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Thursday, January 31, 2013

Maastricht Airlines and FlyNonstop start-ups target underserved niches in Europe

Two smaller European communities will soon see the launch of airlines which will try to capture their own niches in the crowded European sky. Both appear to be well financially supported, but might fail simply due to insufficient size of their markets.

Maastricht Airlines goes for business travelers which previously used larger nearby airports
Maastricht Airlines has chosen to use Maastricht/Aachen Airport as its base, which currently sees scheduled service only from Ryanair and Transavia. The airline is set to launch in March as an FSC. Its growth plans are not overly ambitious, and it intends to initially attract both leisure and business passengers traveling to larger European cities. The start-up hopes that travelers from the region will now use their new local airline, instead of going through Amsterdam or other nearby gateways in Germany and Belgium.

Amsterdam will initially be Maastricht Airlines' most frequently served destination as it will see four daily services on weekdays and daily on weekends. The start-up is correct at serving Amsterdam with such a high frequency, but the fact that not even KLM with its large hub in Amsterdam serves the route could signal that the city-pair might not be viable, mainly due to ground transportation. Berlin Tegel and Munich will also be launched in the early phase, with the former operated daily and the latter double-daily, except on weekends when the two will be flown only on Sunday.

PH-LXK Fokker 50 @ Maastricht 12-May-2010 by Johan Hetebrij
The airline will launch on 25 March serving Amsterdam, followed by the inauguration of Berlin and Munich a day later. All three destinations are open for bookings since mid-January. In 2014, the new carrier intends to expand to Copenhagen, London and Paris.

The start-up recognizes that competition from Ryanair could be tough, so it will therefore try to be specially appealing to business travelers. The airline will offer four fare levels named Super Saver, Economy Basic, Economy Flex and Business. Some Dutch municipalities will financially support the start-up.

Ryanair established a base at Maastricht/Aachen in December 2012, with one based aircraft serving more than 10 routes, mainly catering to leisure travelers. Transavia is currently only accepting bookings for a route to Heraklion which will be launched in May. Maastricht Airlines will not compete on any of routes it announced so far.

Maastricht Airlines will launch with a fleet of two Fokker 50 turboprops, which are inexpensive to acquire but aging and certainly not the most comfortable aircraft on the market, particularly if compared to Ryanair's young and modern Boeing 737 jets. Still, Fokker 50s should ensure low costs, which is very important for a young airline. For now, the airline intends to remain loyal to Fokker 50s and plans to operate six of the type by 2015, calling itself a true Dutch airline as it will operate aircraft manufactured in the Netherlands. The aircraft are leased, but more details were not revealed.

Maastricht Airlines' founder and CEO Hamid Kerboua has experience in airline industry. He is the founder of Dutch lessor Denim Air and has been involved with a number of other companies connected to the industry, including now defunct charter carrier Amsterdam Airlines.

FlyNonstop sees enough demand for leisure network from small Norwegian municipality
Norway is also anticipating the launch of a carrier serving a small market. FlyNonstop will launch from Kristiansand municipality's airport, a small region population-wise in Southern Norway, as an FSC targeting mostly leisure traffic. It will offer two fare levels.

FlyNonstop will inaugurate its first route exactly a month after Maastricht Airlines, on 25 April. In its early phase, it will serve eight cities: Barcelona, Berlin TXL, Dubrovnik, London LCY, Nice, Palma de Mallorca, Paris CDG and Parma. All of them will be served two times weekly, except for London LCY which will see a maximum of five weekly rotations.

Only one wet-leased Embraer 190 regional jet will be in FlyNonstop's fleet when it starts. The start-up hopes that the E-jet will allow it to keep the network unchanged during the year, despite seasonal oscillations in demand. Interestingly, there will be two companies providing the aircraft, one lessor and the other operator, which could be more expensive and complex than tasking a single company.

Many observers fear that there will simply not be enough demand for the airline to stay in business. Its management is aware of the challenge, but says that market research indicated there was enough demand for nonstop flights. Kristiansand already sees a few services, mainly to Scandinavian destinations, but none to those announced by FlyNonstop.

Daniel Lundber, FlyNonstop's CEO is also the CEO of a Swedish consultancy, and was on top positions at now defunct charter carrier Viking Airlines, start-up Swedish Moose which never took off, and lessor Air Sweden Aviation. FlyNonstop is financially supported by its owner Espen Hennig-Olsen, a local businessman owning an ice cream company.