Jetmagic - Operations ceased!
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EMB135 vs EMB145
MarkD,
Surely the operating costs of both Embs are very similar, and given the 145 has 11 more seats, Jetmagic would have prefered filling those rather than a fleet of 135s.
The 135s were obviously essential for the LCY route, but without knowing much more than the population figures for ORK it must have been difficult to get serious load factors on thin routes with the 145s.
However if you do your marketing correctly, and understand that you have traffic waiting for you then its a different matter. From what I read it took them 2 years to get their business plan written, so surely in that time they could have done some decent work and gathered enough data to ensure bums on seats.
I believe they (or someone else) should look elsewhere in the UK to take their operating model, and they will probably make a real success from it.
HS
Surely the operating costs of both Embs are very similar, and given the 145 has 11 more seats, Jetmagic would have prefered filling those rather than a fleet of 135s.
The 135s were obviously essential for the LCY route, but without knowing much more than the population figures for ORK it must have been difficult to get serious load factors on thin routes with the 145s.
However if you do your marketing correctly, and understand that you have traffic waiting for you then its a different matter. From what I read it took them 2 years to get their business plan written, so surely in that time they could have done some decent work and gathered enough data to ensure bums on seats.
I believe they (or someone else) should look elsewhere in the UK to take their operating model, and they will probably make a real success from it.
HS
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Jetmagic's leisure routes worked. Nantes, Nice, Barcelona, Alicante, Rome, Milan worked well with fine loads last summer and even through the winter the loads, I am sure, were well within Jetmagic's business plan.
The dismal failure of two Brussels flights, London City, Liverpool and a badly timed Paris did the damage and not having a summer schedule for 2004 ready before Christmas last did not help too.
The dismal failure of two Brussels flights, London City, Liverpool and a badly timed Paris did the damage and not having a summer schedule for 2004 ready before Christmas last did not help too.
Last edited by Tom the Tenor; 3rd Feb 2004 at 15:56.
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I think they made several mistakes, the initial AOC debacle, having to wet lease aircraft whilst the embraers were grounded, the delay in the 135 certification to LCY, under financing of the company. It seemed overstaffed, 37 pilots for 3 aircraft. Their passenger numbers in their unsuccessful routes were growing slowly. If only GX could have lasted the winter.... What startup airline expects to make profits in their first year?
The best hope for Cork is for RE to grow its base there. It will be interesting to see if EI add any more routes ex Cork now that one of their competitors is gone.
The best hope for Cork is for RE to grow its base there. It will be interesting to see if EI add any more routes ex Cork now that one of their competitors is gone.
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Red Four:
When I go to www.jetmagic.com I get a rather stark "Jetmagic suspends operations" statement, which seems like enough warning. (Admittedly the other day it was still possible to get to the "original" pages if you knew the addresses or if you searched via google, but anyone browsing casually would find the home page statement first.)
When I go to www.jetmagic.com I get a rather stark "Jetmagic suspends operations" statement, which seems like enough warning. (Admittedly the other day it was still possible to get to the "original" pages if you knew the addresses or if you searched via google, but anyone browsing casually would find the home page statement first.)
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Was up at EICK yesterday for a little while. Sad to see the Jetmagic sales and office area so abandoned and left as it is now as a shrine to failure. I wish the geniuses that run the place, Aer Rianta, would now clear the site. Even putting the Christy Ring statue back in place would do for a start.
Also, it is likely that at least another generation or more will pass before we will ever see a new start-up at Cork again. Maybe never?
Also, it is likely that at least another generation or more will pass before we will ever see a new start-up at Cork again. Maybe never?
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Is a pity...guess the guys at Cork were faster at seizing the aircraft. Might not see it as detrimental to their brand retaining the remnants of a failed airline based on their patch. Makes one think...
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Cyrano 
thanks, I hadn't noticed that; as I guess like a lot of folk, I had the particular web-page I was interested in 'favourites' , and it still takes you right there.
4
thanks, I hadn't noticed that; as I guess like a lot of folk, I had the particular web-page I was interested in 'favourites' , and it still takes you right there.
4
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Some hope still for Jetmagic
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with Aer Arann jumping in on the ORK-BHD route, BmiBaby starting a new London Route, Aer lingus starting Barcelona, Milan etc., 37 pilots and no plane, €3.5 million of Debt and Cork consumer confidence gone, it will take a gutsy investor to put his cash into this. Also the return on investment will only happen if this company makes profit- there will be no buy-outs like FR-Buzz, Easy-Go as the airline has no valuable slots/brand.
Maybe they would be better off starting a new airline in Shannon or Derry.
Maybe they would be better off starting a new airline in Shannon or Derry.
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There is a lot of interest in the Cork Business community on a rescue at this late stage or even another startup. Shannon already has Skynet and EUJet based there. As for Derry, I heard rumours about Ryanair starting a base. We'll have to wait and see.
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CCR, EUJet's base in Shannon doesn't provide it with any scheduled traffic.
Ireland has 3 main cities, served by DUB, ORK and Belfast(x2)- these have been proven to be dominated by low fares players for the last 5 years, excluding newer entries to low fares arena like Aer Lingus and Aer Arann, well over 70% of the scheduled traffic from the 3 main cities is low fares, travellers are used to the extemely low fares offered by these airlines.
JetMagic was trying to be everything that Ryanair isn't, were Cork people willing to pay for this?- the short answer is no.
For every 300 passengers that fly ORK-STN every day, there was only 15 willing to pay a premium to go to London City with jetMagic.
Cork doesn't have that many City-Slickers looking to go to the square mile in London, in any case Aer lingus to Heathrow is just as cheap and convenient to London City.
I wish jetMagic the best of luck, but where I think their business plan went wrong, is that they were afraid to get a big plane and stack the customers high and cheap, as they were afraid of the bold Mr. O'Leary coming in and spanking their bare bottoms, the opening for these were Alicante/Malaga/Belfast; these are all now gone.
And as for Mr. O'leary- his pig headedness and moratoreum on new routes ex-Ireland until Aer Rianta go on a fact-finding mission to Charleroi (to see how real airports are run) has opened the door to Aer Lingus, HLX, Germanwings & Basiq Air in Dublin; and Aer Lingus in Cork (the same door that was open in Cork for Jetmagic).
It remains to be seen if all the Corkonian business men will dip their hands in their pockets to bail out "Air Examiner"
Ireland has 3 main cities, served by DUB, ORK and Belfast(x2)- these have been proven to be dominated by low fares players for the last 5 years, excluding newer entries to low fares arena like Aer Lingus and Aer Arann, well over 70% of the scheduled traffic from the 3 main cities is low fares, travellers are used to the extemely low fares offered by these airlines.
JetMagic was trying to be everything that Ryanair isn't, were Cork people willing to pay for this?- the short answer is no.
For every 300 passengers that fly ORK-STN every day, there was only 15 willing to pay a premium to go to London City with jetMagic.
Cork doesn't have that many City-Slickers looking to go to the square mile in London, in any case Aer lingus to Heathrow is just as cheap and convenient to London City.
I wish jetMagic the best of luck, but where I think their business plan went wrong, is that they were afraid to get a big plane and stack the customers high and cheap, as they were afraid of the bold Mr. O'Leary coming in and spanking their bare bottoms, the opening for these were Alicante/Malaga/Belfast; these are all now gone.
And as for Mr. O'leary- his pig headedness and moratoreum on new routes ex-Ireland until Aer Rianta go on a fact-finding mission to Charleroi (to see how real airports are run) has opened the door to Aer Lingus, HLX, Germanwings & Basiq Air in Dublin; and Aer Lingus in Cork (the same door that was open in Cork for Jetmagic).
It remains to be seen if all the Corkonian business men will dip their hands in their pockets to bail out "Air Examiner"
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Whilst Cork's Merchant Princes decided to say a big 'No' to Jetmagic it must again be stated that quite a lot of the plain people of Cork did try and liked what was on offer at GX. The good loads on the leisure routes is testimony to that.
I cannot help being just a little suspicious about the crocadile tears now being supposedly shed by the chamber of commerce types. Feeling just a little guilty, are we, boys?
I cannot help being just a little suspicious about the crocadile tears now being supposedly shed by the chamber of commerce types. Feeling just a little guilty, are we, boys?
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Tom,
You can't expect business people to support something if it is not delivering what they want, nor can you expect a business model to succeed if it is very fundamentally flawed. Business people will look for convenience and cost ahead of loyalty to a local business. If LHR offers more choice of service or if, like the majority of passengers to London, they need to visit somewhere other than the East side of the city or catch a long haul connection, then LCY would be a second choice. Gatwick was a huge opportunity overlooked by JetMagic. Bmi Baby have now closed that gap.
It would be interesting to see on what basis Jet Magic thought there was a market for a double daily Brussels service, or indeed a double daily Liverpool or Edinburgh, the latter putting a double daily Embraer (needing good financial returns) up against Arran's nosier. longer but relatively low fare ATR. Did Arran collapse - no. Also, whilst they were well known in Ireland, how did they sell from the other end of the route? I'm sure they would not spend big bucks in Italy for a three per week service to Cork (eh, wheresa dat?). The final admission of getting it wrong was their acceptance that you cannot sell everything yourself and decision to finally sell on travel agency systems and pay commission.
If Jet Magic moved away from the "sexy sleek new jet into City" idea and had started with a few cheap MD80's or Fokker 100's, they may have succeeded. Whilst there was definite demand for their leisure routes, the economics of using Embraers with relatively low fares just didn't make sense. Medium sized jets, Gatwick instead of City and a low fares (not cheap and cheerful, but economic low fares) approach may well have worked.
Maybe nobody wanted to tell the emperor about his new clothes?
You can't expect business people to support something if it is not delivering what they want, nor can you expect a business model to succeed if it is very fundamentally flawed. Business people will look for convenience and cost ahead of loyalty to a local business. If LHR offers more choice of service or if, like the majority of passengers to London, they need to visit somewhere other than the East side of the city or catch a long haul connection, then LCY would be a second choice. Gatwick was a huge opportunity overlooked by JetMagic. Bmi Baby have now closed that gap.
It would be interesting to see on what basis Jet Magic thought there was a market for a double daily Brussels service, or indeed a double daily Liverpool or Edinburgh, the latter putting a double daily Embraer (needing good financial returns) up against Arran's nosier. longer but relatively low fare ATR. Did Arran collapse - no. Also, whilst they were well known in Ireland, how did they sell from the other end of the route? I'm sure they would not spend big bucks in Italy for a three per week service to Cork (eh, wheresa dat?). The final admission of getting it wrong was their acceptance that you cannot sell everything yourself and decision to finally sell on travel agency systems and pay commission.
If Jet Magic moved away from the "sexy sleek new jet into City" idea and had started with a few cheap MD80's or Fokker 100's, they may have succeeded. Whilst there was definite demand for their leisure routes, the economics of using Embraers with relatively low fares just didn't make sense. Medium sized jets, Gatwick instead of City and a low fares (not cheap and cheerful, but economic low fares) approach may well have worked.
Maybe nobody wanted to tell the emperor about his new clothes?
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Eh hello-
I agree with all your points.
Especially paying travel agents a commision of €1 per sector.
The average booking in Ireland is a return flight for 1.2 people, so Jetmagic was paying travel agents €2.40 on average per booking-the travel agents in Cork are charging booking fees per head of between €15 and €25 anyway, so none of them were turned on by this commision (that cost more to administer than what it was worth to either party), the customer will always have dictated what price/aiport they want anyway; so if an agent can sell them an Aer Lingus Fare to Heathrow cheaper, the chance of the agent being bothered to convince a customer to go with a higher fare to LCY with jetmagic for the extra revenue of a price of a cup of coffee is zero.
Also their website didn't work half the time.
I agree with all your points.
Especially paying travel agents a commision of €1 per sector.
The average booking in Ireland is a return flight for 1.2 people, so Jetmagic was paying travel agents €2.40 on average per booking-the travel agents in Cork are charging booking fees per head of between €15 and €25 anyway, so none of them were turned on by this commision (that cost more to administer than what it was worth to either party), the customer will always have dictated what price/aiport they want anyway; so if an agent can sell them an Aer Lingus Fare to Heathrow cheaper, the chance of the agent being bothered to convince a customer to go with a higher fare to LCY with jetmagic for the extra revenue of a price of a cup of coffee is zero.
Also their website didn't work half the time.
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Tom...without being rude, if you go back to the early days of this thread, if you listen to the post mortems on Jet Magic, the simple facts are it was the wrong aircraft, in the wrong place. Aer Rianta airports equal low cost and therfore low yield. The market is used to it and will not support an operation like Jet Magic. A bigger aircraft may have worked. The product was flawed from day one. Sadly, it's over...time to move on
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Got to disagree with the 'wrong aircraft' point to a certain degree. I appreciate this was the case with LCY as the EMB was not certified to fly into LCY at the start of operations, therefore a bit more forward planning could have been done on this aspect.
But I think the EMB for Cork wasn't a bad choice, starting a new airline especially out of Cork, one of the first to be based solely out of Cork, was a challenge but. Firstly the aircraft was a jet which is a plus, at the end of the day, they could have picked the ATR42/72 which has similar capacity, but went for the jet instead, which I think was a good idea. But I don't subscribe to the point that a larger aircraft should have been used.
The EMB 135/145 is easier to fill than a B737 say circa 150 seats. At the end of the day it comes down to the load factor, if you can get the 50 seats filled on the 145, well then 100%LF, and that's got to make money, but on the other hand if you use a B737 and fill say 50 seats of 150 avail, that's a LF of 33%, and that doesn’t make money.
Where JM went wrong was not solely down to aircraft choice it was simply they started too big. With a huge route structure, all over Europe. The should have opened tops 4 routes, 2/3 to the UK and 1/2 to continental Europe. Tops. Get a foothold on those routes, and be recognised as the main carrier on them, build up a good image on them, punctuality etc. Reassess the situation, and then worry about expansion onto further routes.
City was a bad idea from the start as the aircraft wasn't certified to fly into LCY. City gives off this 'groovy' place to fly into, mainly for business travellers, but at the end of the day, if the suits weren’t going to fill the seats, Gatwick was the better destination, at least there are far more connecting flights especially for the 'bucket & spade brigade' who would have filled more seats. And not forgetting the business travellers, there's always the Gatwick express to get you into London in 30 mins. Sure isn't that the time you spend over LHR in the hold these days?!
The idea of an airline based out of Cork, wasn't a bad idea, it could, and should have worked, but it was executed badly with some over ambitious plans. Now with Aer Arann taking a few routes from Cork, BMI baby on the scene, Jet Magic maybe at this stage is a lost cause.
Irishrover
But I think the EMB for Cork wasn't a bad choice, starting a new airline especially out of Cork, one of the first to be based solely out of Cork, was a challenge but. Firstly the aircraft was a jet which is a plus, at the end of the day, they could have picked the ATR42/72 which has similar capacity, but went for the jet instead, which I think was a good idea. But I don't subscribe to the point that a larger aircraft should have been used.
The EMB 135/145 is easier to fill than a B737 say circa 150 seats. At the end of the day it comes down to the load factor, if you can get the 50 seats filled on the 145, well then 100%LF, and that's got to make money, but on the other hand if you use a B737 and fill say 50 seats of 150 avail, that's a LF of 33%, and that doesn’t make money.
Where JM went wrong was not solely down to aircraft choice it was simply they started too big. With a huge route structure, all over Europe. The should have opened tops 4 routes, 2/3 to the UK and 1/2 to continental Europe. Tops. Get a foothold on those routes, and be recognised as the main carrier on them, build up a good image on them, punctuality etc. Reassess the situation, and then worry about expansion onto further routes.
City was a bad idea from the start as the aircraft wasn't certified to fly into LCY. City gives off this 'groovy' place to fly into, mainly for business travellers, but at the end of the day, if the suits weren’t going to fill the seats, Gatwick was the better destination, at least there are far more connecting flights especially for the 'bucket & spade brigade' who would have filled more seats. And not forgetting the business travellers, there's always the Gatwick express to get you into London in 30 mins. Sure isn't that the time you spend over LHR in the hold these days?!
The idea of an airline based out of Cork, wasn't a bad idea, it could, and should have worked, but it was executed badly with some over ambitious plans. Now with Aer Arann taking a few routes from Cork, BMI baby on the scene, Jet Magic maybe at this stage is a lost cause.
Irishrover
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Irishrover, you say:
"The EMB 135/145 is easier to fill than a B737 say circa 150 seats. At the end of the day it comes down to the load factor, if you can get the 50 seats filled on the 145, well then 100%LF, and that's got to make money, but on the other hand if you use a B737 and fill say 50 seats of 150 avail, that's a LF of 33%, and that doesn’t make money. "
Load factor alone isn't everything - the key is what is your break even load factor based on "realistic" fares and then what load factor do you achieve and at what fare levels.
The 737 may have a higher breakeven level than an ERJ in pure passenger number terms - that's just a measure of the difference in costs, but I would argue that a 737 offers the ability to have a mix of fare levels - to stimulate demand with cheap fares and then late availability higher fares to make money. It seems with JM that they started with low fares to stimulate the market, but were unable to get the higher yields from the business passengers. Wasn't the load factor on Brussels something like 33%? Don't know what it was on LCY, but even with only 37 seats the ERJ 135 needs a number of regular business-paying passengers to make money - it sounds like they weren't coming forward to fly on JM.
It's not easy setting up an airline and even more difficult to make money out of it, and yet investors seem to be willing to part with their money in the pursuit of a dream.
"The EMB 135/145 is easier to fill than a B737 say circa 150 seats. At the end of the day it comes down to the load factor, if you can get the 50 seats filled on the 145, well then 100%LF, and that's got to make money, but on the other hand if you use a B737 and fill say 50 seats of 150 avail, that's a LF of 33%, and that doesn’t make money. "
Load factor alone isn't everything - the key is what is your break even load factor based on "realistic" fares and then what load factor do you achieve and at what fare levels.
The 737 may have a higher breakeven level than an ERJ in pure passenger number terms - that's just a measure of the difference in costs, but I would argue that a 737 offers the ability to have a mix of fare levels - to stimulate demand with cheap fares and then late availability higher fares to make money. It seems with JM that they started with low fares to stimulate the market, but were unable to get the higher yields from the business passengers. Wasn't the load factor on Brussels something like 33%? Don't know what it was on LCY, but even with only 37 seats the ERJ 135 needs a number of regular business-paying passengers to make money - it sounds like they weren't coming forward to fly on JM.
It's not easy setting up an airline and even more difficult to make money out of it, and yet investors seem to be willing to part with their money in the pursuit of a dream.