Why Long-Haul Low-Cost Airlines Always Go Bankrupt

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Writing by Sam Denby
Research by Sam Denby and Tristan Purdy
Editing by Alexander Williard
Animation by Josh Sherrington
Sound by Graham Haerther
Thumbnail by Simon Buckmaster
Select footage courtesy the AP Archive

Komente

  • hitempguy
    hitempguy19 orë më parë

    While the r2 of a linear regression can vary in the result, anything as low as 15% is for all intents and purposes useless. Not that I'd expect anything less from this channel. Pushing pseudo-knowledge of topics is not the same as being an expert, always hilarious when you run off the cliff of not knowing shit from shinola

  • Lee247
    Lee247Ditë më parë

    I see a Tui 787-9 every month at kingston BA competes with them with the 777 200ERs i would rather fly tui to where it goes in UK rather than BA

  • Sergei Garbar
    Sergei Garbar2 ditë më parë

    Only Sami Puro knows the answer. )))

  • ChrisYeoh
    ChrisYeoh2 ditë më parë

    Norwegian Long Haul is now kaput! The next one would be AirAsia X.

  • LP Pokefan
    LP Pokefan3 ditë më parë

    Who is here after Norwegian decided to cancel it's long-haul business?

  • tuban body slammer
    tuban body slammer3 ditë më parë

    R^2 of .36, .16 or .15 is not correlated at all, also the .36 you should remove the high leverage point at the top right. this video is rediculus

  • Guilherme Moritz
    Guilherme Moritz3 ditë më parë

    By Brazilian standards AZUL is not a low-cost carrier, it is actually the expensive one, even in the long haul market. Brazilian's low-cost carrier is GOL.

  • Pétrou Velteau
    Pétrou Velteau4 ditë më parë

    9:58 what the hell is that woman doing

  • WithTheWorks
    WithTheWorks4 ditë më parë

    Recognizing that 'data' is plural and using the appropriate grammar is my kink

  • Lars Gravdal
    Lars Gravdal5 ditë më parë

    Here after Norwegian quitting long-haul to even stay afloat. Take a look at its share price to see how much they're struggling, efficiently bankrupt.

  • Roberth Sjonøy
    Roberth Sjonøy5 ditë më parë

    Norwegian has just announced that they getting out of the long -haul business.

  • Violan Miro
    Violan Miro9 ditë më parë

    Your method in using statics is fundamentally flawed. A R2 of 0.36 is not conclusive. Linear regression with only one variable is not the standard procedure. If you absolutely want to make a regression, you should do one with multiple variables and try different models. But you shouldn't even try using regression methods first, because you can't be sure that your variables are independent. Onr method that would be the more adequate if you think that your meaningful variables are linear dependent would be PCA. And even that would not be conclusive, bexause the size of the sample is so small. I am not an expert in statistics (geometric toplogy which is far off), but I am quite sure that what you did is a mathematical nonsense. You should read undergrad level statistics and you woukd understand what are the issues and with postgraduate books I am sure that you can find a method more effective.

  • Shinbaal99
    Shinbaal999 ditë më parë

    I really miss long haul travel corona be damned!

  • Alex Zetsu
    Alex Zetsu11 ditë më parë

    P-values not R squared should be used. An extreme case is if you only had 2 airlines to study, everything would be perfectly correlated. Likewise, as you get more data (or... maybe not since that would mean more low-cost airlines opening up and that would distort data by adding competition and making existing airlines less profitable rather than complementing existing data) other factors you dismissed as unimportant like GDP per capita of origin, aircraft utilization, aircraft capacity, might actually turn out to be important. Or maybe you'll find they still aren't imporant.

  • Jake Day Williams
    Jake Day Williams13 ditë më parë

    All in on charters.

  • Douglas
    Douglas14 ditë më parë

    Latam is a merge between TAM and LAN Airlines. TAM was always about quality, so you could consider it a full service. LAN I don't know since its from Chile. But one thing I can say for sure: LATAM is none of them: neither quality or cost, that is why Azul is growing a lot. Azul is cost AND quality. With a horrible competitor like that you definitely gets a fair share of the market.

  • Douglas
    Douglas14 ditë më parë

    To summarize: flying still very expensive for a lot of people and they are already talking about tourism to Mars.

  • Jordan
    Jordan14 ditë më parë

    Where did you find the dataset? Is it publicly available anywhere?

  • Nihonium Mapping
    Nihonium Mapping15 ditë më parë

    It's pronounced Cebu Pacific, not Ceebu Pacific. Sorry, I can't stand it when the city I'm in is pronounced wrong.

  • Nerte
    Nerte16 ditë më parë

    The auto-generated subtitles are completely messed up and unusable. Please, add actual subtitles to your videos - you probably read your script from the written form anyway.

  • Zhi Han Lee
    Zhi Han Lee17 ditë më parë

    Scoot does short-haul low-cost flying too, after TigerAir in Singapore was merged into it in 2017 (it's Australian & Taiwanese subsidiaries were sold to VA & China Airlines respectively IIRC, who continue to retain it's original branding). Also Scoot might be relatively more financially secure as it's under SIA, with it's financial backing, & their low-cost & full-service flights respectively are also more co-ordinated, reducing canibilisation of each other's markets for flight routes e.g. Scoot flies from SIN to numerous smaller cities not (or formerly) served by SIA e.g. Nanjing

  • Fernando Campos
    Fernando Campos18 ditë më parë

    Simply nailing the pronunciation of "Recife", I'm impressed! Hahaha

  • DELICIOUSCHEESE999
    DELICIOUSCHEESE99918 ditë më parë

    R^2 values are extraordinarily low to draw strong conclusions here my dudes

  • Allie Gottuso
    Allie Gottuso19 ditë më parë

    The distinct tomato minimally squeak because jute proximately chop alongside a delicate whorl. bawdy, slippery bail

  • pipiligrama
    pipiligrama20 ditë më parë

    Can’t even imagine how would it be to fly NY to Sidney with a fucking mask on...

  • Max M.
    Max M.20 ditë më parë

    Great Video

  • Shivang Yadav
    Shivang Yadav20 ditë më parë

    This person sounds like half n intersting channel person but with not humour

  • Rupert G
    Rupert G20 ditë më parë

    I wouldn't call westjet "low cost" given for all their routes I've flown they are exactly the same cost as air canada or even more expensive sometimes.

  • Scallop
    Scallop21 ditë më parë

    Cebu Pacific: does everything that they should not do Also Cebu Pacific: profit

  • Maximiliano Leon
    Maximiliano Leon22 ditë më parë

    So its more profitable to find your niche than to compete with the big boys

  • Artur Castro
    Artur Castro22 ditë më parë

    Calling R squares of 0.16 and 0.36 very significant is a bad analysis at best

  • AleParmi
    AleParmi23 ditë më parë

    I'm not entirely sure that creating demand is the only key factor for success in this case. Condor and TUI have a very strong connection to tourist platforms and agencies. People buy holiday packages with the flight included. This is proven by the fact that buying a flight tickets only, with TUI and Condor, is much more expensive than purchasing it within a package.

  • Pastademiks
    Pastademiks23 ditë më parë

    woah you sound just like half as interesting, like literally the same wtf

  • Lars Vos
    Lars Vos23 ditë më parë

    Tui has another thing that works in their "favour" the flights they operate are (mostly) part of a package deal they offer, since they also own a lot of the resorts/hotels at their destination. So they are just feeding their own destinations. Yes they also sell seperate tickets but most people fly them because they booked a package deal with them. They kinda create their own demand, and since they oparate all over europe its easy for them to switch/send aircraft to where demand is more needed. (All pre-covid offcourse) during covid they were offering a lot of flights to places where it was still allowed/safe to travel like the Canary islands, Aruba, Bonaire and Curaçao where they would be feeding their own destination. And they could easily adjust demand depening on the status of their destination (green,yellow or red)

  • Steindele
    Steindele23 ditë më parë

    Thanks for your awesome videos!!

  • Šimon Vávra
    Šimon Vávra25 ditë më parë

    9:48 omg that beautiful Prague!!

  • Andrey Kelip
    Andrey Kelip26 ditë më parë

    in 2020 ALL airlines go bankrupt.... ((((

  • Eric Benton
    Eric Benton26 ditë më parë

    Anybody know what is the equivalent of a low demand, low competition job in electrical engineering? Asking for a friend 👀

  • andrei lin

    andrei lin

    15 ditë më parë

    Male escort👀

  • Justice Warrior
    Justice Warrior26 ditë më parë

    You did better RND than high paid CEOs in these companies!!!

  • Harsh Deep
    Harsh Deep26 ditë më parë

    Stat people in the comments: ???? all these correlations are hella weak.

  • Chris Skuse
    Chris Skuse27 ditë më parë

    West jet is not low cost or at least they’re trying to leave that market/reputation

  • little boy man
    little boy man27 ditë më parë

    and ill KEEP flying westjet because one time a westjet flight attendant complimented my totoro necklace

  • Stairway to Motivation
    Stairway to Motivation28 ditë më parë

    I appreciate your efforts put into the research and analysis. It's really great to see the aviation-related topic in the form of substantive video material that others can share and easily understand. However, your work is missing some crucial factors that answer why some airlines are successful, and some are not. Condor and TUI are in fact leisure and charter airlines, most of their seats were sold to tour operators, with TUI Airways (and subsidiaries) being a part of TUI Group, a tourist tycoon. Condor was owned by Thomas Cook, before its bankruptcy, then a new owner was sought, which was not found, the airline also had an affair with LOT Polish Airlines (in conjunction with the Polska Grupa Lotnicza), and 30% of the passengers were delivered by the Lufthansa Group, which was a feeder to Condor. It is not entirely appropriate to compare them with the other low-costs. It is a different business model. Eurowings was looking for its recipe for success, and the Germans did not really know what to do with it. The airline was successful on short-haul routes but unsuccessful on long-hauls. Before the COVID-19, Lufthansa Group was planning to launch new long-haul leisure, charter carrier, to replace Eurowings. Jetstar is a part of Qantas Group, while Scoot of Singapore Airlines Group, they are utilizing budget niche on their markets. Cebu and Azul are successful examples of low-cost airlines, but this is due to the markets they serve. Norwegian and Air Asia X sought success unsuccessfully, with the Norwegians effectively burning money on long-haul routes. WestJet was transitioning to a full-service carrier and launched its ULCC subsidiary - Swoop, flying only short and mid-haul. WOW Air failed, as Iceland market was not enough for two carriers, and they were not able to duplicate Icelandair's hybrid business model and strategy. So that is how it should be described, but you were right in the end. The clue is that the only scalable way for low-costs to succeed on long-hauls was to serve the tourist traffic, with charters and leisure routes, in cooperation with large tourist partners.

  • Bernard von Schulmann
    Bernard von Schulmann28 ditë më parë

    I think having WestJet on this list is not really correct. WestJet flys almost all its flights within Canada, which by nature makes their flights long but they are the only serious competition within Canada to Air Canada. WestJet uses the low-cost airline model but in this case in a very restricted market. WestJet will add and drop routes within Canada depending on demand, and they do this rather quickly. They will try a route for six months and then drop it, or make it only seasonal. WestJets international flights are almost in the winter months from Canada to warn holiday destinations. This has always been a very large charter market within Canada with low-cost flights. Because of the size of Canada and the linear nature of where the population lives, even with a population of only 37,000,000, the country has a lot of air travel across the nation. The restrictions against non Canadian airlines means the market here is well suited to an airline duoploy

  • Max T.
    Max T.28 ditë më parë

    norwegian is blessed honestly

  • MadsPlayz
    MadsPlayz28 ditë më parë

    RyanAir: Are you sure about that???

  • Liviu Dnistran
    Liviu Dnistran28 ditë më parë

    Great content. One small mention about TUI and Condor. The majority of their passengers buy those seats with a holiday package attached. TUI and Condor fly mostly as part of a holiday package and that's why they are the only company flying MUC-CUN(one exampe) direct in the middle of european winter. Even though they sell tickets to the mass market, most of the plane is full of holidaymakers going to a warm place in winter.

  • Starchy
    Starchy28 ditë më parë

    *mentions Cebu Pacific* Filipinos: Thou have summoned us!

  • Reza Pratama
    Reza Pratama28 ditë më parë

    English subtitle please, i dunno why the automated translate is only vietnamese

  • brickson98moto
    brickson98moto29 ditë më parë

    Just for reference, I’m watching this while taking a shit on a southwest flight. And I just heard the seatbelt light come on. Time for some shitty turbulence! Lol

  • Aura Tanishq
    Aura Tanishq29 ditë më parë

    More Give me more videos this isn't enough for me

  • John von Shepard
    John von Shepard29 ditë më parë

    Taishou hi

  • YQR Aviation
    YQR Aviation29 ditë më parë

    WestJet isn't low-cost anymore. They've got a full business class and economy premium layout on their new Boeing 787-9's and launched Swoop as a low-cost alternative. I'm surprised you didn't include Air Transat though

  • ricardo gurgel
    ricardo gurgelMuaj më parë

    Azul (from Brazil) aren't a LOW COST, NO WAY

  • Marcus Bates
    Marcus BatesMuaj më parë

    Who is here after the Reddit post in Bad Economics? 😂

  • Qatar001
    Qatar001Muaj më parë

    Thats why AirAsia X is not that cheap

  • Qatar001

    Qatar001

    27 ditë më parë

    @madscientist 666 nice

  • Jose Luis
    Jose LuisMuaj më parë

    Nice video!

  • Josh Thiele
    Josh ThieleMuaj më parë

    Jetstar isn't just a long-haul airline though, they pretty much are the EasyJet of Australia, and most people tend to fly with Jetstar if they want the cheap flights domestically.

  • Craig Martin
    Craig MartinMuaj më parë

    Westjet certainly started out by doing all the right things, cherry-picking high-profit, low-competition routes in under-served markets. Now they still do a lot of that but more recently just compete directly with Air Canada and are no longer low-cost.

  • Papi
    PapiMuaj më parë

    Emirates is essentially a long haul low cost airline and it's spectacularly successful

  • Daye Bajela
    Daye BajelaMuaj më parë

    Joon wasn't a LCC, it was an AF subsidiary whose business model never really made sense and so it was pulled during a restructure

  • Justin Santiago
    Justin SantiagoMuaj më parë

    The decisive anthony july wriggle because unshielded paradoxically label between a uttermost pvc. temporary, equable saxophone

  • B Nurse
    B NurseMuaj më parë

    Why would I want to fly a cramped budget airline long haul with no legroom and no IFE when I can fly in comfort on a full service carrier? Maybe that could be behind why long haul budget airlines keep losing money.

  • castlerock58
    castlerock58Muaj më parë

    Westjet is a short-haul, high quality airline that has recently added some long-haul high quality routes. It used to be Canadian Pacific which had long-haul flights and an excellent reputation for service. It sold its long-haul routes but still had a good reputation for service. It has recently started doing some long-haul routes again. I have never heard it called low cost. It doesn't belong in this video.

  • Patricia Sabay
    Patricia SabayMuaj më parë

    Cebu Pacific has always been reliable imo even when we still lived in the Philippines. It makes sense for us to travel from one island to another with Cebu Pacific (w/ the same # of hours) than travelling with Philippine Airlines. Also, Cebu Pacific always go on sale with their airplane tickets.

  • Ajit
    AjitMuaj më parë

    Thomas Cook wasn’t really Long Haul Low Cost, it was a holiday maker that sold package deals like TUI, and they went bust because of Retail side of the company. At the time Thomas Cook went bust, the airline arm was actually generating profit, not much something like £1m annually.

  • xamdun
    xamdunMuaj më parë

    Westjet is definitely not a low cost airline, it's just Air Canada lite. Exact same ticket prices for most routes.

  • Matthew Drummond
    Matthew DrummondMuaj më parë

    1:32 *He said the C word.* YT is going to be upset. 😏

  • mello13
    mello13Muaj më parë

    As someone who really likes commercial aviation and economics, your videos are the bomb man.

  • Matt W
    Matt WMuaj më parë

    'Why Wendover is obsessed with the Airline industry' next please

  • Phantom Aviator
    Phantom AviatorMuaj më parë

    I'm just gonna buy a bunch of Cessna 172s, teach every passenger how to fly, then let them figure it out or buy Caravans and just airport hop and use Carriers

  • Adomm
    AdommMuaj më parë

    Is Tui a low cost long haul? They are a holiday provider and have flights both long and short haul

  • Prabhu N
    Prabhu NMuaj më parë

    I wonder why those first 200 people count to signup Brilliant through wendover is not over yet?

  • Scott Pairman
    Scott PairmanMuaj më parë

    I could be wrong, but I'm not entirely sure TUI should be considered a "low cost airline", I believe most of their business comes from TUI package holidays as opposed to 'flight only' patrons

  • यतो धर्मः ततो जयः
    यतो धर्मः ततो जयःMuaj më parë

    Petition to make video on *German Autobahn.*

  • herbiehedgehog
    herbiehedgehogMuaj më parë

    Have you done a video on the design of the North American power grid? That seems to have some interest right now.

  • Gacheru Mburu
    Gacheru MburuMuaj më parë

    👍

  • Luciano radice
    Luciano radiceMuaj më parë

    I think Azul was the only airline connecting Bariloche ( winter tourist town in Argentina) and Brazil non stop.

  • Luciano radice
    Luciano radiceMuaj më parë

    mhhh i passed statistics at uni almost with the minimum passing mark because i didnt understand regression models. I kinda regret it now, but it seemed very heavy and i focused in other aspects of the course.

  • AE
    AEMuaj më parë

    Be careful with outliers: the # of hubs correlation is almost entirely generated by the single outlier with high leverage on the right (4:30). Removing this single data point as a robustness check , the R-squared drops to 0.006, signaling that the correlation is pretty much entirely dependent on this single outlier.

  • Mihir Agashe
    Mihir AgasheMuaj më parë

    That's all okay, but where are the jokes damn it!!!!!!

  • Reshmidevi kuswaha
    Reshmidevi kuswahaMuaj më parë

    Good jop

  • Helen F
    Helen FMuaj më parë

    Thomas Cook Airlines was a charter airline subsidiary company of a tour operator. TUI is also a multinational Tour Operator with multiple charter airline subsidiary companies. They then sell flight only tickets on the flights that they are running anyway.

  • AssDust
    AssDustMuaj më parë

    since when is WestJet low cost? canada has the most expensive cost to flight domestically

  • Sapna Nair
    Sapna NairMuaj më parë

    This is one of the best airline analysis I have seen

  • Tobias Josef
    Tobias JosefMuaj më parë

    Why is 14.3% variance accounted for "statistically insignificant" but 14.8% VAF is significant?

  • Jools VK
    Jools VKMuaj më parë

    Brilliant vid once again. Just a quick note: @1:11 Joon didn't go bankrupt but was rather discontinued, as part of Air France's new CEO's plans. It never made much sense anyway during its short existence. Joon basically was to AF what Edsel was to Ford: a useless and badly thought out brand. Talk about a marketing mistake.

  • Dan d
    Dan dMuaj më parë

    I just had a DATAgasm

  • Boeing 737 MAX 8
    Boeing 737 MAX 8Muaj më parë

    Wendover: *Mention Cebu Pacific* Pinoy Proud in 3 2 1

  • THEPedroTHE THETHE
    THEPedroTHE THETHEMuaj më parë

    But LATAM is a Chilean-Brazilian airline

  • chris pham
    chris phamMuaj më parë

    6:30 ... Have I been saying antithesis wrong?? 👀😬

  • zyxwvutsrqponmlkh
    zyxwvutsrqponmlkhMuaj më parë

    9:52 the furries are taking over

  • Boffin
    BoffinMuaj më parë

    and Westjet isn't a low-cost carrier. They have business class, lounges etc etc. Perhaps you'd be better off looking at Air Transat

  • Boffin
    BoffinMuaj më parë

    Norwegian would be fairly profitable if it weren't for B787 engine and B737MAX issues

  • yuoop noke
    yuoop nokeMuaj më parë

    Those were some extremely weak correlations. And what about more complicated relationships? Sounds like an oversimplification to me

  • Bushrod Rust Johnson
    Bushrod Rust JohnsonMuaj më parë

    There are many kinds of regression. They all work well in each of their intended uses for stuff like this. Not really great for projecting temperature predictions decades in to the future at tenths and hundredths of a degree precision with only decades of past consistent data to work with. The "Goodfellas" dog painting would be a better model. One goes east, the other west.

  • Scott Brown
    Scott BrownMuaj më parë

    Classifying West Jet as a "low-cost" airline is certainly stretching the definition to meaninglessness. (Although West Jet's promotional materials would have you believe otherwise)

  • yuoop noke

    yuoop noke

    Muaj më parë

    destinations... You can package holiday with them for cheaper than if you did it all yourself... When I flew to Cancun with them on holiday, over 3/4 of the passengers got straig

  • Devin Hendon
    Devin HendonMuaj më parë

    Hey you should make a video about the D.O.D.( US military) Chain of command, combatant commands, military regions where military personnel’s are stationed around the world and from the Commander and Chief at the White House and Executive officers at the pentagon to new trainee in basic that would be pretty satisfying!

  • Francisco Chagas Correia
    Francisco Chagas CorreiaMuaj më parë

    How did Cebu Pacific made the cut for the long haul low cost? Low cost, sure, but I think most of their flights are domestic

  • Robersora
    RobersoraMuaj më parë

    Petition to change Wendover to Flyover Productions?

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