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Airlines

Looking at flyBe – Simplifying the Confusion

Flybe have had some difficult times over the last couple of years, but according to the reports announced last week the financials look to be on the up, but that still doesn’t take away from the sometimes disorganised way the airline has to route planning and bases in the UK.

The story really starts with the sale of the slots flyBe had at Gatwick Airport to easyJet. It had a decent route network from the UK’s second largest airport to points around the UK including Jersey, Guernsey, Isle of Man and Belfast, along with a couple of seasonal French routes. With charges going up at the airport, the airline wanted out and sold the slots to easyJet who have taken over many of the routes. Combined with a network wide restructure of routes which saw flights from Luton to the Isle of Man and Jersey it looked as if there would be a complete withdrawal of the London market.

This combined with expensive aircraft from Embrear, and yet more on order meant that the losses were growing. Although they now call themselves a regional airline, at the time they really didn’t know what they wanted to be – they were stuck between a low cost airline and a regional carrier, doing neither very well. This is going to change with the shift towards the Dash 8 prop aircraft, which will rule out the more ‘low cost’ routes, in favour of supporting their core regional network.

Creating a superhub at Manchester was a good idea after the absorption of BA Connect, enabling flyBe to fill aircraft connecting onto a long haul network. A similar, but smaller hub has also been set up in Birmingham given their presence at the airport.  Other bases have also been set up in Aberdeen and Bournemouth.

With a purple rebrand comes a return to London. A base in Southend thanks to Stobart Air providing a franchise type operation to the continent with some surprising routes to Germany, France and the Netherlands. Then along comes London City, arguably more suited to the ‘regional airline’ operation, but still high cost. The routes were different to Southend though, concentrating on the UK regional markets of Inverness, Aberdeen, Edinburgh, Exeter and Dublin.

With tough competition on the Dublin route it was dropped, along with a reduction of flights to Exeter – somewhat of a surprising choice in the first place following the reduction of flights to the South West. Following the train problems in the regional, flyBe reinstated the Gatwick to Newquay meaning another London entry point for the airline, now looking even more confused than ever. To make things even more confusing, given the connections to the Manchester Airports Group (MAG), another London base was opened at Stansted, with even more UK regional routes which were not opened at London City.

With EMB190’s still in the fleet, their internal codename of Project Blackbird saw two of them allocated to Cardiff, again some more UK regional routes, combined with a couple of leisure – not really a regional offering.

The airline themselves have confirmed that at times the market at London City has been challenging, but they already increasing rotations to Edinburgh, which seems to be the most successful route from the airport. Oddballs though include a weekend only Amsterdam –  going up against both Cityjet and BA with much high frequency.

The future looks to be set for them at London City, and their development will depend on the survival of Cityjet. A number of their routes have been dropped recently and would be a good fit for flyBe including Dresden and Nuremberg in Germany. At Stansted they are never going to win on these types of routes against Ryanair, who will always win on their cost base and has seen a retreat of easyJet to Southend, Luton and Gatwick rather than competing at the same airport.

It looks quite simple if you take out some of the clutter. London City is going to be premium, high frequency UK and near continent routes. Stansted is going take those routes which are more price sensitive and not always need the premium traffic – Newcastle and Isle of Man, while Southend with Stobart Air (assuming the association continues) will focus on smaller markets on the continent.

Remember although the airline might talk up low cost, that really means a low cost structure within the airline, and not always low cost tickets to the consumer. This really is now a ‘regional’ airline.

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Airlines

Travelling is no longer a luxury

There was once a time where travelling was a real luxury, at best a once a year vacation to the sun. Times have changed at that luxury is no longer there, its now just the same as getting a train or bus service, although it usually means leaving the country.

I know there is the added cost of £100 for a passport, although everyone has a passport now (unlike some Americans), which gives us access to world.

The luxury of travelling has been fuelled by the removal of luxury from travelling. Trivial I know, but the way which costs have been reduced, and the ease to which you can now travel really makes it feel like a commodity than a luxury, particularly in the short haul market and definitely when travelling long haul in economy.

We have already seen this happen. With the ever dominant low cost airlines in Europe the major player have had to respond with new fare structures and seat configurations on their short haul aircraft. America started the trend for charging for baggage, which was picked up by British Airways for European services, and therefore lowing the fare. Combined with this is the constant pressure to pack more passengers into an aircraft. The new British Airways A320’s at Gatwick have seats for 172 (easyJet have currently 180 – so one row more), that’s increased over time from the 160’s and now sees the withdrawal of the convertible Club Europe seat and much less legroom for Business class passengers.

Long haul has seen the same tactic. We have seen, especially on the 777’s that carriers are now introducing 10 abreast seating, up from the 9 of which it was designed for. The 787’s the same, with 9 across in economy, and the A380 could be seeing 11 across soon up from the standard 10. That cant be seen a luxury.

The question is will we ever see luxury travelling short haul again, and would anyone be willing to pay for it?

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Airlines

The Art of Changing Perception

It is great to be successful to one market, but that isn’t always the sure fire way to keep that success going in the future. You never know what is around the corner and to futureproof from what could otherwise be a difficult time is surely the most prudent and sensible plan of action.

The hardest thing to do thought is if you are selling something at a cheap price and have done for a number of years, how do you get people to pay more without adding a substantial cost to the bottom line. People will naturally always look at price first, value second – but it is not really the selling price, it might be twice as expensive as it was say five years ago, but how does it compare against the current competition.

Value is really the selling proposition then, what can be offered over the competition or how can it be done better to gain those few extra pounds. In reality it is the simple things that make the difference, people like friendliness and trust those who empathise and understand their situation. In the travel business that is generally the split between leisure and business travellers who are looking for different products from an airline or hotel.

The thing is having a reputation for cheap, also often comes with the tag of being unhelpful and poor in a crisis with the emphasis on ‘you get what you pay for’. What can you do to win those around?

Really there isn’t anything specific apart from giving exactly what the customer wants at a price they believe is good value. Maybe then, even that might not be enough to swing the naysayers around.

It really is a time for changing perceptions, winning on price isn’t winning, its winning on value which is the killer.

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Airlines

Backwards is the new Forwards

We are heading into a new cycle in travel, it was once all about the internet and ‘low cost airlines’ flying to places you didn’t really want to go. That is changing though, and not really for the reasons which most people think.

Yes, the internet and low cost airlines are not going anywhere, in fact they continue to thrive, but what we are seeing is a revolution, a revolution which sees the customer as king once again which a revisit to the motto ‘The customer is always right’.

We can trace this back somewhat to the change of CEO at easyJet. When Andy Harrison left the company was in trouble. It was beginning to pick up a reputation for lateness, along with indifferent product which had been ridiculed by the customer, especially in the UK after the famous Airline programme on ITV followed their earlier beginnings. With Carolyn McCall onboard hot from the media industry, the customer was put right at the heart of what the company does.

Although still keeping the low cost structure elements which customers had been crying out for were slowly introduced.  Allocated seating was the big one, and at the time a big step being the largest low cost airline in Europe to introduce it. There were question marks if doing this would have an impact on turnaround times, but after a trial it was rolled out network wide. It now also adds revenue to the bottom line that to a higher take up of people purchasing seats than people taking up the ‘Speedy Boarding’ offer.

More recent changes have included a ‘beefed up’ business offering for regular flyers, and the introduction of a more generous two cabin bag allowance for easyJet Plus customers. The constant creation of routes from primary airports have really helped the business market, along with a more business-like and professional branding.

So well received has this new, more ‘premium’ push by easyJet that Ryanair has started copying those features. Under the ‘Always Getting Better’ plan they aim to shed themselves of the cheap and nasty airline of old to one which is cheap and cheerful. Like easyJet, Ryanair has reintroduced allocated seating on all its flights, and has a two cabin bag allowance throughout the aircraft, although the larger bags are limited to 90 per flight.

Following a change of philosophy through the winter, Ryanair started flying more through the usually unpopular winter months. These were not new routes, but beefing up schedules on routes which may appeal to business like London to Madrid, Barcelona, Rome, Milan and Athens. A push into primary airports like Barcelona El Prat, Rome Fiumicino, Brussels and Cologne have shown the commitment to this. A better website and digital offering is set to revolutionise how we book air travel bringing Ryanair back to the fore once again.

That takes us to the kings of central Europe, Wizzair. Today, the 19th May is their 11th anniversary which signals a new direction for the airline which brings them now in line with the two dominates in European point to point air travel. Wizzair has really grown with the migration within Europe since the borders have been relaxed, especially within Poland, Romania and Hungary.

Wizzair has long been the poor relation to the two, having only been created 11 years ago, well behind the curve of the established low cost carriers. It really went along the lines of the Ryanair model, connecting secondary or even teriarty airport, with a very low cost model often referred to as the ‘ULCC – Ultra Low Cost Airline’. It has even started charging for taking luggage onboard the aircraft, following the model seen in America by Sprint.

The 11th birthday is also a watershed moment for the airline, adopting some of the policies from easyJet and Ryanair, along with new branding which reflects a more professional approach.

In a press statement today, the airline said, “In its first 11 years, the airline has carried 90 million passengers, grown from a new airline platform to 59 aircraft with more than 380 routes in 38 countries. Focused on customer care since the outset, Wizz Air is also announcing a range of new enhancements aiming for a better customer experience.

“WIZZ undertook an initiative to rejuvenate its brand over the last few months and the launch of today’s refreshed brand and livery demonstrates the airlines’ continued commitment to provide a positive experience for its customers. The WIZZ brand now has a fresh, more vibrant, sophisticated look and feel and some of the initiatives being implemented.

József Váradi, Wizz Air Chief Executive, said: Over the course of the last decade, Wizz Air has had significant success in revolutionising an entire industry, and we have exceededour ambition to make reliable and affordable air travel available to everyone in Central and Eastern Europe as we extended operations all across Europe and beyond. The launch of our refreshed brand is another one of our many measures to constantly improve passengers’ travel experience. We are very excited to launch our new livery on both the A320 and our new A321. We remain focused on developing our pan-European network of routes and look forward to welcoming returning and new customers on board.”

On the other hand we have seen the larger, what we would now describe as legacy carriers going the other way. British Airways has taken the hold bag off its cheaper European fares, along with charging for seats across its entire network, unless you check in 24 hours before departure. Lufthansa is in the depths of relaunching their low-cost airline as Eurowings, which will see them also compete in the low-cost long haul market along with Condor in Germany, and also Norwegian and Thomas Cook in other markets in Europe.

A good old fashioned message of giving the customer what they want at a decent price is always going to win over the even sharpest of critics, and sometimes revisiting the past is key to success in the future.

Image via Bjorn

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Airlines

La Compagnie – Means Business

There are sometimes when you feel like you have deja vu. Now is one of those times. The concept of a long haul airline, providing a low cost business class product across the Atlantic is one that we have seen before, and fail.

La Compagnie though comes with something different, the benefit of hindsight and the backing of some of the best people in the business, with inspiration from some the very best within the industry. The airline started a new route this week, flying from Luton airport in Bedfordshire to Newark, just outside of New York, the second route in its portfolio after a successful Paris launch.

The airline is the brainchild of Frantz Yvelin, who is no stranger to the world of ’boutique airlines’ having founded L’Avion, an airline of a similar concept which was acquired by British Airways and merged into their ‘Openskies’ project, which also flies out of Paris to the US.

Using money that he got from the Openskies sale, Yvelin went on to create what was then called DreamJet, the working title before it became La Compagnie he found talent from all areas of aviation including Air Canada and Jet Airways. Using inspiration from Michael O’Leary at Ryanair, he has created a new style airline with just 74 seats onboard a 757-200, which in chart configuration would seat over 230 to give an affordable business class product aimed squarely at small to medium sized companies, and those on leisure trips looking for a nicer way of travelling.

We have been here before though. The last time that we saw low cost business class only airlines fly all three of them failed in close succession. Silverjet in fact flew the very same route that La Compagnie will be flying, Luton to Newark. There are differences though. Silverjet aimed to do things differently and had their own private terminal at Luton airport, while La Compagnie will be sharing the main terminal, although guests will have access to the Aspire lounge before the flight. SilverJet also flew the much larger 767-200 catering for 100 guest onboard their aircraft, with just 74 onboard the 757 of La Compagnie.

It failed though in the recession with the reduction of travellers combined with the high fuel price which put to an end for all the independent low cost business class only airlines at the time in the UK. Only British Airways was able to make the concept work bringin back the BA1 callsign for a business class only service from London City Airport on A318 aircradft which need a stopopver in Shannon. Although that doesn’t sound great it does mean that you preclear US customs in Ireland saving time on the arrival.

Time will only tell if this can work, history says that it cant.

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Airlines

When easyJet does business, British Airways does leisure…

Since deregulation of airlines in the mid 90’s, the ‘new’ airlines have often been as second rate, a different kind of animal that the established carriers everyone became reliant upon. However, the tide is turning and the budget carriers are now becoming the animal in the industry.

Ryanair has been the pioneer in flying you to the places you don’t really want to fly to, many miles from your final destination point. Frankfurt Hahn, Dusseldorf Weeze, Barcelona Gerona, Venice Treviso, Glasgow Prestwick are all great examples of airports sometimes 100’s of kilometres away from the advertised city. At the same time other airlines were popping up, but finding it difficult to capture the business clientele with a ‘no frills’ and basic service, just getting you to the destination you needed to get to. easyJet even in the early days offered services to Belfast, Edinburgh, Glasgow and Amsterdam, although sometimes had a reputation that it was just for stag and hen parties.

They started then muscling in on the ‘charter’ airlines, fitting the niche of high volume traffic to leisure destinations at first in Spain such as Malaga, Alicante and Palma, before branching out to Italy, Portugal, Malta, Croatia, Greece and Turkey. This has been the mainstay of low cost traffic over the last 15 years, but now the tide is starting to turn, and these former budget options are gaining ground on business traffic with a softer and more approachable attitude.

easyJet started the ball rolling with allocated seating, as well as a more business friendly options such as appearing on GDS systems and easy to chance flight reservations, which are helpful when arriving to an airport early. Ryanair followed this summer, going down the same paths as easyJet did with the allocated seating, more business friendly routes, appearing on GDS systems and combine it with a less harsh approach. Starting with it’s key bases, in the case of easyJet that is London Gatwick, Milan Malpensa and Paris Charles de Gaulle the schedules have been designed to appeal to the business traveller, with multiple rotations available per day – Barcelona, Madrid, Amsterdam are all good examples, with further important European links such as Brussels and Strasbourg also linked to the UK capitol. Ryanair has also gone down a similar path in Dublin and London Stansted, their two biggest bases fleshing out the rotations to primary airports – again Barcelona being popular, but also strengthening the ties to Ireland, Rome, Athens and Scotland.

It isn’t to say that the two of them are moving away from leisure traffic, they are just reducing their reliance on it. Having more business traffic through the winter months will help utilise otherwise empty aircraft flying around the European skies. Building where it makes sense on leisure traffic seems to be the name of the game – especially noticeable in the Greek market which is only available through the summer months.

British Airways has always been the king at Heathrow, linking to all the major capitals of Europe with multiple frequencies. Strong in Spain thanks to the partnership with Iberia, but also Nice, Paris, Frankfurt, Munich, Hamburg, Stockholm, Copenhagen, Oslo, Athens, Rome, Milan, Vienna, Budapest – all are served from the biggest airport in the UK. Gatwick has historically been the leisure airport. BA used to work with franchise partner GB Airways, who flew to all the usual points in the Med and Canary Islands, before it was sold to easyJet. However, over the last couple of years British Airways has made a comeback to the leisure market and it’s not just from Gatwick.

Heathrow firstly has seen an increase in charter traffic with the likes of Mark Warner and Sardatur acquiring aircraft over the weekend, a quieter time for traffic for the airline. This has led them to launch their own services that mainly cover ‘upmarket’ destinations such as Santorini, Mykonos, Ibiza, Gran Canaria and the recent addition of Krakow which has been timed to perfectly fit the weekend crowd.

The trend can also be seen at Gatwick, with the airline going head to head on the ‘budget’ carries on the traditional leisure routes. Malaga, Faro, Tenerife, Lanzarote, Fuerteventura, Paphos, Naples, Dubrovnik, Malta and next year Funchal, Dalaman, Bodrum and Kos.

So while the likes of easyJet and Ryanair are going after the cost conscious business traveller, British Airways is going after those who want something that is perceived to be nicer when travelling on their own holiday.

The battle is well and truly on. Who will you choose?

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Airlines

British Airways: One Monarch to rule them all

British Airways was once the darling of the UK skies, flying from around the UK to domestic, European and International destinations. Deregulation happened, and the low cost airlines eroded the market for the flag carrier at regional airports retreating to London, and specifically its home hub at London Heathrow.

After years of decline, routes at Gatwick were also restructured, firstly offloading franchise operator GB Airways to easyJet, who did a lot of leisure flying for British Airways, and then outsourcing ground operations to reduce cost to compete with the likes of easyJet who are dominant at Gatwick.

Slowly rebuilding British Airways at Gatwick now has a very leisure orientated route network flying to destinations such as the Canary Islands, Italy, Greece, the Algarve, Southern Spain along with short business and domestic routes such as Jersey, Dublin, Amsterdam and Scotland.

One of British Airways’s challengers at Gatwick is Monarch, who also have a leisure focus programme. Facing another restructure, Monarch has been loosing money for a number of years and new management has been brought in to turn the former holiday airline into a European low cost airline.  Of late, Monarch has been an airline that has lost direction, with having a charter operation, long haul arm as well as having the now dominant scheduled business.

Things are changing though for Monarch, and with the prospect that more funding will not be forthcoming hopes rest on turning things around with a new portfolio of routes, and dropping bases such as East Midlands with a fewer number of aircraft.  A new aircraft order for 30 737 MAX 8 aircraft will kickstart the change for the carrier, changing from a near all Airbus fleet. Fail, and the predators will be circling.

Ok, so how could the two be couple together?  Many have speculated that IAG owned Vueling would make a good substitute to British Airways mainline at Gatwick in a effort to save cost. That hasn’t happened and in fact the airlines actually compete on the London Gatwick to Barcelona route head –to – head.

Both British Airways and Monarch have a similar route portfolio at Gatwick, both operating to Tenerife, Lanzarote, Fuerteventura, Faro, Malaga, Alicante, Ibiza, Palma, Nice, Barcelona, Venice, Verona, Dubrovnik, Larnaca, Paphos, next year you can add Dalaman and Heraklion to that list. With such a cross over, the slots would be a very lucrative win for British Airways, fighting back against easyJet, now the dominant airline at Gatwick.

The slots could then be used to counter the fight posed by easyJet, launching new routes currently flown by Monarch like Funchal, Sharm El Sheikh and Antalya, strengthening current schedules and new destinations.

These could also be snapped up by other airlines, including easyJet who would have an even more safe number one position at Gatwick, or Norwegian who’s footprint is growing in the UK market along with its long haul operation.

I would suggest the big plan should be different though, the boldest since British Airways set up GO, their low cost airline and acquire Monarch Airlines.

Gatwick has a different market to Heathrow, British Airways are clearly targeting the leisure traveller, and have been pioneers in cost reducing initiatives such as charging for bags and seat reservation charges.  As these have worked at Gatwick, they have infiltrated the route network at Heathrow bringing the same benefits to the consumer.

But what if Gatwick was different, and was set out on it’s own plan, on a similar way GO was 15 years ago. Firstly the British Airways name would disappear from short haul from Gatwick, although British Airways would remain the brand for the long haul, but still leisure routes.

Using the heritage of the airline, I would suggest Speedbird as the name, a nod to years gone past, with a new branding featuring the old BOAC emblem. You could keep the British AIrways uniform, along with the new interior which will be featured in the refurbished aircraft coming to the airline at the end of the year.

A stronger airline at Gatwick would help their fight against easyJet and Norwegian, and put the airline on an equal footing to its rivals. A new route portfolio, including the leisure routes featured now, along with new routes that have both a business and leisure focus like Lisbon, Munich, Prague along with seasonal routes such as Mykonos, Santorini, Kefalonia, Bastia, Olbia.

I’m surprised that the British Airways brand has survived so long at Gatwick, and not morphed into the low cost airline it should be.