Report On Flybe

[Guest Nova Zemlya]

French speaks language of aviation success

IAIN DEY BUSINESS CORRESPONDENT

FLASHING a grin of dazzlingly white teeth through his perfectly manicured beard, Jim French seems a stereotypical by-product of the once-glamourous airline industry he operates in. But as managing director of middleweight regional airline Flybe, he’s had to come to accept that the lustre has faded and air travel is no longer the elitist concept it used to be.

A little more than a year ago, when we first met, the wily Scotsman dismissed the success of budget rivals as little more than a clever marketing ploy, which had tricked the British public into believing that only low-cost operators could offer low fares. Six months later, he announced his decision to pinch some of those tricks, relaunching his crusty, largely-forgotten, British European operation with its new low-fares, internet-based identity.

In 2002, French admitted that the airline - still owned by the family of the late Blackburn Rovers FC chairman Jack Walker - had come within a hair’s breadth of going bust, losing almost £30 million over the previous two years. Now those losses have been trimmed to £800,000 and break-even is just around the corner. Thanks to a switch towards leisure passengers and a new schedule filled with holiday destinations, bookings are 25 per cent ahead of last year.

To cap it all, French has decided to streamline the airline’s fleet over the next few years, placing a £520m order for 17 new planes, with options on a further 20. "We’ve now got a clarity of purpose in what we’re trying to achieve at Flybe," he says. "Our current fleet is very inefficient in cost terms. Air travellers nowadays have an expectancy to pay £55, £60 a seat on average. If your business is offering seats at £85, or costing £85 a seat, you won’t be in business long." He adds: "We’ll be down, on pure aircraft costings, at about £30 a seat from £37 a seat, which is a hell of a difference."

French insists he’s not trying to become Ryanair. With smaller planes, a retained bias towards regional UK routes and a legacy of existing infrastructure, Flybe’s prices will struggle to fall as low as those of the Irish giant. Ryanair, however, doesn’t fly from Edinburgh or Glasgow to places like Birmingham, London City or Jersey. What’s more, you simply can’t land a Boeing 747 at Florence, for example - one of the European destinations French has targeted for a potential move.

Now that Barbara Cassani’s Go and KLM’s Buzz offshoot have been snapped up by EasyJet and Ryanair respectively, space for a new name has emerged in the low-cost market - which is backed by a £10m a year advertising budget and a new marketing team. "My style of advertising was very traditional," French admits. "They have gone to a very clever structure where you have lost leaders, hero routes and God knows what all. But it’s worked. It really has. We see overnight response to advertising now."

French, who turns 50 this year, moved into the industry as a schoolboy at Ayr Academy, 33 years ago. He landed a part-time job on the ground staff at Prestwick with Scotland’s cheap and cheerful British Caledonian. After being thrown out of a civil engineering course at Strathclyde University for "playing too much first-team rugby", he went full-time and moved up the ladder to a new job at Gatwick. Eight years later he joined Air UK, where he spent six years as a main board director. In 1990 he moved to British European - or Jersey European as it was then known.

Despite his roots, he has no great expansion plans mapped out north of the Border. But any Scottish services British Airways decides to drop may well catch his eye. He’s also coy about the fortunes of ScotAir, the venture he set up with Stagecoach supremo Brian Souter to service London City. Flybe is now just a code-share partner on the service, although he insists it’s still been a huge success for them.

French is planning to concentrate on the battles he can win, picking up the niche services no-one else can make money on. But he doesn’t think that BAA’s ownership of Scotland’s three biggest airports - or its monopoly in the London area - does the air-travelling public any favours. Earlier this week, the government was ordered by a European Court to give up its "golden share" in BAA, in a move that might pave the way for a foreign takeover of the UK’s biggest airport operator.

"If the government is going to step outside the golden share," French states, "they’re going to have to rethink the whole BAA strategy. To have Edinburgh, Glasgow, Aberdeen all owned by one company, without government control, is a very, very dangerous situation."

He wants Scotland’s airports in separate hands. Edinburgh is "near saturation," he says, but Glasgow has spare capacity, as does independently-owned Prestwick. "If they were all different businesses, there would be a lot more pressure to develop what the market wants," he adds.

Although Flybe’s focus is shifting towards overseas holiday spots, it is committed to its regional services - and to picking up more of them. In response to the government’s white paper on aviation, French says that if it is serious about spreading wealth from the south-east of England into the UK’s regions, it will have to put money into air links needed to back that up.

He adds that there would be no point in throwing grants at a company to build a factory in, say Inverness, if you don’t give more cash to improving the air links in and out of the Highland capital.

French believes BAA should get a new runway at Heathrow. "But the first priority for the slots on this runway should be given to services that are no longer run to Heathrow," he says. "For example, Inverness, Dundee - they should both be guaranteed services to Heathrow."

Inside intelligence suggests the government is interested in Flybe’s proposals, French says. And with the relaunch having built the airline’s profile nationally, he now has a stronger voice in the political debate.

But what would Jack Walker, the straight-talking millionaire steel magnate, have made of all this internet, low fares nonsense? He didn’t even take kindly to his planes being used for charter customers. And how would the messiah of Blackburn Rovers have reacted to the decision this week to hand Birmingham City - which narrowly avoided relegation from the English Premiership - a £1.5m sponsorship deal?

"Ah well, JW was a businessman first and foremost and we’re doing this for business reasons," French insists, with a wry smile. "Would he have kicked my head in for the shirt deal? No. He used to kick my head in when I called it Blackpool as opposed to Blackburn - he got a bit upset by that. But he’d be OK with this. John Williams, the chief executive at Blackburn was giving me a rough time over it, but that’s life."

30-second CV

Who else is in the family?

I have a wife and three daughters - two at university and one still at school. They’re passionate about horses.

What type of car do you drive?

For pleasure, a five-litre TVR Chimera, which is real pleasure. For work I’ve an Audi.

Where did you go on your last holiday?

About six weeks ago I went to the Italian Lakes on our new service to Bergamo and it was bloody marvellous. I had six days at Lake Como.

And the great thing is that I took my wife shopping in Milan, as every husband should, but she didn’t find anything. So I left Milan with a great sigh of relief and a full wallet.

What hobbies do you have?

We live right out in the country in Devon, and we’ve a lovely old house which I enjoy working on and we have a garden.

I’m a great believer in counterbalance. The airline industry is like a drug - it’s dynamic, it’s pressurised. I like nothing more at the weekend than to switch off and enjoy the flip side of the coin.

I also do a lot of cycling, walking - enjoying the countryside.

How much do you usually pay for a bottle of wine?

A fiver.

[Guest PortTack]

Fran,

What's the meaning behind your new handle?

Just honestly curious.

[Guest Nova Zemlya]

Awhile back, the Dutch strove to discover the northwest passage over the continental mainland, but got only as far as Nova Zembla, an island.

The crew stuck there were picked off one by one by terrible cold, starvation and hunted by polar bears.

Only a small few survived to return.

If the Dutch had discovered this northwest passage, then very likely we would all be speaking dutch right now, and the history of the commonwealth would have been one of endless European rivalry.

I saw the soviet name for the island a while back, but I think it is mispelled. Can't change it now, oh well.

I see the story of this Island and its discovery to be symbolic of the regional group of employees, because we are being picked off and eaten alive by the mothercorp, and the terrible conditions of the aviation industry.

Of course, if you though it might be something like: "Nova, them lyers" then that's ok too.

:-[

NZ

[Guest M. McRae]

And I thought it had something to do with the planned dumping of nuclear waste there.

"There are several planned projects in the county of Murmansk and Arkhangelsk . According to plans , all solid radioactive waste from the Northern Fleet , Murmansk shipping Company ,Kola Nuclear Power Plant and the shipyards of Severodvinsk that cannot be destructed at incineration plants , are to be transported by ship to a depot on Novaya Zemlya "

http://guevara0.tripod.com/environment/id1.html

[Guest PortTack]

Interesting. You tangle with the best and I'm one who always enjoys your posts.

Cheers,

PT