An experiment that worked
Buzz commercial director Tony Comacho admits the airline started almost as an experiment. "KLM said to us: 'Prove that it works and we'll develop it', he says. KLM seems now to be convinced.
Last month it pledged long-term commitment to the low-cost market as it launched a study into the future structure of its low-fare business.
Launching with aircraft and crews transferred from KLM uk, Comacho is under no illusions that Buzz has faced a challenge to adapt to the no-frills sector. "It's taken time to transition from being a medium-cost operator to a fully low-cost carrier. We're still in the process of evolution and will be for a little while," he says.
The airline pursues a philosophy of keeping the number of rotations high to boost earnings per seat, but this limits "how far south we can fly" before sector length becomes too great, adds Comacho.
Buzz increased capacity by 16% last year and will expand it a further 20% this year, purely through better aircraft utilisation and increased flying. "We are concentrating on shorter sectors," says Comacho. Buzz is also working its crews harder - "but they get more days off and have supported the move to increase productivity", he adds.
The airline carried 1.26 million passengers in its first full year, and this increased to 1.5 million in 2001-2. Its network load factor is currently running at 68-69%.
One area where Buzz sees a major opportunity to reduce costs is its fleet. As well as not being homogeneous, the fact that the bulk of its fleet are BAe 146s hurts its cost base. "The 110-seat 146-300 doesn't have enough seats relative to its costs," says Comacho. "It also has payload/range constraints."
Buzz has reached a point where it needs to address its long-term fleet needs, which will head the next phase of efforts to drive down costs. This is expected to see the airline standardise on a 150-seat category aircraft - probably the Boeing 737-300. The 146s are due to begin returning to lessors from March next year and Comacho aims to begin introducing replacements next spring.
There was talk a year ago of KLM buying Go from British Airways and merging it with Buzz: "It would have been a good way of expanding the business, but we were put off by the complexity," says Comacho.
Unlike its rivals, Buzz does not operate secondary hubs, although it has just launched a series of intra-France services. "We will have to look at route and hub strategy this year," Comacho adds.
In March, KLM unveiled plans to restructure its subsidiaries, which has resulted in Buzz being tied with Basiq Air, the low-cost brand of Dutch carrier Transavia.
Although a merger is seen unlikely in the near term, Floris van Pallandt, who heads the new combined division, will oversee a study in to the best way forward in this sector.
Source: Flight International
