Jim French (Chairman and CEO of Flybe)

Could you please present Flybe to our readers? What are your specificities compared to other European LCCs? What do you do better than your competitors?

Flybe is now the biggest regional airline in Europe, flying 162 routes from 53 European airports. Having acquired British Airways’ point to point regional carrier, BA Connect earlier this year, we expect to carry 7.5 million passengers in 2007 and 10 million next year.
What differentiates us compared to other LCC’s is our business model. We fly region to region rather than capital to capital, with a focus on domestic, European City and French regional flying. Our fleet of Bombardier Q400 and Embraer 195 are modern, environmentally sensitive aircraft that are the right aircraft for the right route.
In terms of what we do better than our competitors, I would say three things: Firstly, the quality of our domestic European city coverage, secondly we are number 1 in terms of ancillary revenues, averaging more than £8.00 per passenger and thirdly the fact we carry 40% business passengers.
We are innovators. We were the first airline in the world to introduced baggage charging, bringing complete transparency to what passengers pay. We in effect re-wrote the low-cost rulebook by introducing a ticket that isn’t simply low-cost but that allows the traveller to select a package of additional elements. And recently (see question 3 below) we were the world’s first airline to introduce an eco-labelling scheme for the aircraft we, and others, fly.

How do you analyze the competition in Europe with other LCCs? Which LCC is for you the main competitor? Today? In the coming years?   

All competition, whether low cost or traditional, is tough. We barely cross schedules with Ryanair and only marginally with Easyjet. Our main competitors are BMI regional and, as we expand in Germany, Lufthansa.

What is your position on environmental issues concerning European LCCs?    
      
We support the view that human activity, including air travel, is contributing to global climate change and we accept that, as one of Europe’s largest regional airlines, we have a responsibility to reduce the carbon emissions produced by our aircraft. As a regional airline, we take our take our responsibility to the communities we serve very seriously both in terms of the economic growth we stimulate and the effect upon the local environment of the communities we serve. That’s why we’ve spent more than $ 3billion on the market’s most fuel efficient and emission efficient aircraft technology.
And to give passengers as much information as possible about the impact their flight has on the local and global environment, we’ve launched an ecolabelling scheme.  The label, modelled on those used in the sale of white goods like fridges, microwaves and washing machines, shows a full range of environmental indicators per aircraft. More information is available at www.flybe.com/environment

The European Low cost carriers market has reached a certain maturity which leads to its consolidation.  During this transition, what are, for you, the greatest threats to the European Low cost carriers? Fuel rising? Overcapacity? Evolution of airports? Regulation?...            
                                                                
Our biggest challenges at the moment are the regulators undermining de-regulation, the effective airport monopoly operated by BAA and the ever-increasing prices for airport charges.

What are your expansion projects for the coming year(s)?                                

Further growth in the UK and overseas. We expect to fly 10 million passengers a year by the end of 2010 and plan to introduce even more new routes to Europe.

Many LCCs look after extra-revenues to offset the low price of their tickets. What are the projects of Flybe in terms of Extra-revenues?        
     
We are world leaders in ancillary revenues, with the highest per passenger revenue in the business. As I said earlier, we are proud of being innovators. Our baggage charging policy has been imitated by low-cost and traditional alike and our advanced seat assignment has likewise been a big success. We were also the first low cost airline to introduce a frequent flyer programme, Rewards4All which is open to all passengers.

Do you believe that consolidation of the market will lead to 2-3 main LCCs in Europe, or do you think there will always be many LCCs on niche markets?

There will be consolidation, however we have created a defendable niche, and Flybe will be one of the main 2 or 3, serving a domestic and European city market.

Are you worried about the shortage of pilots and crew hitting LCC market?

Yes, but we have recently launched a successful recruitment campaign for pilots and crew and received more than 1000 applications, so clearly there is confidence out there about Flybe’s future.

What are the options for Flybe to transform its business model in order to make more costs savings?

Through the acquisition of BA Connect, we made a combined saving of £40million. We are always looking to change and develop the business model. For example, just five years ago, in common with other airlines, we had a caterer for each airport, thereby duplicating our efforts. That has all changed with a single, central distribution centre, saving time and money and is now the norm for the industry.
We have prospered because we’ve been able to drive costs down and keep them down over the last few years and we’re pretty confident that our business model is in good shape.