Budget Airline Blog

Sir Richard Branson’s Virgin Group is to fund Australian budget airline Virgin Blue through its financial woes. The carrier has admitted to fears of full-year losses

The Virgin Group, who own 25.5 per cent of Virgin Blue, has committed to buying 305 million further shares in the company. Branson aims to inject £40m to help out the carrier, which is predicting losses of over £80m for this financial year.

Whilst Virgin Blue, Australia’s second-largest airline, continues to make profits from its short-haul flights, where their market share has increased to 30 per cent, their long-haul wing, V Australia has been hit hard by the recession, making massive losses.

In an attempt to raise capital, the airline has also released heavily discounted shares, raising $133 million (AUD) so far from institutional investors, with an additional $98 million expected from retail investors.

The recession seems to be hitting the UK budget airlines differently. Whilst Ryanair have doubled cutbacks from Stanstead for the upcoming season, Easyjet are confident in meeting predicted end of year profit targets.

Ryanair has reduced the number of flights departing from London Stanstead by 30 per cent from October. Despite these cutbacks, the budget airline has said it has reduced fares on flights by a 13 per cent average. However, despite this attempt to attract more custom, net profits for the year are expected to fall short of the estimated figures.

However rivals Easyjet maintain they should reach their end of year profit margins, confidence stemming from third quarter revenues rising 12 per cent. Plans for the future include an expansion of 35 new aircraft by 2012, although founder Stelios Haji-Ioannou is said to be concerned over the proposed rate of expansion.

If you are flying with Easyjet or Ryanair you should take out appropriate travel medical insurance too as EHIC cards might not cover you for all issue.

We have experienced overcrowding on trains and buses but now face the horror of it happening on planes.  A famous Irish Airline wants to introduce a standing area on planes to fill up more space and save the air carrier 20 per cent in costs and allow it to fit 30 per cent more passengers on its planes.

Allocation on arrival, you will be given a stool and an attached seat belt, nice to see  that they are taking their safety seriously- not!

Discussion are in the making for the new planes to install these standing areas.  They are even considering asking the passengers to even carry their own luggage on board and the worst to come, pay for toilet use when on board the plane.

Whatever ever next, they might even ask the customers to fly the plane.

A recent survey taken on budget using airline customers have proved that cheap does not always mean cheerful.  Budget Airlines are failing to provide the measured expectations.

The cheaper airlines carry more bad mannered and loud customers. Cramped seats, delayed flights, long check in queues, hidden charges such as extra baggage costs, screaming children and rude and unhelpful staff are the delights we now face with these budget carriers.

Is  taking the budget airlines verses scheduled ones actually now worth taking the difference?

New airline Firefly, a subsidiary of Malaysia Airlines, has this month begun routes from Singapore’s Changi airport.

It is the fourth new airline to join the airport this year and currently flies three daily flights from Singapore to Kuala Lumpur.

The airline is now the third airline to be based at the Budget Terminal, and despite offering a promotional one way fare of $31 all in for its Malaysian destinations, Firefly has been careful to avoid the traditional associations of budget airlines.

Managing director Eddy Leong pointed out that unlike many no-frills budget airlines, Firefly offers services such as a free baggage allowance of up to 20 kg, complimentary in-flight refreshments and allocated seats.

FIrefly hopes to be viewed instead as a ‘community airline’.

The newest cost-cutting venture from budget airline Ryanair is to get passengers to stand during flights in order to squeeze more people onboard.

By making passengers squat on stools, albeit with seatbelts around their waists, Ryanair estimates it would increase capacity by 30 per cent while slashing costs by 20 per cent.

Chief executive Michael O’Leary has held talks with the plane manufacturer Boeing about designing an aircraft with standing room, an idea initially developed by China’s first private airline, Spring Airlines, who have described the arrangement as akin to ‘bar stools’.

This new proposal follows a series of increasingly far-fetched cost-cutting ventures from the airline, who last month announced plans to make passengers carry all their own luggage up to planes instead of checking them in.

Indonesian no frills airline Indojet are having issues chartering aircraft and authorities in Australia are urging travellers to seek alternative airlines to Bali.

Ross Taylor from the Australia Indonesia Business Council says people should fly with larger carriers to avoid being caught in a similar situation.

“Given the very high level of competition with the low cost larger carriers now, for a few dollars extra it’s a good way of ensuring that you and your family do get to Bali and enjoy your holiday,” he said.