Crossing the Atlantic can be cruel. Airlines, like comedians, should beware

By: Gill Upton @gillupton1
Published: Thursday, March 5, 2015 - 15:01 GMT Jump to Comments

The north Atlantic crossing is lucrative and, in travel branding terms, sexy. So it has always attracted new entrants with innovative ideas in how to make a profit in a hyper-competitive market place.

What do a retired Norwegian airforce pilot and a French former commercial pilot have in common? They are both shaking up the normally staid aviation world with cut-price flights across the competitive transatlantic route.

As one of the most competitive routes globally and effectively serviced by too few airlines, ticket prices remain high. Consider that flying business class is a luxury these days, as a fully flexible Business Class ticket on the London-New York route, for example, can set back a corporation some £6,000.

It is one reason why many cash-strapped business travellers now travel in economy class and why many company travel policies dictate that business class can only be flown on journeys over eight hours. Some more draconian policies dictate 12 hours.

However, two entrepreneurs have entered the fray, which will bring much lower prices in both classes of travel.

Frenchman Franz Yvelin will launch London Luton-New York Newark flights from April 24th on his all business-class airline La Compagnie, with return ticket prices from £1,500.

“Our yield management system lets us stay at least two times cheaper than the others,” says Yvelin. “We will make business class more attractive to more people. We’re doing what EasyJet did to short-haul.”

La Compagnie’s NY service runs four times weekly, rising to six weekly flights by the end of May and to a daily service by the end of the summer. Two Boeing 757-200 aircraft will be utilized on the route, configured with 74 seats, each of which reclines to 180 degrees.

Service on the ground includes Fast Track access, a shared lounge in NY (with El Al), and a lounge at Luton airport. Once airborne, the in-flight service includes menus designed by a Michelin-starred chef, and an entertainment system with 12-inch touch screens, full HD and mood lighting in the cabin. The next development will be wifi. Crew are kitted out in black and white designer uniforms.

“It’s similar to other products and there is a good level of comfort; it’s a no-brainer,” says Yvelin, a former pilot until at the age of 28 when he founded L’Avion, which was sold to BA two years later. The airline is 95% privately owned by European and US entrepreneurs, including Yvelin.

The airline launched 18 months ago in France with an all business-class service on the Paris Charles De Gaulle-New York Newark route. Buoyed by that success, Yvelin believes the London route will do equally well.

La Compagnie is up against stiff competition by the major players, namely the joint ventures of Delta/Virgin and British Airways/American Airlines, but Yvelin is unfazed by the competition.

“Passengers are not benefitting from these alliances. They buy a ticket on Virgin but fly Delta and it’s not the same product. For us, it’s easy as we have one class and one price,” he says.

Creating cheaper transatlantic flights in economy class is former Norwegian Royal Air Force pilot Bjorn Kjos.

As the sextagenarian CEO of Norwegian Air Shuttle, the airline began with short-haul routes 15 years ago and expanded into long-haul last summer, with London Gatwick to New York/Fort Lauderdale/Los Angeles flights. Lead-in fares are £150 one-way, which is at least 50% cheaper than its competitors.

“I’m going for the masses of people, on low-cost and on the newest aircraft,” he explains. Norwegian’s Boeing 787 Dreamliner aircraft used on this route come with 20% more fuel efficiency than its predecessor, the 767. They also boast lower cabin pressure that will help alleviate jetlag.

Norwegian’s business model is unconventional as it has moved its long-haul operations from Norway to Ireland, is basing some of its pilots and crew in Bangkok, and has hired 300 flight attendants in the United States.

The US department of transportation (DOT) has yet to approve the application from Norwegian’s Irish subsidiary for a foreign air carrier permit so it can expand services between Europe and the US. It has been pending for a year.

The delay is thought to be due to “vigorous opposition” from competitor airlines and unions, says the airline. The subsidiary, Norwegian Air International (NAI), has already received its Irish Air Operator’s certificates.

Having pitted Norwegian against SAS on domestic routes in Norway in its early days, Kjos is ready to take on the stiff competition - but taking on the US DOT is another matter. Some 50 NAI crew delivered letters to the Obama administration in Washington today (February 18th) urging the swift approval of the application.

“It has taken far too long for DOT to fulfil its legal responsibility and approve NAIs application,” he says. “The transatlantic market has far too long been dominated by alliances. Our vision is that ‘Everyone should afford to fly'.”

For the business traveller, such fighting talk can only mean improved ticket prices, which keeps every financial director happy.

The views and opinions expressed in this article are those of the author(s) and do not necessarily reflect the official policy or position of The Information Daily, its parent company or any associated businesses.



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