Airlines That Recently Took to The Skies
Featured Photo – An Air Belgium Airbus A340-300 – Photo Courtesy of Air Belgium
While there haven’t been that many startup airlines over the past few years that have made huge headlines, there have been a few airlines that took to the skies over the past few years. In this article, I will list select airlines that took to the skies in both 2017 and 2018, will explain their business model, and will evaluate them.
Air Belgium
Parent Company: N/A
Airline Type: Tourism/Full Service
Hub(s): Brussels South Charleroi Airport
Country: Belgium
Air Belgium actually was an airline that existed from 1979 to 2000 and operated leisure flights within Europe out of Belgium. It was then re-founded in 2016 (with no help from any other airline) with the goal of connecting Belgium to China. Its business model is to take tourists (primarily Chinese) from China to Brussels. Air Belgium can’t really do connecting traffic because they are not partnering with any airline yet. In June 2018, Air Belgium finally got off the ground and started their first flight from Brussels to Hong Kong. That’s Brussels South Charleroi Airport, not Brussels Airport; Charleroi Airport is over an hour away from Brussels and is mostly served by low cost carriers such as Ryanair. Air Belgium currently does not operate on any other routes besides a few flights for Air France to West Africa. Air Belgium flies four ex-Finnair Airbus A340-300s which were all delivered this year. It features flat bed seats in business class, premium economy, and economy class – all with free in-flight entertainment (IFE). Also, Air Belgium wants to fly to more Chinese destinations such as Beijing, Shanghai, or Xi’an in the near future.
I really can’t see them making that much money in the future with this business model, as Cathay also flies from Brussels to Hong Kong and Hainan Airlines flies from Brussels to Beijing, Shanghai, and Shenzhen from the much more practical Brussels Airport, especially since their flights have not been very full. Air Belgium has also expressed interest in flying to the United States, but I don’t know whether that will work out for them, since there already are a lot of flights from Belgium to the US.
Probability That They Will Last 10 Years – 30% – I really can’t see them surviving that much longer with a business model that involves not having airline partners, flying from a distant airport to a destination half way around the world, and only relying on tourism – that’s not how any airline makes a profit. If they massively restructure and become something like Hi-Fly where they lease planes to other airlines in the short term like they did with Air France, then I think they could probably survive.
Air Italy
Parent Company: Qatar Airways
Airline Type: Full Service
Hub(s): Milan-Malpensa Airport
Country: Italy
Air Italy actually isn’t a new airline – it just existed under the name Meridiana for a number of years. The reason I am including them is because they just massively restructured the airline under the influence of Qatar Airways. They went one day to another from an airline with super old planes with very dated cabins to an airline with aspirations to become the next flag carrier of Italy with 30 Dreamliners on order. On February 28, 2018, Qatar Airways announced that they bought a large stake in Air Italy, and that they would give Air Italy new planes to become a competitive airline. The funny thing is that Air Italy until 2018 was actually a subsidiary of Meridiana that ran Meridana’s planes. Air Italy currently is retiring all of their ex Meridiana 767s and 737s in favor of new 737 MAXs and A330s from Qatar. Qatar Airways also will give Air Italy a whopping thirty 787-8s starting in 2019. I would find it really weird for Air Italy to have more 787s than 737s – Air Italy will probably order some more 737s in the near future. Qatar’s plan is to grow Air Italy to try and make Alitalia insolvent so Qatar will also have the leading airline in Italy. I really do wonder what Qatar thinks they can do differently than Alitalia to make Air Italy profitable – Etihad couldn’t make Alitalia profitable with anything they did!
Probability That They Will Last 10 Years – 80% – With so many planes on order and with the guidance of Qatar Airways, I really doubt that Air Italy will die anytime soon – if anything, Alitalia would die, not Air Italy due to their harsh financial situation. On the other hand, if Alitalia is very unprofitable, I can’t imagine an airline with a very similar business model (operating as a full service airline out of Milan and Rome) could be profitable.
Joon
Airline Type: Low Cost(ish) – Aimed at Millennials
Hub(s): Charles de Gaulle Airport
Country: France
In December 2017, Air France decided to start a subsidiary which very specifically is aimed at millennials. What I mean by it targeting millennial is that Air France marketed Joon as being more high tech, having healthier food (for purchase), cabin crew that wears white sneakers and a casual outfit, and not being the traditional so called luxury Air France. The thing is, they really didn’t start any new routes – they only took over some of Air France’s routes such as Paris to Berlin, Porto, or Cape Town which Air France thinks more young adults take. It’s also not really a low cost carrier – the prices are really identical to the prices that a regular Air France ticket costs. So basically, Air France created Joon to appeal more to young adults by focusing on things which Air France thinks millennial stereotypes like and possibly as an excuse to lower wage costs for Joon flight attendants.
Probability That They Will Last 10 Years – 50% – I personally think that this is a brand experiment which Air France thinks appeals to a large group of travelers. However, it is also meant to cut costs and be more profitable by adding charges for meals and by being able to lower wages. Maybe this is the most profitable thing Air France has ever done or maybe it just will be reintegrated into Air France. I am slightly tending on that they will reintegrate into Air France as I doubt that the millennial marketed business model will be profitable in 10 years.
Laudamotion
Parent Company: Ryanair
Airline Type: Low Cost
Hub(s): Berlin Tegel Airport, Dusseldorf Airport, Vienna International Airport
Countries: Germany, Austria
Niki Lauda, the famous Austrian Formula One driver, has created three airlines over the years. The first, Lauda Air (a leisure airline) was bought by Austrian Airlines 2000. The second airline, Niki, founded in 2003, was fully bought by Air Berlin 2011. In 2016, Niki Lauda bought a tiny airline called Amira Air and renamed it Laudamotion. After Air Berlin died, its subsidiary Niki was left without an owner. Laudamotion then bought the airline Niki and transferred some of its planes to Laudamotion and eliminated the Niki brand. Laudamotion’s first flights began in January 2018, using Air Berlin’s and Niki’s former tail and by slapping the Laudamotion name on the fuselage. Just a few months later, Ryanair bough a majority stake in the airline – Laudamotion is now a full subsidiary of Ryanair. A few days ago, Ryanair and Laudamotion announced a new livery (see above) which only has the name Lauda and a tail with an L on it. Now, the airline operates flights to leisure destinations out of Germany and Austria, owned by Ryanair.
Probability That They Will Last 10 Years – 50% – There are two ways to go about thinking whether they will survive: the first is that Ryanair would want to merge the two airlines eventually to consolidate their brand. The other is that they wouldn’t want to – for two reasons. The first is that Laudamotion uses an all Airbus fleet and Ryanair has an all Boeing fleet – so they might not want to merge the fleets. The second reason why they might keep the brand is because they would want to keep the Laudamotion brand as the low cost German and Austrian brand.
Level
Photo Courtesy of Level
Parent Company: IAG (British Airways & Iberia)
Airline Type: Low Cost
Hub(s): Barcelona-El Prat Airport, Paris Orly Airport, Vienna International Airport
Countries: Spain, France, Austria
The airline Level was created in mid 2017 owned by IAG as a low cost airline that flew long haul flights out of Barcelona. IAG is the parent company that owns British Airways, Iberia, Aer Lingus, and Vueling, another low cost carrier which flies mostly from Barcelona. Since then, Level has expanded, starting low cost long haul operations from Paris Orly and short haul flights out of Vienna. Over the next years, Level intends to compete with low cost airlines such as Eurowings in flying to vacation destinations (both short and long haul) out of major European cities which may not have a lot of long haul flights right now.
Probability That They Will Last 10 Years – 90% – The three major European airlines have all created low cost carriers to compete with Ryanair, easyJet, and Norwegian which offer lower fares. I really think that IAG will keep the Level brand to compete with the increasingly low fares which come from low cost carriers.
Swoop
Parent Company: WestJet
Airline Type: Ultra Low Cost
Hub(s): Hamilton International Airport, Edmonton International Airport
Country: Canada
Swoop is an ultra low cost carrier created by Canadian airline WestJet. You may ask: why would low cost carrier WestJet create an ultra low cost airline? Because WestJet is moving away from being a low cost carrier. Within the next few years, WestJet is introducing a real long haul business class with flat bed seats on its upcoming Dreamliners and will introduce a real short haul business class product with recliner seats. So now that WestJet is trying to compete more with Air Canada in terms of service, they decided to create a new ultra low cost carrier. Swoop operates 737s out of Hamilton and Edmonton to both intra Canada destinations and to vacation destinations such as Las Vegas or Florida.
Probability That They Will Last 10 Years – 80% – If WestJet’s business model change to a full service carrier that competes with Air Canada directly goes through, then WestJet will really want and need to keep an ultra low cost carrier to keep prices to leisure destinations highly competitive.
Have you flown on any of these airlines that recently started flying? Share about your experience below!
