Have Flybe missed an opportunity?

22 March 2022

Flybe have announced its first routes - 23 in total, operating from 16 airports including 12 in the United Kingdom. Belfast City and Birmingham are its initial bases and Belfast has over half of the routes served. However, is there a missed opportunity for Flybe?

Based on the initial new routes, Flybe will face competition on 16 of the 23 routes including 11 out of 12 serving Belfast City. Of the 19 that are to operate year round, just 3 do not face any competition:

Amsterdam - East Midlands
Belfast City - East Midlands

Leeds/Bradford - London Heathrow

Here lies problem number 1 for Flybe - they are targeting routes already served.

There is a benefit to this strategy, the market is known, customers are already flying the routes and Flybe can enter with attractive fares to shift consumers from one airline to another. Yet, serving routes with an existing carrier is unlikely to bring deals with airports for better fees. After all, why would airports subsidise a second carrier on a route when the first one has operated through COVID and stayed loyal with the airport? And there's found problem number 2 - loyalty.

Flybe had been operating for around 40 years before its collapse in 2020, its brand was well known and had a large presence across the United Kingdom and Europe - controlling key markets including Belfast City and Southampton. When they collapsed in March 2020, it left some consumers out of pocket and airports scrambling for lost revenue and customers. COVID lead to even more falling passengers and airports struggled to keep afloat. During 2020 and 2021, several airlines announced new routes - filling the void of many lost Flybe routes including British Airways, easyJet and Loganair among others. These airlines operated during the harshest travel climate in modern times and became brands known to consumers. Importantly, they helped airports stay open and improved viability as we enter more positive travel times.

Flybe now plan to enter where they left off - coming in and taking back routes. Times however has changed. Domestic flying is less popular due to economic and environmental reasons. Consumers are used to other airlines flying their routes and services during COVID and have switched loyalties; and airports have new relationships and deals, moving away from a one airport monopoly into airports with a multitude of airlines. This provides a different climate for Flybe to enter.

So what is the missed opportunity?

Flybe were able to keep hold of slots at many major airports including London Heathrow and Amsterdam Schiphol. These are lucrative and if not flown this upcoming summer, would be lost and the chances of regaining the slots difficult. Yet, at London Heathrow - the airline is planning to use its 7 daily slots on 3 routes: Amsterdam (2), Belfast City (2) and Leeds/Bradford (2) whilst at Amsterdam, Flybe are planning to use its 5 daily slots on 4 routes: Belfast City (1), Birmingham (1), East Midlands (1) and London Heathrow (2). It is clear that Flybe doesn't want to lose its slots - but operating routes with high competition could be a risky and expensive strategy. For instance, there are approximately 19 daily flights between British Airways and KLM on the London Heathrow - Amsterdam route, yet Flybe are to enter with just 2 daily flights. The existing carriers can feed their network, have economies of scales at their hubs and offer better timings for consumers. It is clear Flybe are operating the route to use key slots at both airports but this lack of imagination and lack of targeting unserved and underserved routes is a key missed opportunity to regain their status as a key regional player.

Southampton is another missed opportunity. The airport was key in Flybe's previous venture in connecting the UK with France. Most of the UK-France market requires the use of the plane due to journey times, compared to inter-GB flights which have rail as an alternative. Yet, Flybe are planning just 2 summer seasonal routes from Southampton (Avignon and Toulon) and one domestic route to Southampton (Belfast City). Of Southampton's 25 busiest routes in 2019, 8 were in France and 5 remain unserved. With the lack of alternatives, flying these routes would have meant not competing on yield against established carriers one existing routes and would have allowed Flybe to grow its brand presence in a wider region.

The final missed opportunity is not launching earlier. Emerald Airlines announced 6 routes from Belfast City in March 2022, with 5 of the 6 routes proposed to be served by Flybe. Emerald Airlines, under the Aer Lingus Regional brand, would have the benefit of a well known and established brand and longer lead in time before the first flights. The airline will also plan to increase frequencies and routes in the coming weeks and months, giving Flybe even greater competition. Not being ahead of your competitors and being seen to be unimaginative by mimicking routes is not a good start for an airline looking to rejuvenate.

To conclude...

I am pleased so many people will be able to get their jobs back following the collapse of Flybe two years ago, however, times are very different. Increased competition, lower economies of scale and a customer base with less loyalty to Flybe are key barriers for Flybe and it is not a certainty that the airline will succeed. One thing is for certain though, we are about to see some great prices for consumers this coming summer.