Story ID: ATP Flybe
Flybe Says Stronger as Focused Regional Carrier
By: Ian Sheppard
Caption: UK airline has refocused under new French leader and is confident of market position as regional connector.
Word Count: 757
The UK's Flybe has turned its sights to reinforcing its marketing identity since Christine Ourmieres-Widener became CEO in January 2017. “Frankly Flybe has struggled with its identity in recent years and I’m not convinced it thought it was low-cost or something else,” she told the Aviation Club of the UK on June 7. The airline depicted itself as a new low-cost carrier when it became Flybe in 2003. It acquired BA Connect in 2006 and floated on the London Stock Exchange in 2010, but since then it has struggled to stabilize its market position against the ever-growing presence of LCCs such as EasyJet and Ryanair. “Did the plan succeed?” asked Ourmieres-Widener. “Not really; the seat-mile cost of regional aircraft could no beat narrowbodies.”

However, she expressed satisfaction with the airline's operational foundation and optimism that a turnaround would come soon. “Coming into the airline and seeing this, I’m convinced the underlying performance [belies] a fantastic opportunity," she said. "One of the first things was to refocus on being a regional carrier, with low-volume, high-frequency routes focused on communities, and to give connectivity to legacy carriers.” 

The Flybe CEO, who began her career as an aeronautical engineer before joining Air France and eventually leading CityJet when it operated as part of that group, almost immediately recognized that Flybe's fleet composition presented a problem. "After lengthy analysis we decided the [Bombardier] Q400 will stay as the backbone of our fleet; it is cheaper to operate than the jets and our average flight time is 59 minutes,” she said. 

“We will continue to operate a significant number of Embraer 175s on busier routes,” she continued, “but the [Embraer] 195 doesn’t suit our network.” The Exeter-based airline placed a large order for Embraer E-Jets in 2010 with great fanfare, but its re-focus on turboprops dates back to 2014, when it canceled its remaining order for Embraer 175s and leased more Q400s from U.S. airline Republic Airways.

Ourmieres-Widener said from a total aircraft fleet of 85 in May 2017, it will have trimmed that number to around 70 by early 2020 under its current five-year business plan. At present it flies 2019 routes to 41 EU airports.

Asked about the risk of the UK/European regional business would consolidate to the point seen in the U.S., she highlighted the two markets' structural differences. “My personal answer is no as it’s a very different market culturally,” she said. “Local brands [in Europe] still work in certain markets and people can relate to them. But I do see more commercial innovation and consolidation. We have 11 codeshares around the world, [for example], and three franchise partners, one with SAS in Sweden. These are a happy medium and we see growth coming from them.” The European Regions Airline Association (ERA), of which Ourmieres-Widener serves as a board member, promotes a belief that its 50-plus member carriers play a central role in providing capacity to other carriers.

She welcomed the announcement by the UK government earlier in the week that it would approve a third runway at London Heathrow Airport, subject to a vote in Parliament later in June. Ourmieres-Widener called the development a “ray” of hope, and “hugely positive news” for the UK. “We won’t have a better opportunity to get regional connectivity,” added the French national, who for that reason she said Flybe occupies a somewhat unique position in the UK industry.

Turning to regulatory issues, Ourmieres-Widener’s first concern in the UK related to the controversial Air Passenger Duty (APD). “APD is crazy," she said. "It adds £26 ($35) to a round-trip-fare if both [legs eminate] from a UK airport, but rail pays nothing. We are simply killing our own business when the UK is supposed to be showing it is open for business. Let’s start by zero-rating APD and see what it does for domestic air travel.”

However, Regulation 261/2004 on compensation to passengers for delays and cancellations continues to prove a drain on airlines, she said: “€250 compensation on almost every cancellation and long delay on a €70 average fare–three times [as much] is just unfair, and is also creating middlemen marking money out of our industry. The costs are unaffordable and increasingly uncontrollable.” She called on the UK CAA to get tough with the claims industry, and to investigate “whether EU261 has gone too far." 

Overall, her message proved positive, however. “I know [the future] will be exciting and unexpected but the future of the airline industry is unpredictable,” she concluded.