Medium-haul flights were believed to be the foundation of low-cost airlines, which do multiple round-trips per day, on the same aircraft and with the same crew. FrenchBlue, the first French low-cost long-haul airline and its first very positive quarterly report, is changing this belief.
Due to the opening of borders and economic crises, the 2000s paved the for traditional low-cost airlines, such as Ryanair, Easy Jet, or Transavia. Some even chose to multiply their activities to face competition and became so-called “hybrid” companies, such as XL Airways and Easy Jet. Today, why should idyllic destinations, far away and considered too expensive by many, be the new core of this model?
These new offers compete directly with the regular airline market; the same airlines who for several years explained their prices by many services, an attachment to the loyalty of their customers, and by the destinations they serve. For several years they have tried to align themselves to remain competitive, and are continuously evolving.
However, this evolution may have some unexpected consequences. The merger between XL Airways and La Compagnie is an example of this. News of this merger was widely watched, as most people expected Air France to but out XL airways. Indeed, both companies are considered diametric opposites by their customer target and therefore incompatible. Nevertheless, in view of their similar economic model, and based on their geographical coverage, they complement each other rather well.
But what is especially interesting is that this purchase did not require any cash expenditure. XL Airways, which had been without shareholders for several years, acquired La Compagnie and paid in shares. This way, the shareholders of La Compagnie, whose identity is unknown, became owners of the two operators, without paying a penny. What is even more surprising is that these mysterious shareholders became owners of an economically stable airline while La Compagnie, after 3 years of existence has not yet broken even.
Observers of the merger can only imagine its consequences, especially as they witness the transformation of a new business model. This will inevitably have an impact on the fragile air and tourism market as well. Indeed, XL Airways is also owner of the Tour Operator Héliades, and therefore has priority on those aircraft. Under these conditions and if this model inspires other companies and other investors, what are the possible futures of the regular companies? From the point of view of an aircraft broker it is perhaps the first step towards transatlantic, competitive chartering.
Civil aviation, a vast and complex sector, is composed of many actors, both governmental and private. This sector is governed by international and national laws and the slightest geopolitical changes affect it. The Brexit had a disastrous effect on Easy Jet. Similarly, the CDG Express project threatens Air France and the operator Paris Aéroport. In these conditions, the passenger is king because he has a huge choice and his decisions make the market. Furthermore, it is expected that in 2030, the number of international passengers will double in airports. For industry professionals, this latest data now represents a real economic stake.
The position of an air broker is subject to these variations. Although we are fully integrated into the industry as a specialist intermediary, we must face the constant increase in operators, the expansion of their activities and, above all, the increasing number of competitive offers. Our differences and added values are our expertise, our involvement and our experience of this market. But when a Transatlantic flight is less than 500 €, is that enough?