Why Disney doesn't have its own airline?
Daniel EtcheberrySubmitted by
Published: April 4, 2014 at 11:04 AM Hooters have had its own airline, so why not Disney? Not profitable?
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From James Trexen on April 4, 2014 at 11:22 AMIn an age of mergers and aquisitians, it would be very hard to start up a plane business now. Besides, people already despise the idea of children on a plane. How do you think a plane full of them would feel? As it stands, half the flight crowd enjoys a nice, quiet ride.
From Jack Partridge on April 4, 2014 at 11:23 AMFrom Wikipedia it looks like Hooters had an airline to basically give them a flying billboard. In that circumstance, there is no need for the largest Media Conglomerate in the World to need such a thing. Over the years Disney have built free marketing thanks to their world class films, theme parks etc.
As to why Disney doesn't operate an airline; is there any need? What does Disney gain from running a service that has very little to gain? In terms of routes, Disneyland predominantly attracts locals - so no need to fly - and WDW has guests arriving from Brazil/South America to Europe and the rest of North America. British Airways, Virgin and Thompson are at least three airlines that cover the UK market. So how does Disney try and win support there? The only destination company that I am certain has an airline is Las Vegas Sands which allows wealthy Japanese businessmen to use a private service to gamble. Disney have no reason to compete in this market which is already flooded. Airlines fly to Orlando SPECIFICALLY to cater for WDW. The same kind of question could be raised about mobile phones since Fastpass+ could use them. Or a drink company to compete with Coke. Why offer the same and make little profit, and ultimately no real differential idea, rather than use the best of whats available!
From Robert Niles on April 4, 2014 at 1:09 PMDisney built its own cruise line, and cruise ships cost much more than airliners, so fixed costs wouldn't hold back Disney here. It'd be a question of operational efficiencies.
Remember that Disney simply could contract with another airline to run a Disney-branded airline service, much as it contracts with Mears to run the Disney's Magical Express buses.
But why would Disney do even that? It could if it wanted to get more control of its vacation package business. Tons of visitors come to Orlando on charters. Disney could go after tour and charter operators by offering its own Disney vacation packages on a Disney-branded airline (again, potentially operated by another airline under a Disney brand. Regional airlines do this all the time for the "big" national airlines.)
I suspect that this would be more of a valued premium for guests on long-haul international flights than a flight from DC or Chicago, so if Disney were to pull the trigger on this, I'd guess it'd make the most sense to do it for international tour groups and such. But there could be some money available in positioning a Disney airline as a premium brand for affluent visitors, much like the casino example above.
And, of course, this only makes sense for WDW, as mentioned above. But given that Disney's gone into hotels, time shares, ground transportation, and cruising, really, air transport is about the only thing left.
From Brad Jashinsky on April 4, 2014 at 1:28 PMThe main reason Disney hasn't started an airline is because there's little profit in the airline industry. Most major airlines have gone bankrupt and/or been bailed out by the government at least once over the years. Southwest is the only long-time profitable airline that I can think of. Alaska Airlines has never been bailed out, but is not even close to as profitable as Southwest. As much as I love Virgin America, they were only profitable for the first time in 2013 with a ~$10 million dollar profits after years of $100+ million dollar losses.
From Eric Malone on April 4, 2014 at 1:30 PMI could see Disney doing its own airlines, if they can pass savings on to their customers and still make a profit. It's all about saturation, really. If you're going to have a Disney vacation for your kids, why not have it start from the second you leave the airport?
I think it could potentially be lucrative, but someone said that it depends on operational costs and I have to agree. There are a lot of aspects to airlines that need to be tightly controlled to ensure both customer satisfaction while still making profit.
From Jack Partridge on April 4, 2014 at 1:35 PMGreat post Mr Niles. However, I disagree that Air Travel is the only thing the resort has yet to address. WDW is essentially a Mega-resort. Theme parks, Hotels and Transportation between these destinations all work within the larger presence of a resort.
A cruise line, whilst another form of vacationing, was something that Disney knew they would be able to offer the "Disney Difference" on. A one off cost of around $500m could be paid off easily. In many ways it plusses the idea of the mega-resort. I don't know all the fundamentals of why they begun the cruises, but by operating out of Cape Canaveral - an hour from WDW - guests could get that extra magic for a few days with the bonus of beaches, dolphin encounters and complete relaxation. Now that the Cruise business is extraordinarily profitable, the company have followed Royal Caribbean et al and expanded to Alaska and the Mediterranean.
Rearing back to the Airline business. Does operating an airline offer that "Disney Difference"? Personally, I don't think so. When my extended family fly to the States, they prefer the airlines that they are accustomed to. Their holidays usually last two weeks where theme parks all the way to malls - seriously that's a day trip for some of them - are part of the experience. So whilst it makes sense for Disney in theory to offer an airline out of far reaching places, many of these holidaymakers want an overall experience of Central Florida. Being trapped in the Disney bubble may make sense for American tourists who want to visit for a few days/week, but for folk across the Ocean, it's too focussed on one destination. They pay thousands of dollars for a holiday of a lifetime. Many want the experience of visiting the US, rather than being stuck in one place!
The only way it could work would be to partner with a Tour Operator. But why would the Tour Operator want to do that? I have family staying in the Waldorf at Bonnet Creek this Summer, with another planning to stay in a Villa. These non-Disney properties make the most money for a Thompsons of this world. They attract cheap accommodation, (with the exception of the Waldorf :P) as well as other add-ons like Car Hire and Park tickets to make there profit margins to unassuming Brits.
From Mark Hollamon on April 5, 2014 at 7:52 AMNever going to happen. First, there is no money to be made and that pretty much shuts the door on Disney's involvement. Second, if they DID start an airline and pricing was consistently "Disney" who could afford to fly? There would be no savings passed along to the customer. That's not part of Disney's mission statement.
From Jaiden Cohen on April 8, 2014 at 4:16 AMAirlines make no profit. American, the biggest airline in the world is in chapter 11 right now.
From Anthony Murphy on May 4, 2014 at 5:32 PMI don't thin there is a huge upside for them. Airlines are hit or miss with the profits. Plus, not to be too morbid, if one of these crash, it would be really bad for Disney.
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