, Aer Lingus/Stobart and EasyJet aren't coming back till the borders open, Flybe went bust. Other than Eastern Airways, who were due to fly twice-weekly to Teesside over the summer but pulled it due to Covid, I'm not sure how much of a competitive tender you're expecting?

[jaymann]

5 minutes ago, tetchtyke said:

British Airways pulled out, Aer Lingus/Stobart and EasyJet aren't coming back till the borders open, Flybe went bust. Other than Eastern Airways, who were due to fly twice-weekly to Teesside over the summer but pulled it due to Covid, I'm not sure how much of a competitive tender you're expecting?

Judging by how many operators bid for the Lingus regional contract recently, more than you'd think.

Stobart /Lingus would pick up the routes here, they've already talked about it with Gov. Eastern would. Plus at least another 3 operators I can think of, including BA.

[NoTailT]

If it’s a tender that ran for say 6months at a time, I can see lots of operators going for it to be honest. Underwritten flying is why Loganair is here, plenty of other operators would snap at the same opportunity and if anything maybe offer better pricing.

[tetchtyke]

14 minutes ago, jaymann said:

Judging by how many operators bid for the Lingus regional contract recently, more than you'd think.

Stobart /Lingus would pick up the routes here, they've already talked about it with Gov. Eastern would. Plus at least another 3 operators I can think of, including BA.

Stobart losing the Aer Lingus Regional contract is likely to be the final nail in their coffin, if they survive the year I'll be astounded. Which will be useful for Emerald Airlines, a new airline with no planes and no history but with a boss who used to work for Aer Lingus, who have won the next Regional contract.

Stobart were running most of the Flybe stuff here anyway, as well as the Dublin flight which they also pulled, so there will be a reason why they couldn't or wouldn't just carry on.

BA? They didn't even bother themselves to fly here when times were good.

Edited November 16, 2020 by tetchtyke

[jaymann]

3 minutes ago, tetchtyke said:

Stobart losing the Aer Lingus Regional contract is likely to be the final nail in their coffin, if they survive the year I'll be astounded. Which will be useful for Emerald Airlines, a new airline with no planes and no history but with a boss who used to work for Aer Lingus, who have won the next Regional contract.

Stobart were running most of the Flybe stuff here anyway, as well as the Dublin flight which they also pulled, so there will be a reason why they couldn't or wouldn't just carry on.

BA? They didn't even bother themselves to fly here when times were good.

The contract is still valid to 2023. No immediate concerns for Stobart.

My point is that there are other options out there who I suspect would offer better value to the taxpayers coffers and be far less demanding of the Government which could ultimately leave us with no routes at all again until a new operator is found once more.

[Banker]

Been reported in Guernsey budget today that Aurigny losses were £24m this year and losses continue at £2m pm.

[madmanxpilot]

37 minutes ago, John Wright said:

Short term or long term?  There’s a lot of subsidy to be had in avoiding £10 million a year loss. And set up costs wouldn’t be cheap.

Aurigny were talking to IOMG earlier this year about a joint venture. Despite the significant synergies and resulting cost savings  from running services for both Islands, once IOMG realised that their hands were going to have to go in their pockets, they balked at the idea.  Then came Covid and the Flybe collapse and as far as I know, the talks never continued in the same vein. It may be semantics, but Aurigny's 'loss' really is the 'cost' of providing continuity and control of air services - something totally lacking here.

[NoTailT]

7 minutes ago, madmanxpilot said:

Aurigny were talking to IOMG earlier this year about a joint venture. Despite the significant synergies and resulting cost savings  from running services for both Islands, once IOMG realised that their hands were going to have to go in their pockets, they balked at the idea.  Then came Covid and the Flybe collapse and as far as I know, the talks never continued in the same vein. It may be semantics, but Aurigny's 'loss' really is the 'cost' of providing continuity and control of air services - something totally lacking here.

I’m pretty sure Brian Kelly was pushing that agenda during the peak of the air bridge days too. He must have had skin in the game, or he wouldn’t have bothered.