Why Long-Haul Low-Cost Airlines Always Go Bankrupt

[@MudhaffarAdhwa]

"stimulate demand on routes with low demand* Low cost, long haul airlines: opens Pyongyang to Washington DC route

[@jonathanodude6660]

would legitimately work if americans werent banned from the DPRK.

[@austinli8891]

do Pyongyang to the Falkland Islands

[@Rantasalmi47]

Pyongyang to Kangerlussuaq via (N)ewark

[@wewantourdarbyback]

Editor: "Vaccines seem big at the moment, maybe we do that?" Sam, scratching his arm till it bleeds: "WE HAVEN'T DONE A PLANE VIDEO FOR LIKE THREE WEEKS"

[@bluemountain4181]

Don't worry, we'll soon get the logistics of transporting a vaccine at -90° to the middle of the Sahara by aircraft.

[@Ari--d]

@@bluemountain4181 answer: liquid nitrogen.

[@LyricsFred]

@@bluemountain4181 it's already done... The Logistics of the Covid-19 Vaccine.

[@maruku4445]

I thought your W icon was from the defunct WOW Air.

[@Gabrocol]

Remember, Wendover productions is a aviation channel

[@AverytheCubanAmerican]

"what's the secret sauce to a profitable long-haul low-cost airline?" certainly not Newark Airport

[@moonam8389]

Or London Stanstead 🙄

[@saamiyousufi1293]

HAI joke 😂

[@kyleb7435]

I'm so glad my home airport gets some attention. Bad or good attention I don't care as long as it's being said 😂

[@mstrmren]

Seems like the Secret Sauce is comeing out from Germany (TUI, Condor, and Eurowings)

[@finalascent]

August of last year - while waiting for an SAS flight to Scandinavia at Newark, a thunderstorm blew in and raged overhead for over an hour. Drip, drip, drip, from the ceiling. A seam opens up. More water. Then the seam lengthens and widens. By the time we were about to board, it had become a torrent rivaling the indoor waterfall at Changi - if not in beauty, at least in volume.

[@MrMarinus18]

Also the longer a flight is the more comfort matters. People are willing to put up with cramped seats for a 40 minute flight. But not really for a 300 minute flight.

[@spencerdavis1853]

I can't speak to other long haul low cost carriers but I preferred to fly Norwegian across the Atlantic because they had new planes with larger economy seats than those on legacy carriers' 777s. They made their money on add-ons.

[@albertosaurusrex6854]

​@@spencerdavis1853The legacies generally have pretty meh economy seats on their 777s. I'm 6'8, and flying from AMS to ACC with KLM in Economy was NOT fun.

[@hothotheat3000]

You nailed it. I use Frontier for day trips on the East Coast. I can get out of town for the cost of a tank of gas and the flights are short. I couldn’t do those seats for an international or transcontinental flight.

[@iyt6407]

@@albertosaurusrex6854 To be fair, if you're 6'8 there are almost no airlines that are comfortable in economy. I'm 6'4 and I have never flown with an airline where I had space to stretch my legs. The worst was Scoot airlines tho, a nightmare for tall people.

[@itsgonnabeanaurfromme]

I'd put up with it for 5 hours since I've done economy for 16 hours

[@Serenity17]

I'm so sad wow air went out of business. The cost to go to Amsterdam is now 2.5x what is used to be... I didn't know how good I had it back then.

[@tek1645]

Wait you're alive!! Bro I miss your r6 vids even though I don't play r6 anymore.

[@lmlmd2714]

Yep. It's like when Air Asia X pulled out of Europe. London to Perth via KL for under £300? Happy days...

[@kkmac7247]

1M subs but not verified?

[@zhongmingyuan52]

flights to China are 10* more expansive now

[@danmcm8082]

Wow

[@waaahl]

Death, taxes and *Wendover plane videos* .

[@_thereswaldo]

Omgg 😂😂😂😂

[@4777hamza]

of which you cannot escape/

[@iniesta8856]

All inevitable 😂 like what ya did there

[@sjgabhane]

@@iniesta8856 gg4 ;:%%-

[@edvaira6891]

Wendover videos are MUCH MORE PLEASANT THAN THE OTHER TWO

[@cedricye1767]

Norwegian Air: "OH NO IM GOING BANKRUPT HELP" Wow air: "first time?"

[@itstomatogear6806]

Congratulations 🎉👏 of being the top comment 👍😁 (as of now 😈)

[@AaronShenghao]

Norwegian government: sit tight, Daddy is here. NOW GO BACK TO YOUR ROOM AND THINK WHAT YOU HAVE DONE (restructure)

[@johan664]

@@AaronShenghao Norwegian was recently denied money from the Norwegian authorities.

[@nycameleon]

Poor Norwegian bet wrong... we got a 737-MAX - grounded on crashes and 787-8 - was grounded on Lithum fire for a while... my last 4 Norwegian flights were on charter 777's

[@adamsfusion]

I wonder if Norwegian's poor customer experience is an additional punch in the gut. The only time I flew Norwegian I had a horrible experience and ended up switching back to a regular cost long haul carrier. They're sort of known for their terrible customer experience, at least here in the US. To me at least, the cost between the two wasn't _that_ different from one another after all additional costs were put in. In the age of COVID, I feel (completely based on anecdotal reasons) that the biggest group of long haul customers are business or people who can afford more in their routine flight plans and thus would be more likely to go for other airlines like Delta or United who may provide even marginally better comforts.

[@michaelscott7166]

TUI are really just a package holiday company that sell tickets on their flights as a secondary revenue stream.

[@TheRafftnix]

Condor does the same, even though they do not belong to a package holiday company anymore.

[@killyouripad6326]

@@TheRafftnix They were many years owned be Thomas Cook. When they got bankrupt, Condor survived with the help of the German State and are now completely reorganised an own company.

[@creatzzzz]

Yep they are creating demand by putting together package holidays to locations other airlines don’t serve.

[@bearmugs1408]

well creating package holidays is one the best ways to be successful in the long haul - budget market. The whole package part is what allows you to fly destinations with barely any demand and still get away with it. Some other long haul budget airlines succeed without the help of package holidays, and it is possible. But it keeps you floating

[@nukefazer1967]

kzbin.info/www/bejne/qnnPY4p9e615faM

[@Sharma-xw6ml]

Make a "why Wendover would go bankrupt without airlines" for April fools

[@justinblin]

The insane logistics of a Wendover video

[@domsolanke1619]

As a Canadian we all know Westjet is not a low cost longhaul Airline, its literally the same prices as the legacy carrier Air Canada

[@matthewriege1473]

Yeah, I feel like Air Transat would have been a much better candidate for this video.

[@TheEDFLegacy]

Wasn't it a low-cost airline in the past? Or is Air Canada a premium Airline?

[@domsolanke1619]

@@TheEDFLegacy yea like over 15 years ago, now they are just an alternative to Air Canada by name and nothing else

[@gavinmicks227]

Sunwing would be better known

[@torenthe_expert8977]

I never fly air canada for some reason

[@Coolmark123]

this was better than some of my business school classes in university

[@sam08g16]

Anything is better than business school classes

[@rootbear75]

This was better than some of my classes for air traffic control.

[@notapplicable4567]

Ikr

[@johnm91326]

Probably because you didn’t really learn anything

[@terguo]

Never expected to see u here bruh

[@finalbox4416]

"but....but this time it's different" - every airline founder a couple of years before they go bankrupt

[@E1craZ4life]

Watch out for Vaas; he’ll enslave your ass!

[@jakeblanton6853]

How to make a small fortune in aviation? Start out with a LARGE fortune... :(

[@Sorcerers_Apprentice]

The easiest way to become a millionaire is to be a billionaire and start an airline.

[@vincentmuyo]

The easiest way to make a small fortune in roleplaying games is to start with a large fortune (is another variation I've heard)

[@jakeblanton6853]

@@vincentmuyo -- I heard the aviation version of it MANY years before I even heard of a "roleplaying game"... I'm I'm even counting D&D in the "roleplaying game" category, even though I have no idea how someone could event *try* to monetize that sort of thing from the D&D geeks...

[@windywendi]

Now this just feels like ancient history, a time where people could fly everywhere without worries.

[@seanp2035]

"Dad what's an airplane?" "Let me tell you about before the dark times"

[@IdkJustCookingDude]

Don't even say that man, don't accept this new normal

[@AragornRespecter]

Bro stop being such a baby, I went on a flight two weeks ago it’s no big deal

[@nguxred166]

@@AragornRespecter which country to are from and you shoudnt do that

[@BargainBinkey]

@@nguxred166 “you shouldn’t do that.” A country founded by rebels and now we’re afraid to test the waters of what we’re told. Pathetic, honestly

[@ae1ae2]

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.

[@davidhildebrandt7812]

That would be TUI, on which a lot of his arguments seem to be based

[@samxiang4669]

Looking at the other two regression lines with significant R-squared values it also looks like there's an outlier that might have an important impact on the correlation no?

[@viktory8263]

Correlation cannot be taken seriously for such a small sample size in the first place.

[@JeanClaudeCOCO]

@@davidhildebrandt7812also they fly 2 or 3 times a week from all those cities, and not just banking on one hub, during the high season, making sure their planes are full each way. They also have vacation packages tied to flights enabling them to have certainty as to who’s flying and they can up gauge whenever there is more demand by their network of tour groups throughout Europe. The other low cost long haul airlines can’t beat that certainty instead they have to run almost daily flights like their legacy competitors and fly to the same airports as them.

[@LiviuDnistran]

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.

[@PaddingtonXp]

Ok, TUI and Thomas Cook are/were NOT budget airlines, they are/were the airlines of two MAJOR european tour operators, hence their peculiar networks and low frequency of operations.

[@ellchaplin851]

Exactly! And TCX airlines WAS profitable, the retail side wasn’t and it brought the entire company down. If it was just an airline, it would most likely still be operating

[@justastudent1423]

Azul is also hardly low cost too. They're pretty middle of the road price wise, and their have pretty good service and seat space, not like what you'd find in say Ryanair. They may be on the cheap end of spectrum for average airlines, but they're not low cost

[@wannabedal-adx458]

@@justastudent1423 Low cost means low cost structure as in the what the airline pays for, not what they charge you!! I can find cheaper flights on Delta Airlines sometimes compared to Southwest going to the same destination!

[@wannabedal-adx458]

That is a good thread to pull on!!! What failed in that sense, the other portions of the tour company or the airline itself? Did Wendover just analyze the financial and operational factors of the airlines and how they performed? (I think yes). Finally did that matter for the success or failure of the airlines he mentioned (being tied to a tour operator)? Of note, Allegiant Air in the US, does not do so well and they follow the same model as TUI & Thomas Cook (low cost, tour oriented flying). Just some good, additional discussion points.

[@Croz89]

Big tour operators have been suffering with the rise of more DIY travellers and cheaper or better quality package holidays from smaller more specialised competitors. They did get a bit of a rebound this year as people who did go on holiday wanted to play it safe with their money, but looking forward I don't see the trend reversing. The days of people being happy being in a big resort hotel in the costa del sol or florida with a breakfast buffet and kids club are going away.

[@Akislav1990]

I was used to watch wendover videos on my way to the airport/at the airport, since publication aligned with my usual schedule. Since covid hit, being at the airport is nothing but depressing. I even miss those damn duty free shops. Watching this video right now from Vienna airport brings a unbelievable sense of normalcy back. Thank you from the bottom of my heart!

[@abufarsakh9919]

Vaccine probably will be available to everyone in June and they will start distributing it in a few weeks. We have gone since March, so we r more than halfway to the finish line!!!

[@SupremeLeaderKimJong-un]

Long-haul low-cost airlines: go bankrupt Air Koryo, vibing: Sucks to be you 😎

[@Alowaxy_Terraria]

LMAO

[@elijaha773]

Wow. Your two comments showed up right next to each other.

[@randomcommenter4675]

That’s because people fly Air Koryo for its luxury

[@themaus3847]

Best Korea wins every football match, every living standards award and most importantly, our glorious Best Korea airline Air Koryo wins everything.

[@jackmatthews3592]

Imagine if this was actually kim jong un.

[@nienke7713]

TUI (Tourism Union International) also doesn't just offer flights, they're invested in the tourism industry more broadly, they have travel agencies where they promote the destinations they fly to and offer deals on a combination of flight, accommodation, and activities (and nowadays they also offer them online). They manage to create demand for their flights this way, as well as getting a cut of the accommodation and activities booked trough them.

[@braedenmatson]

"Hey Dad, tell us a scary story!" "Norwegian Airlines."

[@imanavgeekdontjudge5714]

@The Jommunist, The Jommunist & THE JOMMUNISTnah, mh370 is scarier

[@MilwaukeeF40C]

Tower Air

[@jakubondrus6064]

It's actually Norwegian Air Shuttle, no such thing as Norwegian Airlines

[@lzh4950]

11:55 OSL-BKK might be hindered by Russia refusing to allow Norweigian to overfly it's airspace though

[@jakubondrus6064]

@@lzh4950 I can't imagine why the Russian authorities wouldn't allow them to enter the Russia's space though. Maybe unpaid fees are the only thing I can think of

[@jbbahamas]

Tui / Condor aren't 'Long Haul Low Cost' airlines - they are charter/holiday airlines. There is a difference.

[@hoixthegreat8359]

Same with Thomas Cook

[@richardschenk4058]

But they basically work the same way.

[@rizkyananta5461]

its frequencies that makes different less competitor on their route..and hey cheap price..it goes the same way..like condor flight from frankfurt i guess..to the small city in canada..seems stupid moves..but it works

[@CaptainSlow008]

​@@richardschenk4058 Nope. Creating demand and Pricing work completely different. Creating demand works different because for example TUI sells mostly holiday packages; they can go where the demand and can adjust accordingly. Package pricing is also a thing; reducing your profit margin on certain packages spreads risk. Also, the profitability of the LongHaul Airline part is different: 1 day they can give you a big 'discount' on your ticket in the package and keep a lot in 'fees'; where on other days they can reduce fees while increasing the ticket in package. Where do you want the money to go: the airline part or booking part (or the hotel-part); that all has to do with tax of course.

[@aselwyn1]

Westjet is not even a LCC anymore they have gone premium too

[@TheMrFabian1]

In Germany we call this the "Air Berlin effect". But then again, we suck at building airports, so that might have contributed to the issue as well.

[@evilhamsterzz]

the airport in munich is quite nice imo. usually very quiet and clean

[@mstrmren]

Naja, aus Deutschland ist ja Condor und TUI, alsoooo

[@timitonagain]

#dankeTXL

[@geisterfahreruberholer2171]

Everything from Berlin goes nuts. Airlines, airports, debts, governments...oh wait!

[@almerindaromeira8352]

@@geisterfahreruberholer2171 berlin ist nicht mal deutsch. Kenne ja gar keinen der da gerne wohnt

[@zallaevan]

Although I'm not a big fan of sponsors, I need to admit that I really liked how he showed us with all those graphs and correlations what he learned with Brilliant. You got me there, Sam.

[@FelipeFV91]

I’d never imagine seeing my city in a Wendover Productions video since it’s not a logistics or business hub by any means, and yet there Vitória is at 8:38. Made me miss home, cheers! Love your content!

[@Eriksk8ordie]

As a Brazilian, I just appreciate how you pronounce "Recife"

[@EvanAviator]

Heh see fee

[@pedrofauzi873]

Engraçado é a Azul ser considerada "low-cost"

[@Stormchasing101]

Mais brasileiros aqui🇧🇷

[@Stormchasing101]

​@@pedrofauzi873Azul é meio low-cost porque (usando a latam) a passagem da latam para orlando é: 4000 (por enquanto) a da azul é:2000-3000 (agora) é mais barato

[@thisisjustaprofile]

Me: Well, time to take a break from studying econometrics and statistics Sam: LOOK AT THESE REGRESSIONS

[@Dayvit78]

But regressions are fun :)

[@germangaray1210]

@@Dayvit78 Yea but no sources? Suspicious, that data is not usually publicly available

[@nukefazer1967]

kzbin.info/www/bejne/qnnPY4p9e615faM

[@macattack57]

I've flown Condor many times going to Germany, and one of the main reasons I picked them was that they operated a non-stop flight from Phoenix to Frankfurt, which no other airline offered. Every other flight had at least one stop.

[@mrbozo6199]

the flight is back now

[@psgman41]

I just learned that you can do a regression with ten points only ... and that a R2 of 0,16 on a regression of 10 points is considered interesting/significant....

[@WIRRUZZZ]

If you can reasonably assume that there is a linear relationship and you just want to figure out the coefficients, I don't see why you couldn't. But in this case? Given the sponsor bit a the end this looks a lot like "I just (sort of) learned about (the absolute basics of) this thing, let's use it for ALL THE THINGS!" Shoutout to R²=0.1439 (significant figures, anyone?) being "insignificant" but R²=0.1484 is considered relevant . . .

[@psgman41]

@@WIRRUZZZ haha yeah. And I was almost going to say : "EH NEXT TIME, USE 2 points of DATA, you will have an R2 of 1 :D !!!!"

[@bjdefilippo447]

@@WIRRUZZZ I thought the same (sponsor comment) because I'd been wondering why on earth he wasn't doing a multiple regression, then I noticed the sample size.

[@germangaray1210]

@@WIRRUZZZ Yea, the maths on this video were kinda suspicious. Also, no data source.

[@Wendoverproductions]

I mean, yeah it's certainly a very limited data-set, which is why I never declared a "conclusion" in the video, only a hypothesis (which is why I always say the data suggest, not the data say/tell us.) This was the largest data-set I could get though, as I took every low-cost carrier in the world (according to the ICAO's list of LCC's), narrowed that down to this with long-haul operations (flights over 2,400 nmi), then I narrowed that down further by excluding those without independent financial reporting (ones like Joon and LEVEL that have a parent company and are too small to be required to independently report) and that left me with these ten. So, yeah, it'd definitely be nicer if there was more data, but there just isn't.

[@michaeldaveapo7207]

Simple reason why Cebu Pacific profits from high-competition routes: they’re cheaper than full-service airlines like their MNL-SYD, MNL-DXB, ILO-SIN, DVO-SIN, MNL-HKG, CRK-HKG, MNL-NRT, MNL-DPS that caters to budget travelers, OFWs (Overseas Filipino Workers), Like Wendover said, leisure and family travel also stimulated demand especially in Boracay. Filipinos like cheap deals and travels regularly.

[@jackmclane1826]

TUI is also a full scale vacation corporation with travel agencies, resorts and everything related to (upper) middle class vacationing. They can fill their planes also with their own customers. You can see that they primarily connect semi-exotic vacation destinations to europe. Other than vacationing, long haul flights are MOSTLY for business travellers... those that don't ultimately care about 50€ cheaper ticket prize, because it's not them that pay it. They prefer a juicy bonus program, lounge access and status miles. There are not that many people with intercontinental family ties.

[@architthopay3327]

What's interesting is that whenever I play Airline Empires (a web-based airline business simulation), I run into a similar problem: All of the trunk routes between major city pairs get clogged up with flights from competitors, which makes it hard to turn a profit on those routes. So, the strategy I prefer to use is to fly low frequencies between small and medium size city pairs (like Oakland, CA to Buffalo, NY). Since these routes have little competition, turning a profit is much easier. It's fascinating to see that the principles of my game strategy are actually applicable in the real world.

[@cassiolins1203]

The fun thing is that Azul is actually the most expensive (in average) airline for domestic flights in Brazil.

[@nothanksonh.w.3385]

This channel provides better documentaries than most big channels I have ever seen

[@VonRix]

Excellent. I remember when Ryanair started to fly from Kaunas to Eilat, suddenly everyone around me decided they want to visit Eilat. Pretty sure most did not know where Eilat is week before. When Ryanair started to fly from Vilnius to Amman, suddenly everyone decided they like Jordan and want to visit it. When Wizzair started to fly from Riga to Kutaisi, all the travelling jetset decided that this is the “go-to” place. When I travelled to Brazil, I could have fly London - Rio with Norwegian, but chose British Airway, because the price was the same and I like BA. When I wanted to fly to Brazil again, I chose Condor, because price wasn’t that cheap, but they were the only ones who had direct flights from Germany to Brazilian Northeast where I wanted to get to. So this totally makes sense to me.

[@onenightblitz]

"What's the secret sauce?" For Cebu Pacific, it's Filipinos. Lots and lots of overseas Filipinos travelling back and forth for the holidays.

[@kuyaleinad4195]

Probably also because the Philippines in general is pretty underserved by other airlines and if they do, they tend to funnel into Manila. Think most Filipinos don’t want to do connection flights in Manila and would rather land in their nearest airport which is where Cebu Pacific comes in 🤷‍♂️ Hope PAL or Cebu Pacific does a service from London to Clark since people from Northern Luzon really don’t like driving across Manila 😭

[@redentorgabrielulsano2812]

Video: A little Pilipino reference in one video Filipinos: This is interesting, i'll comment something unrelated

[@onenightblitz]

gotta flex that pinoy fried somehow, eh?

[@Thesupermachine2000]

just finished my statistics course homework: Starts laughing correlationately

[@nukefazer1967]

kzbin.info/www/bejne/qnnPY4p9e615faM

[@thegoldennuggetyt]

My best guess is that the proportion of cost that fuel is gets higher the longer the route is, and if you take away amenities from those routes they are very slightly cheaper than others but a whole lot less bearable.

[@francismiguelnunez6085]

Cebu Pacific basically turned the whole Philippine domestic aviation market to a wholly low cost market.

[@JohnDoe-ud3ue]

Wendover didn't take that into account. Out of all the airlines listed in the vid, CebuPac seems to be the only fully long haul, low cost airline. I'm guessing CebuPac has the domestic market supporting the long haul routes to avoid going under

[@machinerin151]

Wendover, I love, love, *love* all these thumbnails of videos you make that make it look like a package, a box, a hull, an outer shell or an inner part of a video as if it was an industrially produced physical commercial product. My industrialist nerd self really appreciates the effort you put into them. Thank you for making my days brighter every time I see one of those unmistakeable thumbnails. I always take a few seconds just to look at it and appreciate the effort put into small details like screws, scratches, rust, shadows, wrinkles, codes and icons, etc. If you're not making them yourself, I'd looove to meet your thumbnail artist one day. They're a genius and I want to marry them.

[@DavidOwen-hn1oq]

I come from a future where low cost carriers are failing everywhere. Low cost carriers only work when labor is in surplus and the economy is struggling.

[@jpmzf]

Azul has a VERY strong short haul operation in Brazil. The strategy is bringing PAX from cities that doesn’t have direct flights to full the long haul flights. That way they can charge more than the other airlines that doesn’t give this option.

[@tiesmuys]

KLM does that too

[@Wendoverproductions]

This was actually one of the factors I looked at because I was wondering whether to have a successful long-haul unit a low-cost long-haul carrier would also need a short-haul one for feeder traffic. Quite a lot of people in the industry seem to think that's part of the magic, but the nature of connecting itineraries is that they're revenue-diluting. You have to charge less than an equivalent non-stop flight because passenger view non-stop as a premium, meaning an airline earns less money. Simultaneously, connecting itineraries cost more to operate because airlines have to operate two flights (or more) meaning two sets of landing fees, two sets of baggage handlers, two sets of gates, more fuel cost, more opportunity cost with using airplanes for longer, etc. However, to test this out, I used the ratio of long-haul to short-haul aircraft in a given airline's fleet to act as an indicator of what the ratio of long-haul to short-haul operations is for them. Azul, for example, had a pretty small ratio of 0.085 since they have such a strong short-haul operation, and they were only beat out by Eurowings and WestJet. In the end, there was a slight negative correlation between LH to SH fleet ratio and profitability, meaning low-cost long-haul airlines with a higher proportion of short-haul operations did a little better financially, but the correlation was quite low, so it couldn't be considered statistically significant and, even if it was, the negative correlation was quite low. So, TLDR, the jury's still out on whether low-cost airlines need lots of short-haul to make long-haul work.

[@TheGroovyGuitarDude]

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

[@Hevlikn]

Yes. It's not Anti-thesis, because english is a stupid horrible language. Ant -ithe-sis is closer to the pronunciation, but Sam probably overly emphasises the Ant though

[@abufarsakh9919]

@@Hevlikn yes English is wierd Though Thought Hiccoughs Plough Rough .. yw

[@usernamefreaks]

Sam pronounced it correctly.

[@IIDave]

Jason Chen unlike the word route, which he pronounced incorrectly about 400 times! 😜

[@archdukefranzferdinand567]

@@IIDave Both /ɹuːt/ and /ɹaʊt/ are correct pronunciations

[@francoisunger6466]

That's quite a bunch of Apple charts, no label no units... But you know it's fashion they say

[@liesdamnlies3372]

"Apple charts" XD That's great. I'm keeping that.

[@georgesbv1]

Low-cost means the customers believe that they can reduce the cost by renouncing some services. It works for short haul since you can go on a quick city-break with a light luggage, you can squeeze a little more for a 1-2 hour flight. or skip in-flight snack.

[@airplane800]

I've been studying airline management for more than 30 years. I have a masters degree in airline management and I teach courses to airline analysts from all over the world. I also taught many university courses on the topic. I've read almost every single book written about the topic. It is a tough business to manage. Things are much more complex than you can put on a 15 minutes video. The video covers some good topics but I can tell that those airlines knew in what kind business they were entering and they decided to enter anyway, even against the odds. The secret is to understand why these people enter this kind of business. Starting an airline is like dating a beautiful girl. She is so beautiful that you ignore the complicated personality. After the passion is over she gets fat and you finally discover that you need to pay the bills.

[@hannesmeuleman5007]

Something that he doesn't mention but i think has quite an impact is that several of these airlines like TUI and condor also have touroperators so they create even more demand and not just with the routes

[@shivpatel7506]

Finally, a plane video! I was beginning to sense something was wrong.

[@raghav3558]

I think he was captured by the fbi

[@nicobknyc]

me too!

[@swiftflight7927]

It's only been a month (2 videos) 🤭

[@shivpatel7506]

@Brayden Rothe When you’re obsessed with dragging airplanes into every video you possibly can and you don’t make a video about it for a span of more than 1 video, something is wrong.

[@swiftflight7927]

@@shivpatel7506 you got me

[@albomaa]

On October 2019 he released the video “why so many airlines are going bankrupt” in which said AirAsia X was one of the only profitable low cost-long haul airlines ironic

[@albomaa]

@seeriu ciihy he’s mentioned wendover a few times in HAI videos

[@lowellfinn]

Yes he say that air asia is profitable in that other video

[@darryldeed]

AirAsia is profitable, AirAsia X was never if I recall correctly

[@lowellfinn]

@@darryldeed it is know bankrupt

[@leflores91]

I used to work with WOW Air (JFK to KEF). It was a seasonal operation, for summer 2018. It didn’t take long for Wow to end operating.

[@gomezmario.f]

Hello, Am from the Gambia, you literally made my day when you mentioned our one and only city Banjul.😁

[@gomezmario.f]

@J.W. S.D Nope.. only one. we are VERY small.

[@TheBodyOnPC]

Why not use multiple regressions? And are there not too few data points with too low correlations for any of them to be significant? What were the p-values for the different regressions?

[@alessio622]

“if you torture the data long enough, it will confess to anything”

[@Beerfazz]

@@alessio622 this does not quite apply here. He is asking for values that determine the significance of the shown data regressions

[@fowlerj111]

Yes I wonder whether any of the factors were correlated with each other - you'd test for that with Variance Inflation Factors

[@alessio622]

@@Beerfazz true

[@zimbu_]

Problem is that they're doing statistics with the goal of getting "top 3 correlations" for a video. Also I think the "number of hubs" correlation might partially just come from the fact that there's no very large companies with very small numbers of hubs (unless they adjusted by doing profit compared to the size of the company). P values for the r^2s around 0.15 are something like 0.25-0.3. (There's ten crosses and they've given you the r^2 -> n and r -> p value.)

[@kicksledkid]

"Low competition routes mean profitability" Westjet, one of only 2 major airlines to fly domestic in Canada: *Heavy Breathing*

[@aidanbazan7769]

Air Transat, West Jet, and Air Canada are all major airlines. Although its true that after that they become a lot less... major.

[@crai-crai]

Other airlines simply aren't allowed to compete between Canadian cities. And every time Canada gets a 3rd airline, the competition squeezes them out.

[@dabflies]

@@aidanbazan7769 Transat only competes on vacation destinations. They really don't compete in Western Canada, nor do they compete in the Domestic and Transborder markets.

[@autumnspring1573]

“and do it with the 737max!” said the boardroom yeah how did that work out?

[@timewave02012]

Still safer than driving, I believe.

[@juanfelipegodoy4011]

Nobody: Wendover productions: “the numbers mason, what do they mean?”

[@lordsiomai]

LMAO

[@sx3137]

“The data shows...” r squared is .16 lol

[@adamdickinson2894]

RealLifeLore: makes a video about planes Wendover: *oh boy, I'll show you who's boss*

[@noahdeng9401]

Finally, An airplane video. Welcome back, everyone

[@nukefazer1967]

kzbin.info/www/bejne/qnnPY4p9e615faM

[@CD3MC]

FOR THE LAST TIME, WestJet is NOT a low-cost airline. they are always on par with Air Canada, which is never considered a budget airline.

[@AmazingAmigo]

Damn, never seen a Canadian that angry before

[@yannisl8259]

@@AmazingAmigo he might not be canadian

[@Rc2Go]

I GET SO MAD ABOUT THIS... Westjet is expensive with low cost features (yes Canada sucks with airlines)

[@fisherspride]

their 737s don't even have IFEs idk if you can consider that not budget

[@Liphted]

Lol this cornball acts like he's been saying this to Bendover for years... corn.

[@lzh4950]

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

[@bcdm999]

"Westjet is long-haul low-cost" Every Canadian: *doubt*

[@aidanbazan7769]

WestJet flies multiple 787's from Canada to Europe, that's pretty long-haul. But they aren't low-cost, that's for sure.

[@nascaracing9]

Nothing in Canada is cheap

[@jakubondrus6064]

@@aidanbazan7769 honestly I wouldn't consider TUI Airways or Condor truly low-cost either

[@helenllama]

@@jakubondrus6064 Thomas Cook was the same as the TUI airlines. Not low cost

[@crai-crai]

They started out low-cost compared to Air Canada, but now those 2 airlines just match each other's pricing.

[@Chris-cj5rh]

Wendover promoting brilliant: They take these incredibly complex above-college-level topics and boil them down into learnable modules Wendover promoting brillinant also: Shows b-roll footage of how to calculate averages

[@balam314]

Wendover: Brilliant takes these incredibly complex above-college-level topics and boils them down into learnable modules. Also Wendover: takes these incredibly complex topics and boils them down into learnable modules.

[@jacksonpuylara8873]

I loved that you included some regression analysis'! They are so powerful and so easy to use. I'm doing my minor in business analytics rn and we do this stuff all the time and it's so fun.

[@FancyUnicorn]

This is such a nerdy thing to say, I love it

[@bonelesswatermelon420]

Additional thoughts on Cebu Pacific: I'd say that they aren't really a true long haul low cost airline. Much of their profitability is derived from their strong position in the domestic (and some intra Asia) flights. Some CAPA analyses from before (if I remember correctly) have actually found that their long haul routes such as MNL to DXB lose out significantly. Their widebody fleet is more often used to increase capacity on super high demand routes such as MNL-HKG and MNL-SIN. To be fair, one long haul route that they seemed to be doing fine in was MNL-SYD. Though idk how that route is doing nowadays.

[@j134679]

Their tickets are too expensive for the shitty offering they have. Just a bit cheaper than full services airlines on some routes. And usually the most expensive "low cost" option.

[@spkpnxe]

High Demand Domestic Routes MNL - BKK MNL - HKG MNL - SG High Demand Domestic Routes MNL - CEB MNL - DVO

[@4plus4equalsmoo]

also, filipinos are cheap af

[@ianfromthephilippines]

The mnl-dxb route it more about a legacy play. OFWs use to return home and if you live south of luzon island that’s not cebu or davao. You can get cheaper fairs to go home.

[@raineob4996]

Ditto with WestJet, Canadian domestic flights fund their operations.

[@GameDawgs]

I went into this video expecting to be bored. I can now happily report that I was engaged all the way to the end. You did an amazing job on this video.

[@Hazza_Harding]

I'm glad that you mentioned JetStar, but I really wanted to hear more about why JetStar is doing well. It is actually quite a unique business model, especially since it offers a business class service. Although it is more like premium economy on other routes, I think they have managed to offer a premium service for a decent price, which also attracts a small portion of the business market as well (mainly SMEs) as well as the tourism market with people that have a few extra dollars to spend for a premium experience, but don't want to spend crazy amounts on business class on other airlines. They also fly long-haul but have Asian-based subsidiaries in many countries that offer short-haul international flights (without the premium business class product). I think they have managed to create an extensive route map around Asia and Australia, while tailoring the product offered on different routes to cater to the markets there.

[@TOTN17]

There are only 3 Airlines that fly domestic in Australia, Qantas, Virgin Australia and Jetstar, Qantas and Virgin Australia are more traditional airlines and Jetstar is the only budget airline in Australia and is owned by Qantas not to mention long distance rail in Australia is a joke meaning Jetstar has little to no competition

[@jyoung1210]

Since subscribing to Wendover, I’ve learned so much about airlines that I never knew before.

[@debated8358]

I’m still waiting for you to start your own airline - wendover airlines. Haha love your videos though, as they inspired me to start my own channel.

[@nid4u]

"Norwegian is deeply in red " I see what you did there

[@iamtheman78]

Literally missed the opportunity to say Norwegian is nose deep in the red

[@mateuszzimon8216]

@@iamtheman78 they have callsign Rednose :D

[@alestra1021]

Im sure TUI and Condors passengers are around 80% people who booked a whole Holiday with TUI or another company. Only a little percentage is booking only the flight which is why i wouldnt call them low-cost Airlines

[@R10barca]

I work for westjet out of Toronto and this is spot on!

[@consti9641]

5:12 As someone who has a lot to in Uni with statistics, it has the highest correlation, but it’s because of some airlines having unusually high number of hubs. In this example the TUI. To prevent this from painting a false image, there are some statistic measures (can’t really explain them in English tbh, not my native language) to prevent that happening

[@podemosllegara680anti-tikt6]

Can you say what are those in statistical measures to search and learn more about to them please

[@adamwuilmart]

Had the same thought as well. The airline with 18 hubs is clearly a "leverage point" which heavily influences the correlation. If you remove it, the fitted line becomes a lot flatter and statistical significance would drop a lot.

[@adamwuilmart]

@@podemosllegara680anti-tikt6 A year late, but see my previous answer :)

[@pauldowner1]

This is so true all my flights so far have been short haul in Europe and i have chosen cities/countries based on the price of the flight to that airport. Cheaper flight = More money for holiday.

[@shivpatel7506]

Wendover: Why Long-Haul Low-Cost Airlines Always Go Bankrupt Air Koryo: Am I a joke to you?

[@AxxLAfriku]

I recently revealed the genders of my two girlfriends. It got a lot of hate and now has 30 times more dislikes than likes. I am really sad that people can be so mean. Sorry for using your comment to talk about my problems, dear shib

[@DylanWebb101]

Air Koryo is owned by n.Korea gov not private so it’s subsidised

[@fredmdea785]

But he explains that there are a few that were returning profits right in the beggining od the video though.

[@yannisl8259]

@@AxxLAfriku bruh

[@Warriorcats64]

yes.

[@kentokyo]

Zip Air, an LCC established by Japan Airlines, operates long-haul flights. Its success has led ANA to launch its own LCC called AirJapan.

[@SlavaUkraini85]

A Wendover video about flying. It’s a good day!

[@carlosandleon]

Glad to hear Cebu Pacific get a mention.

[@TheGamingAlong]

Why are you proud that your airline is approaching bankruptcy?

[@MichaelGGarry]

@@TheGamingAlong Eh? They are one of the ones in profit.....

[@carl_estepa]

​@@TheGamingAlongPhilippine airlines was nearly bankrupted.

[@dayebajela9089]

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

[@mauritsjanssen7176]

4:31 one problem is that an R^2 this small does not say anything. There is real no correlation even an R^2 of 0.36 is considered to small

[@1o1ePic1o1]

To be honest, man, your thumbnail pictures are ace. You don't use those shabby reaction faces and it's still hella interesting. Real quality content here.

[@ericsun3036]

Thanks Wendover! Now I’m gonna go start my own long haul low cost airline

[@ryanbanks8276]

I fail to see why Westjet is classified as a LCC.

[@CJetsPlanespotting]

It used to be, but it’s not anymore. It’s since transitioned into a full service carrier, like Air Canada (but better).

[@TheOwenMajor]

Plenty of the "LCC"'s on his list don't really fit that definition. While they aren't legacy airlines, very few of them fit the Ryan air or Southwest model.

[@nathanabercrombie6116]

Winnipeg to Toronto with WestJet: $368. Air Canada: $278. They stopped being LCC before they started flying

[@TheOwenMajor]

@@nathanabercrombie6116 Well I'm not sure where you're getting your prices, WestJet matches Air Canada on most routes. And given the choice, I would fly WestJet every time.

[@liesdamnlies3372]

Is it only because Canada is really big? Because, well, we are, but WestJet does plenty of short-haul domestic and international flights too. I'd sooner say WestJet's success is down to a diverse business model. If one type of route starts dying, they aren't completely screwed (like, say, heavy international travel restrictions during a pandemic...).

[@justanoman6497]

I think it's like this. On "popular" routes where business travel is common, full service can and do extract their entire profit margin from business travelers, so the cost for leisure travelers is very close to that of budget airline with better service (possibly same or better if you were to opt-in to the budget airline services). As such, budget airline can't really compete unless they lower their profit margins, possibly into the negative. On less popular routes, however, full service will also need to depend on leisure traveler for profit, if they wish to operate there, and that means their price would be very high. This enables budget airline to undercut them while still earning a healthy margin.

[@flamingfalkor]

that regression analysis made me so happy

[@economicsinaction]

The day Wendover Productions is also an airline will be a great day indeed

[@Mici]

I hope the name will be Half as Airworthy like he said once

[@RetroLPGames]

Very insightful video! Just a remark on the 'number of hubs' regression: It seems like TUI is a big outlier there, being quite successful and having 18 hubs. Looks like if you remove TUI as an outlier, the correlation wouldn't be there anymore. So I'd be skeptical about the conclusion that that per se plays an important role. Thinking about it, more hubs of course enable more uncontested routes so that might just be reason for how it enables the other two effects?

[@314ax]

3:14 I don't understand the point of running regression variable by variable. Run multivariate regression to tease out the actual coefficients.

[@podemosllegara680anti-tikt6]

That would make the video shorter x d

[@jodlman]

Wendover Productions - the free consultancy for airlines

[@timbalion]

TUI, Thomas Cook, XL Airways didn't/don't operate under a low-cost model. They operate under a package holiday model. They do sell cheap seats, but that's generally a side business for them. They want to sell you ATOL/ABTA protected holidays around the world. They are not a low-cost airline, and the majority of their income comes from holidays. Can't really compare to Norwegian or Ryanair.

[@Bianca_Toeps]

It's interesting because in my mind, TUI is a travel agency, not an airline. Like, they feel more like a travel agency with their own planes than an airline with a marketing department.

[@hoixthegreat8359]

They are exactly what you describe. Thomas Cook had the same model, but had too much emphasis on in-person retail sales hence their demise.

[@greendude96]

Well...TUI is the world's largest leisure, travel and tourism company. And they have like technically 5 different airlines operating out of 8 counties. Which makes me curious as which ones were used in the video? Like they have LH routes also from Scandinavia too...

[@spiegelblank-d4j]

ya sorry a ~35% R^2 is not strong enough to draw any conclusions

[@jonathanjeffrymulyana4390]

But then that would be boring and there would be nothing to discuss

[@danekovic2796]

I'm normally a great fan of your videos, but I do not believe the statistical analyses you provided are strong enough to draw your conclusions. There are very few data points, and as you could see with the 'number of hubs' variable, taking away the outlier on the upper right corner of the graph would drastically alter your analysis. Similarly, one must wonder, if we were able to include more airlines, how would the regression coefficient change?

[@justinjones6810]

Part of this reason a lot of these airlines failed is because they are trying to buy or lease the most expensive planes either airbus or boeing if they would go with embraer instead by buying or leasing the e2 190 they could get a better deal and have a lower operating budget

[@thunder89]

And a big difference might be the customers targeted: tourists are much more price sensitive, open to new destinations and willing to try out a new airline. So cheap long haul flights from within Europe to new tourist areas will be more likely to be profitable (especially if, like TUI, your selling packages with hotel etc. included) than trying to compete on eg London-NY

[@chillax411]

You had separate R-squared values for each metric which indicates to me that you ran separate regressions for each metric. Considering the sample of airlines is low it probably would have been better to utilise multiple regression. You can then use the p-values to determines statistical significance of each metric's effect on profit. It probably would have yielded similar results, but the overall statistical significance (chi-squared) and predictive power (R-squared) of the model would be stronger.

[@andremp03]

I guess you could argue that WestJet is no longer a low-cost airline it's sort of switched more premium

[@casey6556]

Strong agree. In fact, they usually cost more than Air Canada when I look at booking.

[@craigcarter400]

I just checked and flights from Vancouver to Toronto are between 275 and 350 CAD each way.

[@sohopedeco]

@@craigcarter400 Wow. That's expensive.

[@aidanbazan7769]

Yeah. They even created Swoop as their low cost alternative.

[@vishwas7466]

A new Wendover vodeo: a blessing from the lord

[@andresemilfer]

I put this video to forget that I have to study for Econometrics finals. Dammit, Wendover!

[@sidneysun5217]

you can see why the "art of war" applies to business as well. "don't attack the enemy headon, attack where it's weak", as in don't compete if you can't win, go for the areas that have less competition

[@NicotineRosberg]

Wendover: Brilliant RealLifeLore: Curiosity Stream- Nebula

[@timothychin1594]

As a data scientist, my ears almost exploded when he said the word “regression” lol

[@alizeica519]

Omg, I'm doing a short essay on data scientists-

[@TheOwenMajor]

I'm in an econometrics class, I'm not putting off doing my assignments so I can hear more of this nonsense!

[@wannabedal-adx458]

LOL, yeah I don't think it was ears buddy!!! ;)