State may try to recoup repatriation costs from Cobalt, ex employees slam government (Update)

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Paphos Life
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State may try to recoup repatriation costs from Cobalt, ex employees slam government (Update)

Post by Paphos Life »

Transport Minister Vasiliki Anastasiadou did not rule out suing Cobalt Air to recover the cost of repatriating stranded passengers following the airline???s grounding and assured that the gap it left behind would probably be covered by other airlines by next summer....

Read the article and chat about it below...
Mike J
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Re: State may try to recoup repatriation costs from Cobalt, ex employees slam government (Update)

Post by Mike J »

Interestingly Cobalt " inherited " 2 slot pairs at London Heathrow from Cyprus Airways when they started operations hence their flying them as Cyprus Airways exercising their ( ( Cyprus airways ) grandfather rights to the slots .
Scandinavian Airlines sold 2 pairs of slots at Heathrow last year for US$75 Million so one would assume both the Cyprus government,the ex-Cobalt employees and others owed money will be interested in what happens to those slots !
There have been reports of the Chinese investors sensing that they were merely pouring money into a bottomless pit as the reason why they pulled out. An incredibly rough way of assessing how Cobalt were performing would be staff employed to aircraft numbers. According to reports Cobalt employed 280 staff to fly 6 aircraft so 46 staff per aircraft though many reports are sceptical as to that staff figure given the number of ex Cyprus Airways staff associated with it.
Looking at their low cost carrier competitors Easyjet employ 37 per aircraft flown and Ryanair a miserly 29 per aircraft.The real measure is staff costs and given the strikes Ryanair and to some extent Easyjet have experienced we can assume their payroll cost is tightly controlled whereas there were eye-watering reports of Cyprus Airways salaries after their demise and many of those employees moved over to Cobalt ! The trouble I personally think was that Cobalt never really decided what they were. They said low cost but then took seats out and put in a business class something Easyjet and Ryanair or indeed Wizz would never dream off, indeed they are continually trying hard to put more seats in their aircraft ! Cobalt also utilised those Heathrow slots which given the costs of operating into and out of LHR no Low Cost Carrier would ever do .So they were either one thing nor the other whereas all their competition had sound business models.
As an FYI their are 441 employees per aircraft at State run PIA ! BA is at 115 if your interested hence the cost cutting continually going on there.
Mike J
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Re: State may try to recoup repatriation costs from Cobalt, ex employees slam government (Update)

Post by Mike J »

I did say it is certainly not an exact science, far from it but in a start up staff costs must be kept to a minimum .
I had some involvement with Easyjet in it's infancy and we had leased in three aircraft on what is known as a wet lease arrangement where the lessor supplied both the flight and cabin crew as well as rostering etc at a set fee . Stelios and his senior management worked for no money just some shares for the first year and every penny spent was closely evaluated . Margins are amazingly thin in the airline world ! I declined the CEO role as Stelios asked me to take no money for the first year and with mortgage , school fees etc I couldn't do it
Ray Webster who took the job after me worked for two years without pay using his pay off from Air New Zealand . Once the airline was more secure it took it's own leases and recruited pilots and cabin crew who had to buy their own uniforms were not paid on their training courses and only received pay when flying unlike legacy airlines.
It is a popular fallacy that airlines make their money in Business and First Class. First class is always a loss leader and Business class at last minute fares makes a contribution but economy is where you make you money with the now extremely efficient revenue management systems deciding daily pricing.
Unlike your business when an aeroplane takes off that's it and good airlines now calculate profitability per flight rather than by route to make sure they are maximising profit.
jeba
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Re: State may try to recoup repatriation costs from Cobalt, ex employees slam government (Update)

Post by jeba »

Mike J wrote: Sat Oct 20, 2018 5:34 pm Margins are amazingly thin in the airline world !
That really seems to be the case. I just booked a flight with Cyyprusairways from Stuttgart to Cyprus and the actual fare was € 6.-. All the rest were taxes and fees.
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