Quote: Eos Airlines, the premium New York to London carrier known for its operational excellence and uncrowded Guest experience, announced today that it has agreed to a term sheet outlining the terms on which Eos will secure an additional $50 million in capital from a current investor.
Beaucaire From Syria, joined Sep 2003, 5051 posts, RR: 23 Reply 2, posted (8 months 3 weeks 2 days 4 hours ago) and read 1948 times:
How much money have EOS burnt so far since their creation ?
it would be interesting to compare their case with "L'avion" in Paris,who operate currently a single 757 between Orly and New York and have so far burnt about 30 M € (that's for one plane and one year operation )
Beaucaire From Syria, joined Sep 2003, 5051 posts, RR: 23 Reply 4, posted (8 months 3 weeks 2 days 4 hours ago) and read 1919 times:
and did EOS start with 4 planes or were they gradually added ? ( L'avion wants to operate a second 757 leased from Condor ,but on some French forums one can read comments about their financial instability )
TOLtommy From United States, joined Dec 2003, 2266 posts, RR: 3 Reply 5, posted (8 months 3 weeks 2 days 4 hours ago) and read 1895 times:
They launched with 3 planes. I believe this latest infusion of capital will bring the total to closer to $200m burned so far. Somebody must believe in the model, but it's going to get a lot harder once Open Skies launches....
LAXintl From United States, joined May 2000, 9597 posts, RR: 12 Reply 6, posted (8 months 3 weeks 2 days 4 hours ago) and read 1868 times:
I just looked up their financing a bit -- they had $187 million in equity capital plus financing for start up. They received additional $50mil in equity in August 2007, so presumably they have burned through $200m+ since launch till todays $50mil additional money.
Bottom line is these business models as nice as they might be simply do not work, and its nuts to think about the number of folks willing to continue pouring money into the operation.
From Eos press release its interesting to note they now predict profitability in 2009, previously they had said they were on track for that by this summer --- suppose say anything to continue baiting these investors.
From the desert to the sea, to all of Southern California
Beaucaire From Syria, joined Sep 2003, 5051 posts, RR: 23 Reply 7, posted (8 months 3 weeks 2 days 4 hours ago) and read 1868 times:
Compared to the share-value of some airlines with many more aircraft ,those amounts seem absolutely mind-buggling.
Austrian Airline ,for instance,has a share-value of about 380 M €...
How many passengers must EOS fly to pay back that amount of initial investments with an average revenue of maybe 2000 $ /passenger ??? To me the model stinks !
Atrude777 From United States, joined Aug 2003, 3584 posts, RR: 43 Reply 8, posted (8 months 3 weeks 2 days 3 hours ago) and read 1791 times:
Quoting LAXintl (Reply 1): They were on the verge of pulling the plug and shutting down -- I guess this keeps them going for a few more months.
Where is your source stating that EOS was about to shut down? I find that a bit hard to believe.
Quoting LAXintl (Reply 6): --- suppose say anything to continue baiting these investors.
Investors are not stupid, and would not listen to EOS alone by investing in the company. They do their own research and decide for themselves if it is worth the investment. Also notice it is an investment, not a loan which speaks pretty well for EOS.
Reminding again they are, and have continued to be FLIGHT level profitable since 8 months after their start date, which I know doesn't mean company wise but is a good start for the company nevertheless.
Quoting Beaucaire (Reply 7): How many passengers must EOS fly to pay back that amount of initial investments with an average revenue of maybe 2000 $ /passenger ??? To me the model stinks !
If I understand your question right, they would have to fly about 26 passengers at the LOWEST fare out of the 48 seats and still be flight level profitable, and we know any good company would not sell 28 seats at the lowest fare.
Alex
[Edited 2008-04-19 10:23:35]
Good things come to those who wait, better things come to those who go AFTER it!
AA1818 From Trinidad And Tobago, joined Feb 2006, 2199 posts, RR: 3 Reply 11, posted (8 months 3 weeks 2 days 3 hours ago) and read 1739 times:
I didn't realize that EOS was in any financial difficulty. I'm not suprised, but I thought they were not in any grave danger a la SilverrJet and the late MaxJet.
I doubt senior leadership would ever comment on something like that.
We have a winner!
Quoting Atrude777 (Reply 8):
If I understand your question right, they would have to fly about 26 passengers at the LOWEST fare out of the 48 seats and still be flight level profitable, and we know any good company would not sell 28 seats at the lowest fare.
Assuming Alex's info is correct, that could be a feasible business plan, considering they would raise prices before 28 seats are booked at that fare. That'd be like Skybus selling out the cabin at all 10$ fares...(fine, maybe not that serious )
However, I DO think that the luxury market from NYC to LON randomly spurred up, and is now oversaturated as a result. If it were one airline operating the route, i feel it would be quite the successful business model.
Lightsaber From United States, joined Jan 2005, 3926 posts, RR: 71 Reply 13, posted (8 months 3 weeks 2 days 2 hours ago) and read 1673 times:
Quoting Beaucaire (Reply 2): it would be interesting to compare their case with "L'avion" in Paris,who operate currently a single 757 between Orly and New York and have so far burnt about 30 M € (that's for one plane and one year operation )
It would be interesting to compare the burn rates. I am a fan of the all business class concept. More so with the 757 than the 767. Now put out a GTF powered A321 and... But I dream and digress...
Quoting LAXintl (Reply 6): Bottom line is these business models as nice as they might be simply do not work, and its nuts to think about the number of folks willing to continue pouring money into the operation.
I think the current route structure doesn't work. For example, long term, EOS needs some domestic feed. Not much... and only the most premium. Say ORD, SFO, and LAX. Personally, BA going into LCY with A318's is the biggest hit against these all business class airlines. How do you compete against what is arguably the most convenient airport in London for servicing the London O&D market?
As to L'Avion... they simply do not have enough 'economy of scale' to generate much interest. An airline cannot have one route! People get bored of it too quickly. For example, I cannot find their seating chart on Seatguru. Wait a second... nor can I find EOS or silverjet! MAXjet was on there, but now just has the Chapter 11 notice. So maybe that isn't a great indicator.
Quoting ShannoninAMA (Reply 12):
However, I DO think that the luxury market from NYC to LON randomly spurred up, and is now oversaturated as a result. If it were one airline operating the route, i feel it would be quite the successful business model.
But as of now, there are three (EOS, Silverjet, and now BA's A318's).
Beaucaire From Syria, joined Sep 2003, 5051 posts, RR: 23 Reply 14, posted (8 months 3 weeks 2 days 1 hour ago) and read 1599 times:
Quoting Lightsaber (Reply 13): As to L'Avion... they simply do not have enough 'economy of scale' to generate much interest. An airline cannot have one route! People get bored of it too quickly. For example, I cannot find their seating chart on Seatguru. Wait a second... nor can I find EOS or silverjet! MAXjet was on there, but now just has the Chapter 11 notice. Sad So maybe that isn't a great indicator.
Agree with your statement !
The man behind "L'avion " is Marc Rochet -the former CEO and previous owner of a couple of failed airlines including AOM ,Air Liberté and Euralair. He has always been very close to Chirac and other political circles in France.
To me a one-plane-one destination concept can't work .As you rightfully mention,specially Paris to New York without feeder concept is like running against a brick-wall.You have less local originating traffic than say from London to New York,also considering the heavy Air France/Delta/United/Continental competition on thet segment.
XJETFlyer From United States, joined Apr 2007, 265 posts, RR: 0 Reply 15, posted (8 months 3 weeks 2 days 1 hour ago) and read 1586 times:
I thought the whole idea of these type of airlines was more comfort at a higher price than regular class, but much cheaper than first class. You would think it would work. I guess no airline works as a finance partner has told me. They are always losing money.
Indeed. Why waste time and go through the hassle of booking one airline (L'avion) just to book to another if you plan on going anywhere else? The only market this airline can appeal to at all is the nonstop NYC-Paris market. Want to fly IAD-Paris but still want to try out L'avion? Then have fun flying UA to IAD! Honestly, most travelers will bypass L'avion and just book say UA Business class instead to go to IAD. Which the same can really be said for NYC-LON airlines. I have more faith in the latter, but I still say..
Quoting ShannoninAMA (Reply 12): the luxury market from NYC to LON randomly spurred up, and is now oversaturated as a result.
Kanebear From United States, joined May 2002, 945 posts, RR: 1 Reply 17, posted (8 months 3 weeks 1 day 20 hours ago) and read 1417 times:
Quoting Atrude777 (Reply 8): Investors are not stupid, and would not listen to EOS alone by investing in the company. They do their own research and decide for themselves if it is worth the investment. Also notice it is an investment, not a loan which speaks pretty well for EOS.
Reminding again they are, and have continued to be FLIGHT level profitable since 8 months after their start date, which I know doesn't mean company wise but is a good start for the company nevertheless.
Oh yes they are. How else do you explain the .com bubble? The Asian currency collapse? The current mortgage collapse? All in part were fuelled by overexuberant investors. It's not a lack of intelligence; it's a suspension of disbelief and trust in the wrong factors. Even among the best investors; if they see a move made by someone they respect, they may just follow it even if they don't know why the first person made the move. Why? Because that first person may know something they don't and they don't want to get caught out.
BayAreaPilot From United States, joined Nov 2004, 58 posts, RR: 0 Reply 18, posted (8 months 3 weeks 1 day 17 hours ago) and read 1318 times:
Quoting Lightsaber (Reply 13): Personally, BA going into LCY with A318's is the biggest hit against these all business class airlines. How do you compete against what is arguably the most convenient airport in London for servicing the London O&D market?
You offer non-stop service instead of BA's one-stop service? Granted, it remains to be seen how much time the refueling stop will add to the flight time, but if I were in marketing for one of the other airlines I'd pound home the stop issue.
ThirteenRight From United States, joined Jun 2007, 275 posts, RR: 1 Reply 19, posted (8 months 3 weeks 1 day 5 hours ago) and read 554 times:
Quoting Atrude777 (Reply 8): Investors are not stupid, and would not listen to EOS alone by investing in the company. They do their own research and decide for themselves if it is worth the investment. Also notice it is an investment, not a loan which speaks pretty well for EOS.
Reminding again they are, and have continued to be FLIGHT level profitable since 8 months after their start date, which I know doesn't mean company wise but is a good start for the company nevertheless.
I happen to agree - regardless of how close they were or weren't to shutting down, there is a significance of a $50 million check being handed to Eos. They wouldnt have given that money to Eos if they didnt feel there was potential in the business model.
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From United States, joined Jun 2007, 275 posts, 
From Syria, joined Sep 2003, 5051 posts, 
From Trinidad And Tobago, joined Feb 2006, 2199 posts, 
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We have a winner! 
) 
But I dream and digress...
So maybe that isn't a great indicator. 