Comments on: Don’t Believe the Hype: Silverjet and Eos Not Looking Good http://boardingarea.com/blogs/onlinetravelreview/2008/01/15/dont-believe-the-hype-silverjet-and-eos-not-looking-good/ The Daily Airline News by Jared Blank Sat, 22 Nov 2008 02:21:42 +0000 http://wordpress.org/?v=2.5.1 By: Seth http://boardingarea.com/blogs/onlinetravelreview/2008/01/15/dont-believe-the-hype-silverjet-and-eos-not-looking-good/#comment-1318 Seth Tue, 22 Jan 2008 23:17:11 +0000 http://boardingarea.com/blogs/onlinetravelreview/2008/01/15/dont-believe-the-hype-silverjet-and-eos-not-looking-good/#comment-1318 It'll be sad to see them go if it comes to that, but the numbers seem to be moving them in that direction. The upstarts didn't take in to account the pricing pressure that the legacies would push on them. And with a whole fleet over which to amoritize the effects of reducing prices on the one route, the legacies are in a very strong position to handle the "situation." Also, I don't see paying that much for a ticket personally, so unless it was a reward I probably wouldn't use it, but it'd be nice for them to stay around long enough for me to have that opportunity :) It’ll be sad to see them go if it comes to that, but the numbers seem to be moving them in that direction. The upstarts didn’t take in to account the pricing pressure that the legacies would push on them. And with a whole fleet over which to amoritize the effects of reducing prices on the one route, the legacies are in a very strong position to handle the “situation.”

Also, I don’t see paying that much for a ticket personally, so unless it was a reward I probably wouldn’t use it, but it’d be nice for them to stay around long enough for me to have that opportunity :)

]]> By: Youngy McFastguy http://boardingarea.com/blogs/onlinetravelreview/2008/01/15/dont-believe-the-hype-silverjet-and-eos-not-looking-good/#comment-1317 Youngy McFastguy Wed, 16 Jan 2008 19:04:50 +0000 http://boardingarea.com/blogs/onlinetravelreview/2008/01/15/dont-believe-the-hype-silverjet-and-eos-not-looking-good/#comment-1317 Awesome piece sir. I thoroughly enjoyed it. Awesome piece sir. I thoroughly enjoyed it.

]]> By: Epstein http://boardingarea.com/blogs/onlinetravelreview/2008/01/15/dont-believe-the-hype-silverjet-and-eos-not-looking-good/#comment-1316 Epstein Wed, 16 Jan 2008 16:04:02 +0000 http://boardingarea.com/blogs/onlinetravelreview/2008/01/15/dont-believe-the-hype-silverjet-and-eos-not-looking-good/#comment-1316 You are spot on. Most of the glowing comments from these upstarts are from internally generated articles. According to input from employees inside the companies, there are severe cash flow problems. Couple that with a contentious, inept management team, employee morale problems as a result of poor management adds to the mix. And then, the final piece. They have been unable to raise ticket prices. These airlines have devalued their own product to the point that, although they have a good concept, through mismanagment, the customer has come to expect a "first class ticket at coach prices". The rise in fuel prices just accelerates their demise. You are spot on. Most of the glowing comments from these upstarts are from internally generated articles. According to input from employees inside the companies, there are severe cash flow problems. Couple that with a contentious, inept management team, employee morale problems as a result of poor management adds to the mix. And then, the final piece. They have been unable to raise ticket prices. These airlines have devalued their own product to the point that, although they have a good concept, through mismanagment, the customer has come to expect a “first class ticket at coach prices”. The rise in fuel prices just accelerates their demise.

]]> By: Jared http://boardingarea.com/blogs/onlinetravelreview/2008/01/15/dont-believe-the-hype-silverjet-and-eos-not-looking-good/#comment-1315 Jared Tue, 15 Jan 2008 19:28:42 +0000 http://boardingarea.com/blogs/onlinetravelreview/2008/01/15/dont-believe-the-hype-silverjet-and-eos-not-looking-good/#comment-1315 Their costs are high because due to the huge fixed costs associated with an running an airline, it's very expensive to run a small airline like this. There's really no such thing as a small airline -- you need a sizable staff even for a carrier with a couple of planes. Add to that the high fuel costs and limited pricing power due to competitors with billions of dollars, and you've got a tough problem. Their costs are high because due to the huge fixed costs associated with an running an airline, it’s very expensive to run a small airline like this. There’s really no such thing as a small airline — you need a sizable staff even for a carrier with a couple of planes. Add to that the high fuel costs and limited pricing power due to competitors with billions of dollars, and you’ve got a tough problem.

]]> By: charlie http://boardingarea.com/blogs/onlinetravelreview/2008/01/15/dont-believe-the-hype-silverjet-and-eos-not-looking-good/#comment-1314 charlie Tue, 15 Jan 2008 19:10:44 +0000 http://boardingarea.com/blogs/onlinetravelreview/2008/01/15/dont-believe-the-hype-silverjet-and-eos-not-looking-good/#comment-1314 Why are their costs so high? The reuters cites fuel and rebooking expenses, but while they can't do much about fuel they could solve the rebooking problem, no? And they have a window with the currency rates. Yes, 800 pounds may not be a lot, but I'm assuming they can buy fuel and other things here -- and they may be able to pay their staff in dollars as well. Also, their target market on the UK side is only going to get larger as casual shoppers attack NYC. Why are their costs so high? The reuters cites fuel and rebooking expenses, but while they can’t do much about fuel they could solve the rebooking problem, no?

And they have a window with the currency rates. Yes, 800 pounds may not be a lot, but I’m assuming they can buy fuel and other things here — and they may be able to pay their staff in dollars as well. Also, their target market on the UK side is only going to get larger as casual shoppers attack NYC.

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