New planes, opening of Nice-New York, addition of frequencies from Paris, economic equilibrium in the line of sight, the year 2019 promises to be crucial for the French company 100% business class. Retail magazine with Jean-Charles Perino, its commercial and marketing director.
QDT: The year 2019 of The Company will be a year of major projects. And not least, no?
Jean-Charles Perino : 2019 is going to be a pivotal year for us. With the arrival in the fleet of 2 Airbus A321 NEO that we ordered several months ago. And also with the launch of a seasonal road between Nice and New York. Regarding the new devices, without returning to the business class aspect of last generation – perfectly flat bed, WiFi access for all customers, entertainment system and service reinvented – I emphasize that it Above all, it is always a 100% business class product. It is our alpha and omega, our specialty, the point on which we have focused since our beginnings: to offer a business class at the best price. The first A321 NEO will arrive in the fleet in May and will be online from June 6, slightly different from our forecast program. We decided to keep Nice starting on May 5th, 2019 and launch the first flight in A321 Neo on June 6th.
What changes on the product side?
We move to 76 seats convertible into perfectly flat beds in a connected plane for all. We will, with our partner Viasat, offer free access to a Wi-Fi service last generation. Passengers will be able to stream at 10,000 meters altitude.
In the long term the fleet will be composed of two Airbus A321 Neo and a Boeing B757?
In the long run it is obvious that the A321 Neo is for us a real choice of positioning. Concretely in 2019 we will release a Boeing, so switch to three planes: a B757 and two A321. But the question of the homogenization of the fleet will arise in the coming months. The idea is to continue development in A321 Neo. The B757 will allow us to make the connection, in particular to operate the Nice-New York route and to develop the charter activity. Alongside this, we will also launch between June and September, and at specific dates corresponding to the evolution of demand, a 3e flight between Paris and New York.
Why did you choose Nice as 2e hexagonal starting point?
Nice, between the United States and France, is the 2e destination in terms of total traffic. Both in direct traffic but also in indirect traffic via major European hubs. It is a market that weighs roughly 200,000 passengers in the summer period: 50% in Nice-New York and 50% via the hubs. We believe that offering business class at the best price on this route offers real development opportunities. This is the bet we make by putting up to 5 flights a week between May and September. With two months of marketing behind us, we realize that there is a strong appetite for the US market for the Côte d'Azur with 70% of sales. We are rather pleasantly surprised. But for the people of Nice who want to go to New York, it's also more choice. So we also had to stimulate the market.
Especially since Nice airport, it's not only Nice …
Yes it is the French Riviera in the broad sense, from Monaco to Provence.
You have considered partnerships with local operators?
We are indeed in advanced discussions with Monacair, which operates by helicopter from the Nice airport to offer our customers New York-Monaco.
As we can see, 2019 is going to be a "big piece" to digest …
It will be a fundamental year. It arrives at the right moment of our development, after a year 2018 which saw a clear improvement of our performance. In 2018 we strengthened our position on the Paris-New York route as we carried 63,500 passengers, 12% more than the previous year, and we reached an average load factor of around 80%. In financial terms, apart from the fuel effect that affected everyone, we were in line with what we planned to do. It has been a year of transition that puts us in a position to switch to balance in the year 2019.
What about the competitive environment?
We have seen new players arrive, and a violent battle in the leisure market on the Paris-New York axis. With our somewhat hybrid positioning, 2/3 of corporate clients and 1/3 of leisure customers, we have been somewhat protected. Our 100% business class offer at the best price puts us safe. Unlike the traditional companies that competition requires to be hyper-aggressive in the eco class and therefore can not sacrifice too much revenue they get from their business class.
Since we are talking about the economic environment, did you feel a "yellow vests" effect?
In terms of demand the market is clearly a little compressed. Still, the trend remains positive for the whole of 2019, despite this impact both in France with the wait but also in the United States with a lot of questions about the situation in France.
One of the big projects of 2018 was your move to Orly?
The opportunity we seized to be able to operate our flights from Orly has changed the perception of the company and also boosted its development. At the same time by the appetence of the customers for this airport, but also because of its opening on the whole of France and Europe via a certain number of operators. This allowed us to develop in the "self connecting" segment.
This is also one of the great topics of these last months …
This is a very interesting subject because it was the consumers who made it emerge. The self connecting is ultimately to create the best value of travel between a point A and a point B. The customer has the tools and thinks to have the ability to find alternative solutions to those – more expensive – which are proposed to him. That's why he's going to take a company A to, for example, fly from Toulouse to Paris and fly with us to New York. This market has grown and the companies have responded to this request, including Easyjet which was a forerunner and of which we are partners in the framework of "Worldwide by Easyjet". Our switch to Orly allowed us to significantly increase the number of passengers coming from this segment. There is a real demand.