EasyJet to close bases at Stansted, Southend and Newcastle along with over 700 pilots made redundant

[Tetchytyke]

The Newcastle-London and London-Spain legs are going to fly regardless. Newcastle-Spain is additional flights, which is always going to be more significant than relative efficiency.

Hub-and-spoke has its place, where lots of people connect through a hub into a long-haul network where they're scattered to the four winds.

But where there is strong demand between a destination pair, then direct flights make more sense. Yields and loads on Newcastle-Spain flights are high, so if you diverted everyone through hub-and-spoke you'd need bigger planes or even duplicates on each leg.

 

[ModernRailways]

I think one of Easyjets biggest failings in Newcastle was being too reliant on package holidays. There was a few times I was going to fly with them as it was a direct flight, but they were asking for high prices (~£80 return to Berlin), instead I paid the same amount to fly BA changing in London and got my airmiles and tier points. Ryanair seem to have this figured out, even in winter/off-peak my Ryanair flights have been busy/full. Easyjet not so much, they have been on occasion busy but not full. A lot of their flight times were off too, on the Berlin route (if I am remembering rightly) they had one leaving Berlin at 6am, and then the next one was 5pm, but leaving Newcastle it was 12pm, and 4pm or around that. If the times worked people are likely to take day trips/weekend city breaks but the times never worked, in fact I don't think they had anything on Friday after 12pm, and then the first flight back was the Sunday at 6am then nothing till Tuesday.

They'll still likely operate from Newcastle, it's got a decent customer base if they can get it right, but keeping it as a hub in the current economy (Brexit) isn't worth it for their operations.

 

[route101]

I think one of Easyjets biggest failings in Newcastle was being too reliant on package holidays. There was a few times I was going to fly with them as it was a direct flight, but they were asking for high prices (~£80 return to Berlin), instead I paid the same amount to fly BA changing in London and got my airmiles and tier points. Ryanair seem to have this figured out, even in winter/off-peak my Ryanair flights have been busy/full. Easyjet not so much, they have been on occasion busy but not full. A lot of their flight times were off too, on the Berlin route (if I am remembering rightly) they had one leaving Berlin at 6am, and then the next one was 5pm, but leaving Newcastle it was 12pm, and 4pm or around that. If the times worked people are likely to take day trips/weekend city breaks but the times never worked, in fact I don't think they had anything on Friday after 12pm, and then the first flight back was the Sunday at 6am then nothing till Tuesday.

They'll still likely operate from Newcastle, it's got a decent customer base if they can get it right, but keeping it as a hub in the current economy (Brexit) isn't worth it for their operations.

£80 return to Berlin is a good price.

 

[Bald Rick]

£80 return to Berlin is a good price.

Very good! And surely much the better option than a dog leg and transfer at Heathrow which will add at least two hours each way to save a few quid.

 

[Crawley Ben]

Maybe I am being optimistic - or cynical depending on your viewpoint - but I do wonder whether some of the former Stansted & Southend route network will now come to Gatwick given the available capacity at LGW following BA's decision to consolidate their operations to Heathrow?

Surely if you are Easyjet, having operations at Luton and Gatwick (only) is advantageous to Luton, Gatwick, Stansted and Southend.

Edit - it appears WestCoast and myself were thinking along similar lines!

BA not quite moving all their flights out of Gatwick, the following long haul services resume from the airport later this month/August.

Bermuda - Twice weekly
Bridgetown (Barbados) - Twice weekly
Kingston (Jamaica) - Twice weekly
St. Lucia - Once weekly

LGW short haul flights will be moved to Heathrow until September 2020 as I understand it. Presume the situation will be reviewed again then?

Ben

 

[ModernRailways]

£80 return to Berlin is a good price.

The previous times I'd been, it was around £40 return. Flying BA was £74 return via LHR. The journey length being an extra 2 hours didn't bother me as the times were more convenient anyway and I got to use Tegel which I much prefer(erred), plus I got some miles for it. I didn't fancy leaving Berlin at 7am, and so instead I got to leave at 7pm, and was back in Newcastle at 11pm but that gave me another full day to do things.

 

[WestCoast]

The previous times I'd been, it was around £40 return. Flying BA was £74 return via LHR. The journey length being an extra 2 hours didn't bother me as the times were more convenient anyway and I got to use Tegel which I much prefer(erred), plus I got some miles for it. I didn't fancy leaving Berlin at 7am, and so instead I got to leave at 7pm, and was back in Newcastle at 11pm but that gave me another full day to do things.

£20 to fly from the UK to Berlin is incredibly low when you consider that £13 of that is tax alone, leaving £7 to cover your airfare (fuel, wages, aircraft lease costs) and airport fees. There's no way any airline is breaking even on that ticket.

 

[Jayden99]

Easyjet has a big market from Stansted to Scotland, particularly Edinburgh, much of which is East Anglia people, particularly Cambridge. There might be a light reduction in frequency but it’s inconceivable that they would stop this route, even with improved rail services to Edinburgh on the ECML from next year

The Stansted-Scotland routes are all Glasgow or Edinburgh crewed already anyway, many a Double Stanny shift in the afternoon.

 

[markydh]

The Newcastle - Berlin route hasn’t operated since April 2019, so that’s moot in any case!

 

[edwin_m]

£20 to fly from the UK to Berlin is incredibly low when you consider that £13 of that is tax alone, leaving £7 to cover your airfare (fuel, wages, aircraft lease costs) and airport fees. There's no way any airline is breaking even on that ticket.

Once they're committed to running the flight they will incur nearly all those costs whatever happens. As long as the £7 covers the marginal cost of fuel to carry the extra weight, they are breaking even. If the passenger opts for baggage or other "extras" then that's mostly profit. And by offering fares like that people perceive them as cheap even though most people don't get anything near that sort of figure.

 

[WestCoast]

Once they're committed to running the flight they will incur nearly all those costs whatever happens. As long as the £7 covers the marginal cost of fuel to carry the extra weight, they are breaking even. If the passenger opts for baggage or other "extras" then that's mostly profit. And by offering fares like that people perceive them as cheap even though most people don't get anything near that sort of figure.

Good point around the yield management and you're right the headlines fares get bums on seats, although as you say overall the average fare including extras that customers pay on the route has to be much higher. If they can't get people to pay the higher fares and buy the extras the route becomes unviable. In comparison to a network airline like BA, the low cost airlines start and end routes more readily because their business model is centred on making each route pay its way rather than BA where some short-haul routes are ran because they feed profitable long-haul routes (which may not be as profitable without the network).

easyJet's 2018 annual report suggests in that year they calculated an average cost of £57.26 per seat across all the routes they operate.

 

[BananaRepublic]

......I suspect a lot of industries will be using Covid as the excuse to consolidate their businesses ahead of Brexit. Airbus are looking at mass redundancies too. It is a shame they're hiding behind Covid because it protects the Brexitists from the political consequences of Brexitism, but hey......

“....Airbus are looking at mass redundancies too....”
Yes, mostly in Germany and France (reported to be 5,100 & 5,000 jobs lost respectively), as well as in 900 Spain and 1,300+ in the rest of the world.
The up to 1,700 Airbus jobs that are to be lost in the UK, fits in with the companies global downscaling of production.

q

 

[edwin_m]

“....Airbus are looking at mass redundancies too....”
Yes, mostly in Germany and France (reported to be 5,100 & 5,000 jobs lost respectively), as well as in 900 Spain and 1,300+ in the rest of the world.
The up to 1,700 Airbus jobs that are to be lost in the UK, fits in with the companies global downscaling of production.

In the UK Airbus is cutting 1700 out of about 13500 or around 12.6%.
Worldwide it is cutting 15000 out of 134000 or around 11.2%
So the proportion of the workforce to be cut is 12.5% greater in the UK than globally. The UK is being hit somewhat harder though not dramatically so.

It's unsurprising that the losses are approximately in proportion, because the UK makes the wings so the ratio of UK production to production elsewhere is fairly much fixed at two wings per plane. But in the longer term there's still the significant risk that Brexit will make the UK less competitive for companies like this that may end up paying duty on components that are moved around Europe for assembly elsewhere. If that happens then the next round of downsizing could be to move the wing production into the continuing EU.

Coronavirus: Plane-maker Airbus to cut 15,000 jobs

The aerospace firm blames coronavirus for the cuts, warning of 1,700 job losses at its UK plants.

www.bbc.co.uk

It will cut 1,700 jobs in the UK ... Some 134,000 people work for Airbus worldwide

Coronavirus: Plane-maker Airbus furloughs 3,200 staff

In a letter to workers Chief Executive Guillaume Faury said the firm's existence was now threatened.

www.bbc.co.uk

Airbus has around 13,500 workers in the UK

 

[Tetchytyke]

£20 to fly from the UK to Berlin is incredibly low when you consider that £13 of that is tax alone, leaving £7 to cover your airfare (fuel, wages, aircraft lease costs) and airport fees. There's no way any airline is breaking even on that ticket.

That's where hub-and-spoke can give good prices. The Newcastle-Heathrow and Heathrow-Berlin flights were running anyway, and for people paying a damn sight more, so the fare just has to cover the marginal fuel cost of flying another 100kg or so of person in a seat that would otherwise be empty. I found BA often undercut the train from Newcastle to London for that reason, except on the mid-afternoon flight which connected into the big wave of evening long-haul departures from Heathrow.

A direct flight has to wash it's face just on point to point.

The up to 1,700 Airbus jobs that are to be lost in the UK, fits in with the companies global downscaling of production.

I hadn't looked at the details, but that's interesting. Of course if Toulouse and Hamburg then have spare space in the factories where wing manufacture could be moved to, it subsequently could well weaken Hawarden's position.

 

[Bald Rick]

fare just has to cover the marginal fuel cost of flying another 100kg or so of person in a seat that would otherwise be empty

Not just the fuel cost, but the cost of selling the ticket, and the cost of processing the passenger at the terminal. Offset by an assumed revenue from the passenger for things they might buy on board.

 

[WestCoast]

That's where hub-and-spoke can give good prices. The Newcastle-Heathrow and Heathrow-Berlin flights were running anyway, and for people paying a damn sight more, so the fare just has to cover the marginal fuel cost of flying another 100kg or so of person in a seat that would otherwise be empty. I found BA often undercut the train from Newcastle to London for that reason, except on the mid-afternoon flight which connected into the big wave of evening long-haul departures from Heathrow.

A direct flight has to wash it's face just on point to point.

Indeed, I have also found BA offering low prices to fly via Heathrow to European destinations on routings out of Glasgow, often undercutting direct flights with the low cost airlines and lower also than KLM. From what I gather in the industry press, BA's most profitable routes are the transatlantic services to the US and Canada and given the current situation, you have to wonder if this will also impact their short haul flying in Europe in the medium term if Covid has an ongoing impact on transatlantic profits.

Personally, I'm also wondering if BA will eventually cut their Glasgow (& Edinburgh) to Gatwick service (it looks scheduled to resume in August) which I have been using a lot in the the past two years prior to Covid to access a work location near Brighton. It always seemed that most people on this route are just flying within the UK, in contrast to the Heathrow service. My employer insists on the lowest cost ticket, but I'd say roughly 80-90% of the time this has actually been BA and not easyJet. Given that I have the BA Silver status the seat choice and lounge have been great perks.

All rather academic, given that my travel will be cut long-term due to increased virtual colloboration on projects, as I'm sure many others will experience too.

 

[Tetchytyke]

Not just the fuel cost, but the cost of selling the ticket, and the cost of processing the passenger at the terminal.

On a hub-and-spoke those costs are largely there anyway. BA at Newcastle are there handling passengers connecting into big ticket long-haul, so a hand baggage only EuroTraveller passenger makes no odds really.

For direct flights, you're right, it's all extra cost to be factored in. Easyjet have to find 150 people all wanting to go from Newcastle to Berlin at the same time to make money on an £80 return, but BA don't because BA are utilising capacity that's already there. KLM/Air France prices from Newcastle to Europe via Amsterdam and/or Paris tend to be pretty competitive for the same reason.

 

[Bald Rick]

On a hub-and-spoke those costs are largely there anyway. BA at Newcastle are there handling passengers connecting into big ticket long-haul, so a hand baggage only EuroTraveller passenger makes no odds really.

There will be the per passenger handling fee that the airport charges the airline. Of course not all airports do this, and I don’t know if Newcastle do.

 

[Tetchytyke]

There will be the per passenger handling fee that the airport charges the airline.

Ah, I see what you mean. Yes, Newcastle does and it's about a tenner I believe.

 

[Bald Rick]

Ah, I see what you mean. Yes, Newcastle does and it's about a tenner I believe.

Well there you go - therefore any flight out of Newcastle that is less than £23 is automatically a loss for the airline.

 

[LNW-GW Joint]

In the UK Airbus is cutting 1700 out of about 13500 or around 12.6%.
Worldwide it is cutting 15000 out of 134000 or around 11.2%
So the proportion of the workforce to be cut is 12.5% greater in the UK than globally. The UK is being hit somewhat harder though not dramatically so.

It's unsurprising that the losses are approximately in proportion, because the UK makes the wings so the ratio of UK production to production elsewhere is fairly much fixed at two wings per plane. But in the longer term there's still the significant risk that Brexit will make the UK less competitive for companies like this that may end up paying duty on components that are moved around Europe for assembly elsewhere. If that happens then the next round of downsizing could be to move the wing production into the continuing EU.

1435 going at Broughton (of 6080), 295 at Filton (of 3200).

The overall 15000 Airbus numbers in the UK include defence and space businesses which are not affected.
This is just the civil aircraft production.
Broughton makes all the wings for the larger Airbus planes (the BBC piece gives the impression that it only does the A380, where the production line closed last year).
So it's about 25% of Broughton's staff.
Filton has relatively more working on development and testing, and far fewer on production.
(Belfast makes the wings for the A220 (the CS100 programme bought from Bombardier) but it's on a much smaller scale).
And to think just a few months ago Airbus had an order backlog of about a decade.

I don't think you can read too much into this from a Brexit point of view (there are even larger cutbacks in France and Germany), but the UK has to win the development and production of the next design of wing technology to stay alive long term.

 

[edwin_m]

1435 going at Broughton (of 6080), 295 at Filton (of 3200).

The overall 15000 Airbus numbers in the UK include defence and space businesses which are not affected.
This is just the civil aircraft production.
Broughton makes all the wings for the larger Airbus planes (the BBC piece gives the impression that it only does the A380, where the production line closed last year).
So it's about 25% of Broughton's staff.
Filton has relatively more working on development and testing, and far fewer on production.
(Belfast makes the wings for the A220 (the CS100 programme bought from Bombardier) but it's on a much smaller scale).
And to think just a few months ago Airbus had an order backlog of about a decade.

I don't think you can read too much into this from a Brexit point of view (there are even larger cutbacks in France and Germany), but the UK has to win the development and production of the next design of wing technology to stay alive long term.

Do you have numbers of employees for the civil aircraft business worldwide? That would be better to see if the UK is being hit disproportionately.

 

[LNW-GW Joint]

Do you have numbers of employees for the civil aircraft business worldwide? That would be better to see if the UK is being hit disproportionately.

Not sure of total numbers, but 5000 are going in France, 5100 in Germany, and 900 in Spain.
Another 900 are going in Germany at another Airbus unit.
The figure of 135 000 is bandied about for total Airbus employees, but that includes all the various lines of business

 

[TUC]

Not good news for the staff. Definitely good news for the environment; there's too much discretionary flying these days.

Discretionary flying? You don't mean people going away and enjoying thrmselves do you? How terrible!

 

[Bletchleyite]

Discretionary flying? You don't mean people going away and enjoying thrmselves do you? How terrible!

For the environment, yes. It'd be better if they did so by train or by well-filled car.

 

[Tetchytyke]

For the environment, yes. It'd be better if they did so by train or by well-filled car.

Given the ferry from Spain takes over four hours by itself, I'll not be rushing to drive to Ibiza next summer!

 

[Jamesrob637]

Given the ferry from Spain takes over four hours by itself, I'll not be rushing to drive to Ibiza next summer!

I don't think I'd sober up quickly enough after a week in Ibiza to drive anything motorised

 

[Tetchytyke]

I don't think I'd sober up quickly enough after a week in Ibiza to drive anything motorised

Pfft, I'm not made of money. Ten quid a bottle when I went to see David Guetta!

 

[Cloud Strife]

This looks especially bad for Southend Airport, where I think easyJet is far and away the largest operator. As others have said, it makes sense for them to consolidate to their other London airports, so it is likely they won't have much left at Southend. If Ryanair do something similar and move their flights to Stansted, then I could see Southend closing.

Southend will always find some use given how terrible the other London airports are, so I wouldn't worry about it closing. It may end up being a summer-only operation with only token services during winter, but it's hard to imagine Southend closing completely given that there are no issues with landing/departure slots there, and it still has a direct connection to London Liverpool Street.

 

[Bletchleyite]

Southend will always find some use given how terrible the other London airports are

Terrible? What's terrible about them? Stansted is in the middle of a field and Gatwick is a bit slow with luggage, but otherwise? Heathrow has been transformed with the Queen's Terminal and T5.