first_imgBrexit and other uncertainties are not stopping UK regional carrier Flybe from planning an ambitious expansion that takes it beyond Britain and into continental Europe.In August this year, Flybe launched its first two routes not touching its home market:  from Hanover in northern Germany to both Lyon, in France, and Italy’s Milan-Malpensa.It is not planning to replicate the 15 per cent capacity expansion seen in the past financial year but is looking at an increase of 6 per cent. By March next year, it’s fleet will consist of 85 aircraft, 11 more than a year earlier, with 60 Q400s among them.But Flybe hasn’t lowered its ambitions by any means.“We have a desire to be European”, says chief revenue officer Vincent Hodder.  “And there is no better time than now to start this journey into the future.“You have to distinguish between a short-term uncertainty and the long-term success of the Flybe business model.”Hodder says there are currently about 13 million passengers travelling on routes not served by low-cost carriers or with very limited competition on them.“We are a regional airline flying underneath the radar of LCCs, which is a great opportunity,’’ he adds.On a whopping 80 per cent of its 218 routes, serving 75 destinations in ten countries, Flybe flies without any competition.  It faces competition from easyJet on just 10 routesFlybe’s big advantage here is its efficient fleet of  Q400s and it will have 54 at year-end.   The regional carrier is the second biggest operator of the turboprop worldwide and, with just 78 seats, the aircraft enable it to operate a route profitably if it yields 40,000 passengers annually.By contrast, easyJet needs at least 100,000 paying customers per year to profitably operate a route with an Airbus A319.Flybe  estimates 39 million people in Western Europe are currently underserved with regional connectivity.“If we could carry just 10 per cent of that, we could double in size”, calculates Hodder.While this bold vision could be acutely threatened by Brexit, Hodder insists: “I don’t think Brexit will force us to give up such routes as Hanover to Lyon. We will always find ways to get around restrictions that might be imposed by governments. One of our great advantages is to be flexible and adapt to change, and very quickly.”A major focus for Flybe currently is on Germany, where it an expanded offering will see Düsseldorf become Flybe’s first base outside the UK by fall 2017.“We plan to station initially three Q400s there and hire German crews for cockpit and cabin”, says chief operations officer Luke Farajallah.Another aspect of Flybe’s success is its ability to combine elements of both network carriers and LCCs.  It operates  a decentralised route network means it operates from 10 bases in addition to its corporate headquarters in the southern English city of Exeter.The biggest base is Birmingham, where currently 11 of its total fleet of 76 aircraft are stationed, followed by Southampton, with nine aircraft, and Belfast with eight.It serves 40 regional airports in the UK and boasts by far the densest domestic network.“One of two passengers flying within the UK without touching London is a Flybe customer”, says Hodder. “We are operating 53 per cent of all domestic flights within the main British isle.”The airline was founded in 1979 as Jersey European Airlines but became British European from 2000 before adopting its current name in 2002.It came close to bankruptcy in  2014 but chief executive Saad Hammad, who arrived in 2013, succeeded in turning around the company and returning it to profit in 2015-16.In the first half of 2016-17, however, profits halved and in October, Hammad unexpectedly resigned without giving reasons.The departure came as British airlines face an uncertain future with little clarity about the ramifications of Brexit and what traffic rights they will have to the continent, and within the European Union.At the same time, the pound weakened and lacklustre passenger demand and overcapacities in the European short haul markets further worsened the outlook.During the first half of 2016-17, Flybe’s capacity increased 13.5 per cent while actual passenger numbers only rose by about 7 per cent, prompting load factors to fall to 72 per cent.“We have an offering of frequencies and density in our schedules equal to a network airline, and a cost base like an LCC,’’ says Hodder. “We sell 80 per cent of our tickets via our website, another LCC element.“At the same time, more like a network carrier, we are working a lot with codeshare agreements and interlining, with Air France, Etihad, Emirates or Virgin Atlantic, in Europe also with Air Berlin now.’’last_img