Edgardo Badiali has had his hands full steering Italian low-cost start-up Myair towards profitability since its launch in late 2004. But after a “very difficult” first year of operations and a “very good” second year, Badiali says 2007 will be a “year of expansion” for Myair with profit margins expected to reach between 8% and 10%.
Airline Business caught up with Badiali at this year’s French Connect conference in La Baule near Nantes, an event which caused the Myair chief to miss out on attending two Bob Dylan concerts in Italy, much to his undisguised dismay.
Myair last September stepped away from the traditional single-fleet low-cost carrier model when it placed a firm order with Bombardier for 19 CRJ900 aircraft, with the option of converting as many as 15 units to a larger derivative of the CRJ900, if and when such a model became available. The Bergamo-based carrier took up this option in February of this year when it converted all 15 CRJ900 orders into CRJ1000s, making it one of the launch customers for the 100-seat jet.
Badiali says the combination of CRJ900/1000s and Airbus A320s will allow the carrier to target niche markets and test new routes which may not support the use of larger aircraft. “Regional jets make sense to scout new routes where the potential for bigger aircraft is not there,” he notes. While conceding that 90-plus-seat regional jets are more expensive to operate than A320s, Badiali says he is “convinced that unit costs have come down quite a lot” and that regional jets are “becoming more competitive”.
“We see in Italy and France real potential for using this type of aircraft,” he adds, citing as an example Lille in northern France, which Myair serves from Bergamo and Venice using CRJ900s. Lille is one of a number of options Myair is considering as a potential future international base, which the carrier is looking at opening “in about one to two years, when we get to a critical mass”, says Badiali.
Also under consideration are Bordeaux and Nantes in France as well as Sofia in Bulgaria. The carrier plans to base an A320 in Bucharest this June and will base a further two A320s in the Romanian capital within two years. There are also plans to develop more of a presence in southern Italy and a second CRJ900 will be based in Bari this winter.
Myair has deliberately avoided entering the competitive markets of northern Europe, particularly Germany and the UK, and will continue to do so, preferring to focus instead on countries such as Greece, Macedonia, Montenegro and Serbia. “We are not going into the most crowded places in Europe to fight with the strongest guys,” says Badiali, adding that the carrier “could think about Switzerland” as a potential market, but would “open Belgrade tomorrow” if traffic rights would allow it.
Myair currently operates a fleet of five leased A320s and will add a further two of the type in early June. Badiali says the carrier plans to increase its A320 fleet to between 15 and 20 aircraft within the next five years, and will “eventually evaluate” purchasing the aircraft instead of seeking operating leases.
Badiali believes commercial alliances between low-cost carriers will be something the industry will embrace in the coming years, and says Myair is “still working” on forming strategic relationships with airlines in the markets it serves. “I’m quite surprised by the reluctance of low-cost carriers to join alliances. You can do commercial alliances with a lot less investment and I think there will be more movement in that direction in the future,” he notes.
Myair carried 1.2 million passengers last year and is aiming to more than double this to 2.5 million in 2007. The carrier reported an operating profit if €5 million ($6.8 million) in 2006 and is aiming to double its revenues in 2007 to €195 million.
And for those of you who were wondering, Badiali’s two favourite Bob Dylan songs are Visions of Joanna and Don’t Think Twice, It’s All Right.
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Source: Airline Business
