Brit Air president Xavier Leclercq is unsure about further regional jet orders
François Legros/MORLAIX Julian Moxon/PARIS
As one of the first airlines to have ordered the new generation of regional jets, Brit Air is well placed to gauge the effect of the shift away from turboprops.
Brit Air chairman and chief executive Xavier Leclercq says the European regional jet market is showing signs of saturation - to the point that its order for the next batch of eight optioned 70-seat Bombardier CRJ700s "will have to wait until we see how the market evolves".
The carrier has come a long way since 1973 when Leclercq started an air taxi service from Morlaix, western France. A quarter of a century later, Leclerq runs a growing airline which in between April 1999 and 2000 transported 2.2 million passengers. Annual growth has been 30% for each of the last four years, but Leclercq says this is now likely to fall to a "more manageable" 15-20% a year. Brit Air operates almost 200 flights daily on 41 routes using 37 aircraft.
The airline served about 20 destinations until 1997, when its ground-breaking franchise deal with Air France was signed. By the end of the year, 11 more had been added, another two in 1998 and a further seven in 1999. About 75% of sales are in France, with 40% of revenue generated in the French domestic network and 50% in short-haul European destinations.
Brit Air's fleet comprises eight 46-50-seat ATR 42 turboprops, two 68-seat ATR 72s, twenty 50-seat CRJ100s and seven Fokker-100s, one of which is chartered and sub-let to Proteus Airlines. In November, the carrier will take delivery of its first CRJ700, for which it is the launch customer. Three more are due to arrive early next year. It has options on another eight for delivery in 2002 and 2003, but Leclercq says he will "need some time to think" about these as he believes there is "a danger of overcapacity" in the regional jet market.
While Brit Air is "two or three years ahead of its competitors" in fleet renewal terms, "we have to be careful about taking all the options. I will order them only when I am sure there is no danger of overcapacity."
The current trend may be to drop turboprops in favour of jets, but he says he intends only to reduce the number of ATRs in the fleet, "but not get rid of them. These aircraft are our security against a change in the market. They are extremely reliable, have excellent operating costs and are popular with passengers".
The move to jets has had a "variable" effect on passenger numbers, which have risen by 5-10% since the CRJs entered service, Leclercq says. The jets' higher speed means frequencies can be added. These have been increased on several routes from two to three a day and five a day on flights to and from the new Air France hub at Lyon Satolas Airport. Brit Air was the first airline to be franchised by Air France under a deal covering 30 routes, including the 20 that had constituted most of its network. "A regional airline with no commercial arrangement with a larger carrier won't grow," says Leclercq.
The contract, which runs until 2003, marked a "new stage in a close and enduring commercial agreement" in which Brit Air maintains management autonomy and control over income while consolidating its position in France and Europe. In general, Leclercq says, an alliance between a big and a small airline is not easy, "but we are globally satisfied with the arrangement with Air France and the results are good." While the agreement is "not cast in stone", a franchise "has to last a long time. It is not something you can change every two or three years."
Franchise operations for Air France absorb 72% of Brit Air's total operation and have enabled the regional to grow much faster than if it had remained alone, both through the acquisition of new aircraft and opening new routes and operating them at higher frequencies. Load factor has risen from 53% to more than 60% since the franchise took effect, he adds.
The deal has had a positive impact on finances. Third quarter (October-December) consolidated turnover was Fr900 million ($125 million), a 37.3% increase in 12 months. Leclercq expects the figure for the 1999-2000 financial year to be a record Fr1.6 billion, up 35% for the year. Net profits are expected to rise 30%, to Fr46 million.
Source: Flight International
