First Max
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Re: First Max
Go Big is also relative. In any scenario you need to reach 10 a/c to begin taking advantage of economies of scale. So a quick ramp up to 10-25 a/c is a sound strategy and is not a Go Big strategy in my books.
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Re: First Max
The way I see it, a true independent ULCC has never been tried in Canada. Not an airline in an airline, not a lower fee structure flown by the same (or some of the same) people, not a charter focusing on seasonal demand, a true ULCC. Time will tell.
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Re: First Max
Jetsgo was a truly independent ULCC, but it was such an operational shit show it was doomed from day one.
The Canadian airline scene was very different in 1997 when Westjet started so I would suggest that it’s success as a start up is not necessarily something that can be directly extrapolated to today’s airline environment.
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Re: First Max
https://www.theglobeandmail.com/report- ... e20420576/Big Pistons Forever wrote: ↑Wed Jun 23, 2021 10:24 amJetsgo was a truly independent ULCC, but it was such an operational shit show it was doomed from day one.
The Canadian airline scene was very different in 1997 when Westjet started so I would suggest that it’s success as a start up is not necessarily something that can be directly extrapolated to today’s airline environment.
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Re: First Max
I don't see their business model as having been in line with the successful ULCCs in the world at all. They had 2 aircraft types neither of which were on the cutting edge of efficiency for their time. They had 2 seat class fares which is not ULCC at all. Being a ULCC isn't just about cheap fares.Big Pistons Forever wrote: ↑Wed Jun 23, 2021 10:24 am
Jetsgo was a truly independent ULCC, but it was such an operational shit show it was doomed from day one.
...
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Re: First Max
Realitychex wrote: ↑Wed Jun 16, 2021 9:05 am Anyone who’s been around the industry, and especially around startups world wide knows the perils of rapid expansion prior to achieving consistent profitability.
Jetsgo was the Canadian poster child for this strategy. When cash became tight, as it perpetually was at SG, they simply announced further expansion and used tomorrow’s advance booking dollars to pay today’s bills.
Come mid August, Flair will announce a slew of $39 fares from Canada to sun destinations that, even with ancillary revenue, don’t even cover the trans border fixed costs and fees charged by the US and Canadian governments. But that’s not the point. When they do it, it will be to generate an immediate surge of cash to pay today’s bills as they watch the post Labor Day bookings cliff develop.
Yet here we are in 2021 with another new entrant blazing away, expanding like a weed with no strategic vision other than to cover as much territory as possible with as few airframes as possible, charging fares that were unsustainable 25 years ago with $15 bbl oil and comp packages roughly 60% of today’s rates.
It’s basically a Ponzi scheme. It works until you run out of Grande Prairies with 189 seat jets, (recall WS operated 120 seats in the day...big difference), It’s all very predictable and rarely ends well.
Flair is nothing if not predictable.
As pointed out earlier, the game is to continuously announce expansion, using tomorrow’s revenues to pay today’s bills. Things will always look rosy when you have the expenses associated with X tails, but revenues flowing in on the basis of selling seats on 1.4X or more tails into new markets. It works on a cash flow basis as long as that ratio exists. But cash flow doesn’t translate to revenues exceeding expenses. Big difference, See Michel Leblanc and countless others for details.
Jetsgo did exactly the same thing in 2004 / 2005, trying to rely on those short bursts of “expansion excitement revenue” to underwrite massive over expansion without having developed a coherent, integrated and robust feed / flow network, not to mention the training, systems and infrastructure to ensure the operation was sustainable 7 days a week, 365 days a year. Flair is trying to accomplish in a year what it’s successful role models did operating in massively larger markets in 5-7 years.
It’s the universal mistake made by people who simply don’t understand the nuances of operating in the high tax Canadian marketplace with a market at least 1/12th the size of the US with far
more peculiar travel habits and patterns.
It amazes me that they think that following exactly the same predictable strategy as all the previous tombstone airlines in Canada and elsewhere will somehow result in a different outcome.
Enjoy the ride whilst it lasts.
There are no shortcuts in any aspect of this business. And that starts with a slick, easy to use on line booking engine. Trying to navigate Flairs website on an iPad is a joke.
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Re: First Max
Realitychex wrote: ↑Thu Jul 08, 2021 8:44 amRealitychex wrote: ↑Wed Jun 16, 2021 9:05 am Anyone who’s been around the industry, and especially around startups world wide knows the perils of rapid expansion prior to achieving consistent profitability.
Jetsgo was the Canadian poster child for this strategy. When cash became tight, as it perpetually was at SG, they simply announced further expansion and used tomorrow’s advance booking dollars to pay today’s bills.
Come mid August, Flair will announce a slew of $39 fares from Canada to sun destinations that, even with ancillary revenue, don’t even cover the trans border fixed costs and fees charged by the US and Canadian governments. But that’s not the point. When they do it, it will be to generate an immediate surge of cash to pay today’s bills as they watch the post Labor Day bookings cliff develop.
Yet here we are in 2021 with another new entrant blazing away, expanding like a weed with no strategic vision other than to cover as much territory as possible with as few airframes as possible, charging fares that were unsustainable 25 years ago with $15 bbl oil and comp packages roughly 60% of today’s rates.
It’s basically a Ponzi scheme. It works until you run out of Grande Prairies with 189 seat jets, (recall WS operated 120 seats in the day...big difference), It’s all very predictable and rarely ends well.
Flair is nothing if not predictable.
As pointed out earlier, the game is to continuously announce expansion, using tomorrow’s revenues to pay today’s bills. Things will always look rosy when you have the expenses associated with X tails, but revenues flowing in on the basis of selling seats on 1.4X or more tails into new markets. It works on a cash flow basis as long as that ratio exists. But cash flow doesn’t translate to revenues exceeding expenses. Big difference, See Michel Leblanc and countless others for details.
Jetsgo did exactly the same thing in 2004 / 2005, trying to rely on those short bursts of “expansion excitement revenue” to underwrite massive over expansion without having developed a coherent, integrated and robust feed / flow network, not to mention the training, systems and infrastructure to ensure the operation was sustainable 7 days a week, 365 days a year. Flair is trying to accomplish in a year what it’s successful role models did operating in massively larger markets in 5-7 years.
It’s the universal mistake made by people who simply don’t understand the nuances of operating in the high tax Canadian marketplace with a market at least 1/12th the size of the US with far
more peculiar travel habits and patterns.
It amazes me that they think that following exactly the same predictable strategy as all the previous tombstone airlines in Canada and elsewhere will somehow result in a different outcome.
Enjoy the ride whilst it lasts.
There are no shortcuts in any aspect of this business. And that starts with a slick, easy to use on line booking engine. Trying to navigate Flairs website on an iPad is a joke.
Yeah… Flair’s CEO doesn’t know anything about this type of business… he’s new. Lol
Re: First Max
Realitychex wrote: ↑Thu Jul 08, 2021 8:44 amRealitychex wrote: ↑Wed Jun 16, 2021 9:05 am Anyone who’s been around the industry, and especially around startups world wide knows the perils of rapid expansion prior to achieving consistent profitability.
Jetsgo was the Canadian poster child for this strategy. When cash became tight, as it perpetually was at SG, they simply announced further expansion and used tomorrow’s advance booking dollars to pay today’s bills.
Come mid August, Flair will announce a slew of $39 fares from Canada to sun destinations that, even with ancillary revenue, don’t even cover the trans border fixed costs and fees charged by the US and Canadian governments. But that’s not the point. When they do it, it will be to generate an immediate surge of cash to pay today’s bills as they watch the post Labor Day bookings cliff develop.
Yet here we are in 2021 with another new entrant blazing away, expanding like a weed with no strategic vision other than to cover as much territory as possible with as few airframes as possible, charging fares that were unsustainable 25 years ago with $15 bbl oil and comp packages roughly 60% of today’s rates.
It’s basically a Ponzi scheme. It works until you run out of Grande Prairies with 189 seat jets, (recall WS operated 120 seats in the day...big difference), It’s all very predictable and rarely ends well.
Flair is nothing if not predictable.
As pointed out earlier, the game is to continuously announce expansion, using tomorrow’s revenues to pay today’s bills. Things will always look rosy when you have the expenses associated with X tails, but revenues flowing in on the basis of selling seats on 1.4X or more tails into new markets. It works on a cash flow basis as long as that ratio exists. But cash flow doesn’t translate to revenues exceeding expenses. Big difference, See Michel Leblanc and countless others for details.
Jetsgo did exactly the same thing in 2004 / 2005, trying to rely on those short bursts of “expansion excitement revenue” to underwrite massive over expansion without having developed a coherent, integrated and robust feed / flow network, not to mention the training, systems and infrastructure to ensure the operation was sustainable 7 days a week, 365 days a year. Flair is trying to accomplish in a year what it’s successful role models did operating in massively larger markets in 5-7 years.
It’s the universal mistake made by people who simply don’t understand the nuances of operating in the high tax Canadian marketplace with a market at least 1/12th the size of the US with far
more peculiar travel habits and patterns.
It amazes me that they think that following exactly the same predictable strategy as all the previous tombstone airlines in Canada and elsewhere will somehow result in a different outcome.
Enjoy the ride whilst it lasts.
There are no shortcuts in any aspect of this business. And that starts with a slick, easy to use on line booking engine. Trying to navigate Flairs website on an iPad is a joke.
Bullcrap. The aircraft are arriving and you need to place them on routes. The announcements are for the upcoming season (winter) which is no different than any other airline. You announce, open your schedule for purchase and off you go. In most cases, for most routes the early bookings are thin but you need them in the system. In Flair's case there are new routes as the Cdn summer routes decline and are shifted southerly.
Re: First Max
Seems like it would make more sense to up the domestic frequency in Canada, no? More flights on the same routes... would help with IROPS as well when planes go mechanical. Not waiting 24 hours for the next flight etc... = pissed off passengers. The benefit AC and WJ have, is the route structure to be able to filter people to their destination when things go awry. Flair is going to have trouble. Sunwing was already notorious for this when flights to vacation destinations had issues. Sometimes people waiting up to 3 days to get to their vacation, cutting into their time at the beach.Soyer wrote: ↑Thu Jul 08, 2021 12:46 pmRealitychex wrote: ↑Thu Jul 08, 2021 8:44 amRealitychex wrote: ↑Wed Jun 16, 2021 9:05 am Anyone who’s been around the industry, and especially around startups world wide knows the perils of rapid expansion prior to achieving consistent profitability.
Jetsgo was the Canadian poster child for this strategy. When cash became tight, as it perpetually was at SG, they simply announced further expansion and used tomorrow’s advance booking dollars to pay today’s bills.
Come mid August, Flair will announce a slew of $39 fares from Canada to sun destinations that, even with ancillary revenue, don’t even cover the trans border fixed costs and fees charged by the US and Canadian governments. But that’s not the point. When they do it, it will be to generate an immediate surge of cash to pay today’s bills as they watch the post Labor Day bookings cliff develop.
Yet here we are in 2021 with another new entrant blazing away, expanding like a weed with no strategic vision other than to cover as much territory as possible with as few airframes as possible, charging fares that were unsustainable 25 years ago with $15 bbl oil and comp packages roughly 60% of today’s rates.
It’s basically a Ponzi scheme. It works until you run out of Grande Prairies with 189 seat jets, (recall WS operated 120 seats in the day...big difference), It’s all very predictable and rarely ends well.
Flair is nothing if not predictable.
As pointed out earlier, the game is to continuously announce expansion, using tomorrow’s revenues to pay today’s bills. Things will always look rosy when you have the expenses associated with X tails, but revenues flowing in on the basis of selling seats on 1.4X or more tails into new markets. It works on a cash flow basis as long as that ratio exists. But cash flow doesn’t translate to revenues exceeding expenses. Big difference, See Michel Leblanc and countless others for details.
Jetsgo did exactly the same thing in 2004 / 2005, trying to rely on those short bursts of “expansion excitement revenue” to underwrite massive over expansion without having developed a coherent, integrated and robust feed / flow network, not to mention the training, systems and infrastructure to ensure the operation was sustainable 7 days a week, 365 days a year. Flair is trying to accomplish in a year what it’s successful role models did operating in massively larger markets in 5-7 years.
It’s the universal mistake made by people who simply don’t understand the nuances of operating in the high tax Canadian marketplace with a market at least 1/12th the size of the US with far
more peculiar travel habits and patterns.
It amazes me that they think that following exactly the same predictable strategy as all the previous tombstone airlines in Canada and elsewhere will somehow result in a different outcome.
Enjoy the ride whilst it lasts.
There are no shortcuts in any aspect of this business. And that starts with a slick, easy to use on line booking engine. Trying to navigate Flairs website on an iPad is a joke.
Bullcrap. The aircraft are arriving and you need to place them on routes. The announcements are for the upcoming season (winter) which is no different than any other airline. You announce, open your schedule for purchase and off you go. In most cases, for most routes the early bookings are thin but you need them in the system. In Flair's case there are new routes as the Cdn summer routes decline and are shifted southerly.
Expanding like they are into what, 6 major American cities seems a bit ill conceived. Unless they can service all of them daily, it's going to probably cause more problems than they realize once they have to deal with delays, or crews timing out.
Flair has the perfect opportunity to be the Westjet of 2021+. Do what WJ used to do... fly to a number of Canadian cities regularly at low rates.
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Re: First Max
“Yeah… Flair’s CEO doesn’t know anything about this type of business… he’s new”
Well, Air New Zealand isn’t exactly a low cost operation, and Freedom Air is a distant memory, even at ANZ.
Wizz Air had, (and has), a massive sandbox to play in and enjoyed feasting off some pretty inept competition in its core geography. O&D is a no brainer in that sort of environment.
3 years at Wizz, 14 years after the heavy lifting was done is not as impressive a feat as if he’d been the guy who profitably took the company from startup to the first 20 tails.
Canada has 37m people, 6 time zones, and a lot of empty space. It’s not difficult to fill airplanes at compensatory rates without a network for about 140 days a year in Canada, but the other 225 days?
Good luck.
Therein lies the difference in Canada and the reason why there’s a very long list of failed airlines who tried to replicate a strategy that works when you can tap into a population of 350 million people with a massive collective propensity to travel for both business and leisure vs one that is 1/10th that size in a fundamentally destimulative high tax, high cost environment.
Without a core network with enough frequency to to attract higher yielding fares as well as generating feed, flow and through traffic to sustain the business during the 225 dog days of the year, rolled out in a comprehensive and systematic fashion, something Flair has vehemently avoided doing in favor of willy nilly expansion everywhere, the independent ULCC Flair model, in my opinion, is doomed.
Well, Air New Zealand isn’t exactly a low cost operation, and Freedom Air is a distant memory, even at ANZ.
Wizz Air had, (and has), a massive sandbox to play in and enjoyed feasting off some pretty inept competition in its core geography. O&D is a no brainer in that sort of environment.
3 years at Wizz, 14 years after the heavy lifting was done is not as impressive a feat as if he’d been the guy who profitably took the company from startup to the first 20 tails.
Canada has 37m people, 6 time zones, and a lot of empty space. It’s not difficult to fill airplanes at compensatory rates without a network for about 140 days a year in Canada, but the other 225 days?
Good luck.
Therein lies the difference in Canada and the reason why there’s a very long list of failed airlines who tried to replicate a strategy that works when you can tap into a population of 350 million people with a massive collective propensity to travel for both business and leisure vs one that is 1/10th that size in a fundamentally destimulative high tax, high cost environment.
Without a core network with enough frequency to to attract higher yielding fares as well as generating feed, flow and through traffic to sustain the business during the 225 dog days of the year, rolled out in a comprehensive and systematic fashion, something Flair has vehemently avoided doing in favor of willy nilly expansion everywhere, the independent ULCC Flair model, in my opinion, is doomed.
Re: First Max
I don’t want to say realitychex was right but……
https://canadianaviator.com/flair-share ... dium=email
https://canadianaviator.com/flair-share ... dium=email
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Re: First Max
Cancelling the expansion would cripple the airline. I doubt a court will issue an injunction against Flair.fish4life wrote: ↑Sat Jul 10, 2021 2:42 pm I don’t want to say realitychex was right but……
https://canadianaviator.com/flair-share ... dium=email
Re: First Max
Read the article linked in that one, they owe 140 mill at 18% interestnotwhoyouthinkIam wrote: ↑Sat Jul 10, 2021 3:20 pmCancelling the expansion would cripple the airline. I doubt a court will issue an injunction against Flair.fish4life wrote: ↑Sat Jul 10, 2021 2:42 pm I don’t want to say realitychex was right but……
https://canadianaviator.com/flair-share ... dium=email
Re: First Max
The suit acknowledges they can't stop the expansion. The resolution requested is that the previous CEO be paid out for his shares.
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Re: First Max
Still you can literally get credit cards with lower interest rates, InotwhoyouthinkIam wrote: ↑Sat Jul 10, 2021 5:42 pmLOL not quite. Apparently Money Mart charges 46.9% APR.
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Re: First Max
Flair CEO was just on CKNW radio in Vancouver (Sunday morning) talking about how he will get foreign pilots with 20-25000 hours coming to work for him. I think he said from the US.
Re: First Max
He said that they are getting half their pilots from Canada and half from overseas. That most have 20-25 years experience and are mostly returning from overseas due to lack of work.RRJetPilot wrote: ↑Sun Jul 11, 2021 9:03 am Flair CEO was just on CKNW radio in Vancouver (Sunday morning) talking about how he will get foreign pilots with 20-25000 hours coming to work for him. I think he said from the US.
Didn’t mention US pilots or number of flying hours.
https://globalnews.ca/pages//audio-vault-cknw/
Discussion starts at around 8:17 on July 11