easyJet to face-off with Croatia Airlines in 2010
Croatia Airlines will be in direct competition with the low cost giant easyJet on its prised seasonal summer flights from Split as well as flights from Dubrovnik. The low cost airline will launch new services from Split to Amsterdam, Basel, Berlin and Rome. It will be competing directly with Croatia Airlines on the Amsterdam – Split service. easyJet will also launch flights from Rome to Dubrovnik, once again being in direct competition with Croatia’s national carrier. Croatia Airlines operated flights from Split to Berlin this summer but the route is uncertain for 2010 with the arrival of easyJet. All of easyJet’s flights will commence in June and July of 2010.Meanwhile, ČSA Czech Airlines will launch seasonal summer services to Dubrovnik from Prague. The national Czech carrier will operate 2 weekly flights while it will resume services from Prague to Split. Iberia will also make its presence felt in Dubrovnik this summer with the launch of new seasonal flights from Bilbao. The Spanish flag carrier will also resume summer services from Madrid and Valencia to Dubrovnik.
Finally, Ryanair will introduce a new service from Zadar to Oslo-Rygge Airport. Flights will operate twice per week.
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And this is why OU needs to order ASAP an additional 2 Q400s delivered in 2011 to bring the total in the fleet to 8: seats on offer, and destinations served from main hubs.
ReplyDeleteOU has been in caught in a bind - expand from your main hub (ZAG) with a mixture of O&D and business-serving traffic, or tap into the country's growing coastal leisure markets (potentially lower-yielding). Naturally, they have chased the business customer and gone for the former.
With a smallish fleet it has been impossible to cover both markets properly, but it will force the airline to broaden its horizons and search for new markets. Most destinations are within operation range of a Q and with very low operating costs, makes the airline competitive.
Would double-daily flights to/from Rome be overkill for OU, even only operating Qs? A mixture of direct flights from ZAG (more than the 3-weekly to be operated in summer '10, preferably 5-weekly or daily) and one-stops via coastal airports (SPU, DBV, PUY?) could be an attractive proposition, and provide interesting competition to U2.
OU has a few cards to play for its short-term future:
- continue its ultra-conservative approach and lose overall market share to foreign carriers whilst slowly increasing passengers
- continue to expand and upgrade its fleet, operating higher frequencies and new destinations allowing the business to grow
- commence an agressive expansion program to have a stranglehold on the market, opening a whole range of new destinations across Europe, and possibly Middle East (possibly operating at a loss, offset by leasing spare aircraft out in winter months)
With tourism so important to the Croatian economy, OU can't afford to get it wrong.
A number of these new Easyjet routes operate for only a few months in mid summer, whereas OU fly for the whole of the summer timetable.
ReplyDeleteWell there is already one less lcc with Flyglobespan going into administration this week. The loss of Skyeurope earlier in the year also reduced the lcc potential. I imagine that there are a few more carriers who are running at very tight margins and are susceptible to the slightest change in the market. Ryanair have decided to consolidate and not take an extra 200 aircraft from Boeing. BA are in a mess with their pension fund running into massive deficits that they will never be able to cover. It could be that rather than an increase in competition there could actually be a decrease.
ReplyDelete^
ReplyDeleteAre you for real?
Ryanair have almost $5bn in cash and no debt. BA have over $10bn worth of aircraft assets they can sell to raise cash. Yugoslavia will disappear into the Adriatic before either of them disappear.
As for FlyGlobespan and SkyEurope - the first was never an LCC and SkyEurope was poorly run from the start, and the main investor (York Capital) got the idea from a former Olympic Airlines CEO, which is the closest thing to a death wish one can hope for!