Forum Archive Index - May 2001

["tennyson@caverock.net.nz" <tennyson@caverock.net.nz>]

>
>Snoopy and others 
> 
>Did you catch that good news story about a profitable successful
>airline that appeared  in the same Businessweek that Ben had a 
>link to earlier?
> 
>Good story
> 
>http://www.businessweek.com/magazine/content/01_20/b3732016.htm
> 

Peter, thanks for pointing the story out.

The recipe for success:
1/Continuing to chip away at operating costs, meaning flights are 
profitable at 50% loading.
2/Standardize on one type of aircraft to keep down servicing costs

Seems to be goals that Air New Zealand/Freedom Air/Ansett are 
pursuing too.

I see Ryanair are funding their planes by paying 15% of the purcahse 
price and borrowing the rest.   If they can do that successfully, why 
can't Ansett do the same in Australia?  Looks like Toomey is on to 
it.   Ansett can have a new fleet without putting too much cash down!

Air New Zealand have already cut travel agent fees, and are investing 
heavily in their computer reservation systems, just as Ryanair have 
done.   Air NZ is starting to seriously promote booking through 
their website too, aka Ryanair.  I note that Ryanair was unprofitable 
for four years after its formation.  I wonder if, say, Virgin Blue 
will be that patient?

The idea of flying into secondary airports to save landing fees seems 
to be a key part of the Ryanair strategy.   Maybe Virgin Blue will 
start flying Paraparaumu to Whenuapai and give AIA and AIR NZ some 
real competition!   And some of these secondary airports in Europe 
are privatised ex military bases, increasing the parallel further!

There is one area where the parallel doesn't quite ring true though.  
I can't see Selwyn Cushing playing soccer against the baggage staff-  
although Gary Toomey might!

It actually makes me feel better about continuing to hold Air NZ 
shares after reading the article.  Thanks again.
SNOOPY



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