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Jim Mason
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 Posted: Sun Apr 25, 2004 8:08 pm Post subject: GLA to DXB Subsidy |
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Hi all
I was asked this at work today and couldn't answer to my embarrassment.
When Emirates say they have already made a profit on their GLA - DXB route
- is this inclusive of the subsidy or not?
If it is 'exclusive of' then you have to question public funds being made
available to attract them. If it is inclusive of then surely they have a
duty to disclose this?
Either way the fact that they required an incitement to fly from Scotland
appears to suggest complete failure on their market research dept.
Jim
--
Take out thebairns to reply off-list
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BLIMPS
Guest
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| Posted: Sun Apr 25, 2004 9:54 pm Post subject: Re: GLA to DXB Subsidy |
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"Jim Mason" <jim.mason (AT) thebairnsukonline (DOT) co.uk> wrote
| Quote: | Hi all
I was asked this at work today and couldn't answer to my embarrassment.
When Emirates say they have already made a profit on their GLA - DXB route
- is this inclusive of the subsidy or not?
If it is 'exclusive of' then you have to question public funds being made
available to attract them. If it is inclusive of then surely they have a
duty to disclose this?
Either way the fact that they required an incitement to fly from Scotland
appears to suggest complete failure on their market research dept.
|
Has any airline started a route from Scotland in the last say year and NOT
had a sniff of the subsidy? Did the BMI EDI-JER route warrant ANY subsidy?
BLIMPS
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Clive Braham
Guest
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| Posted: Sun Apr 25, 2004 10:15 pm Post subject: Re: GLA to DXB Subsidy |
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"Jim Mason" <jim.mason (AT) thebairnsukonline (DOT) co.uk> wrote
| Quote: | Hi all
I was asked this at work today and couldn't answer to my embarrassment.
When Emirates say they have already made a profit on their GLA - DXB route
- is this inclusive of the subsidy or not?
If it is 'exclusive of' then you have to question public funds being made
available to attract them. If it is inclusive of then surely they have a
duty to disclose this?
Either way the fact that they required an incitement to fly from Scotland
appears to suggest complete failure on their market research dept.
|
With every flight being full they will be making an operating profit. They
will be able to work out the operating costs involved for each flight and
the revenues created and this is what the bloke would have been talking
about. The intitial outlay for setting up the service will be in place for
the duration of their tenure so can't be costed on a week 1 basis. Costs
like hiring staff, leasing facilities, initial advertising, etc. The idea of
the fund is to help with start up costs which are fixed regardless of how
the route does. I don't believe the fund is to make routes viable which
otherwise would not be as that can't be any good in the long run. It's
simply to make Scotland more attractive by sharing the initial risk. And
it's working.
In the case of Emirates they would have set up in Scotland with or without
the SE's help but no business would look a gift horse in the face.
Clive
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Jim Mason
Guest
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| Posted: Sun Apr 25, 2004 10:28 pm Post subject: Re: GLA to DXB Subsidy |
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In article <c6hdaq$k4d$1 (AT) newsg1 (DOT) svr.pol.co.uk>,
[email]clive (AT) braham5 (DOT) freeserve.co.uk[/email] says...
| Quote: |
"Jim Mason" <jim.mason (AT) thebairnsukonline (DOT) co.uk> wrote in message
news:MPG.1af62b2bf8d4a87298972e (AT) news (DOT) freeserve.com...
Hi all
I was asked this at work today and couldn't answer to my embarrassment.
When Emirates say they have already made a profit on their GLA - DXB route
- is this inclusive of the subsidy or not?
If it is 'exclusive of' then you have to question public funds being made
available to attract them. If it is inclusive of then surely they have a
duty to disclose this?
Either way the fact that they required an incitement to fly from Scotland
appears to suggest complete failure on their market research dept.
With every flight being full they will be making an operating profit. They
will be able to work out the operating costs involved for each flight and
the revenues created and this is what the bloke would have been talking
about. The intitial outlay for setting up the service will be in place for
the duration of their tenure so can't be costed on a week 1 basis. Costs
like hiring staff, leasing facilities, initial advertising, etc. The idea of
the fund is to help with start up costs which are fixed regardless of how
the route does. I don't believe the fund is to make routes viable which
otherwise would not be as that can't be any good in the long run. It's
simply to make Scotland more attractive by sharing the initial risk. And
it's working.
|
I can't argue with the fact that it is working but how much can you
actually justify as `start-up` costs? Aren't we talking about in excess of
£1m?
| Quote: | In the case of Emirates they would have set up in Scotland with or without
the SE's help but no business would look a gift horse in the face.
|
Did Emirates show any inclination to fly fro Scotland `before` any likelood
of subsidy? Excuse my ignorance - I honestly don't know!
Jim
--
Take out thebairns to reply off-list
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Clive Braham
Guest
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| Posted: Mon Apr 26, 2004 9:03 am Post subject: Re: GLA to DXB Subsidy |
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"Jim Mason" <jim.mason (AT) thebairnsukonline (DOT) co.uk> wrote
| Quote: |
I can't argue with the fact that it is working but how much can you
actually justify as `start-up` costs? Aren't we talking about in excess of
£1m?
|
Don't know the outlay figure but the rewards to the economy are set to be
many times that.
| Quote: |
In the case of Emirates they would have set up in Scotland with or
without
the SE's help but no business would look a gift horse in the face.
Did Emirates show any inclination to fly fro Scotland `before` any
likelood
of subsidy? Excuse my ignorance - I honestly don't know!
Jim
--
Yes it was on the cards for over 2 years. |
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Jim Mason
Guest
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| Posted: Mon Apr 26, 2004 9:10 am Post subject: Re: GLA to DXB Subsidy |
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In article <c6ij9t$g82$1 (AT) newsg2 (DOT) svr.pol.co.uk>,
[email]clive (AT) braham5 (DOT) freeserve.co.uk[/email] says...
| Quote: |
"Jim Mason" <jim.mason (AT) thebairnsukonline (DOT) co.uk> wrote in message
news:MPG.1af64bfc7f94b23798973a (AT) news (DOT) freeserve.com...
I can't argue with the fact that it is working but how much can you
actually justify as `start-up` costs? Aren't we talking about in excess of
£1m?
Don't know the outlay figure but the rewards to the economy are set to be
many times that.
In the case of Emirates they would have set up in Scotland with or
without
the SE's help but no business would look a gift horse in the face.
Did Emirates show any inclination to fly fro Scotland `before` any
likelood
of subsidy? Excuse my ignorance - I honestly don't know!
Jim
--
Yes it was on the cards for over 2 years.
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Thanks for that Clive. I can go to work this afternoon `fully armed`!
Jim
--
Take out thebairns to reply off-list
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Doug Maclean
Guest
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| Posted: Mon Apr 26, 2004 11:30 am Post subject: Re: GLA to DXB Subsidy |
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"Jim Mason" <jim.mason (AT) thebairnsukonline (DOT) co.uk> wrote
| Quote: | Hi all
I was asked this at work today and couldn't answer to my embarrassment.
When Emirates say they have already made a profit on their GLA - DXB route
- is this inclusive of the subsidy or not?
|
The "subsidy"is not paid directly to the airline. It is paid to the airport
company who can then discount landing or other fees for a period. That way
if an airline fails or stops the service no public money is lost. More than
likely Emirates are making an operating profit on the flights. The rest of
the costs will no doubt be covered in time.
| Quote: | If it is 'exclusive of' then you have to question public funds being made
available to attract them. If it is inclusive of then surely they have a
duty to disclose this?
The Executive will not disclose what they pay as it is commercial in |
confidence. It actually makes sense because each airline doesa not know
what any other airline gets for possiblu similar routes. The total for all
the routes is disclosed. I think it is currently around 6.2 million over
the mext three years.
| Quote: | Either way the fact that they required an incitement to fly from Scotland
appears to suggest complete failure on their market research dept.
Not at all. They are proving their market research is correct by starting |
the service. The start date and starting costs will all have been factored
including the temporary public subsidy.
Doug
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Fraser
Guest
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| Posted: Mon Apr 26, 2004 4:29 pm Post subject: Re: GLA to DXB Subsidy |
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"BLIMPS" <BLIMPS (AT) btopenworld (DOT) com> wrote
| Quote: | Has any airline started a route from Scotland in the last say year and NOT
had a sniff of the subsidy? Did the BMI EDI-JER route warrant ANY subsidy?
|
I hope not because 4 days out of 7 it seems to be cancelled.
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John Reid
Guest
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| Posted: Mon Apr 26, 2004 4:56 pm Post subject: Re: GLA to DXB Subsidy |
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Fraser wrote :
| Quote: |
"BLIMPS" <BLIMPS (AT) btopenworld (DOT) com> wrote in message
news:c6hc2n$9ck$1 (AT) hercules (DOT) btinternet.com...
Has any airline started a route from Scotland in the last say year and NOT
had a sniff of the subsidy? Did the BMI EDI-JER route warrant ANY subsidy?
I hope not because 4 days out of 7 it seems to be cancelled.
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I know the Glasgow service was always "seasonal", is it not the same for
EDI. In the winter it was always change at NEMA.
--
John
Mail sent to the reply address will be binned automatically.
Use my name with the domain (@+the rest)
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