These next two slides show the average ASK flown to primary airports and by regional partners divided by the three strategic groups: FSC, LCC, and Regional. Not surprisingly the FSCs fly nearly exclusively to primary airpots, which is complemented by regional partners. LCCs, on the other hand, fly 86% of their ASKs to primary airports, which squashes the concept that only secondary airports are their destinations. Say that to JFK, SFO, CPH, or DEN. The other slide shows how much of a group's ASK is flown by regional partners. The FSCs get, on average, 5% of their ASK covered by a regional partner, while LCCs puddle around at 1%. However, that one 1% is greater than most would ever mention. A regional-feed seed has been planted among LCCs and only time will tell if it sprouts. We read about Frontier's Lynx operation (a wholly-owned rather than CPA agreement) or JetBlue's E190s. These are examples that LCCs realize that thinner, monopoly markets are of interest and that regional partners may be a tool of the future.
Showing posts with label regionals. Show all posts
Showing posts with label regionals. Show all posts
Friday, October 05, 2007
Feed and primary airports
So many students, journalists, and industry observers continue to regurgitate the mantras that LCCs only fly to secondary airports and FSCs use regional carriers to do the majority of their flying. So, I made these graphs for all to see. The first one shows us the growth trend of United Airline's use of regional partners in their network. Unfortunately, the database only offers this level of detail back to 2003, so it is not possible to get a longer look. However, the trend is upward. However, you can see that it's growth rate slowed considerably from 2005 and beyond. In 2007 it was approximately 10%, which is not a lot for the network as a whole, but relative to other FSCs it is double the average.
These next two slides show the average ASK flown to primary airports and by regional partners divided by the three strategic groups: FSC, LCC, and Regional. Not surprisingly the FSCs fly nearly exclusively to primary airpots, which is complemented by regional partners. LCCs, on the other hand, fly 86% of their ASKs to primary airports, which squashes the concept that only secondary airports are their destinations. Say that to JFK, SFO, CPH, or DEN. The other slide shows how much of a group's ASK is flown by regional partners. The FSCs get, on average, 5% of their ASK covered by a regional partner, while LCCs puddle around at 1%. However, that one 1% is greater than most would ever mention. A regional-feed seed has been planted among LCCs and only time will tell if it sprouts. We read about Frontier's Lynx operation (a wholly-owned rather than CPA agreement) or JetBlue's E190s. These are examples that LCCs realize that thinner, monopoly markets are of interest and that regional partners may be a tool of the future.
These next two slides show the average ASK flown to primary airports and by regional partners divided by the three strategic groups: FSC, LCC, and Regional. Not surprisingly the FSCs fly nearly exclusively to primary airpots, which is complemented by regional partners. LCCs, on the other hand, fly 86% of their ASKs to primary airports, which squashes the concept that only secondary airports are their destinations. Say that to JFK, SFO, CPH, or DEN. The other slide shows how much of a group's ASK is flown by regional partners. The FSCs get, on average, 5% of their ASK covered by a regional partner, while LCCs puddle around at 1%. However, that one 1% is greater than most would ever mention. A regional-feed seed has been planted among LCCs and only time will tell if it sprouts. We read about Frontier's Lynx operation (a wholly-owned rather than CPA agreement) or JetBlue's E190s. These are examples that LCCs realize that thinner, monopoly markets are of interest and that regional partners may be a tool of the future.
Monday, September 24, 2007
Route established on a co-op basis
What do you do if your local airline does not offer the non-stop route that you desire? You get support from local businesses and start a co-op to offer the route. This is exactly what a property management firm did in Denmark to start a route from Billund, Denmark to Lviv, Ukraine. The local business market near Billund desired a direct route to an area where many do business but there was a lack on direct connections. UPG, a Danish property management firm, established UPG Airservice, a co-op with local businesses, to provide service to Ukraine using two aircraft from Sun-Air, a Danish regional based in Billund. Any profit from the route will be divided among the co-op owners according to the share of tickets bought.
This is a very innovative way for local businesses to establish the desired routes and for an airline to secure a revenue source for their assets. Depending on the details of the contract there may be limited risk for Sun-Air as the airline may provide capacity on a fee-for-departure contract, similar to US regionals. The 32-seat Dornier jets that Sun-Air use may be the right capacity, although something smaller may allow more of such arrangements.
This is a very innovative way for local businesses to establish the desired routes and for an airline to secure a revenue source for their assets. Depending on the details of the contract there may be limited risk for Sun-Air as the airline may provide capacity on a fee-for-departure contract, similar to US regionals. The 32-seat Dornier jets that Sun-Air use may be the right capacity, although something smaller may allow more of such arrangements.
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