TROTTINGS*

 

Trottings: Air Belgium’s flawed businessplan.

Relaunched Air Belgium has delayed plans for its Brussels-Hong Kong flights to April; they were planned to start October 2017.

 

It plans to start six more routes into China by this summer.

 

We expect AB’s new businessplan, from new owners in 2016, to fail before year-end. Some of the reasons:

 

-Frequency/routes. 4/week is not enough for its target market – upmarket. At least daily is needed.

 

-Routes. AB’s potential customers will fly other to other places as well of course, thus use other airlines. As most upmarket travellers are likely to be members in loyalty programs, they may prefer to stay with those other airlines when they fly to Hong Kong. If AB cannot start other routes itself, it should sign deals with other airlines on selected routes.

 

-Aircraft. The 4-engine A340 is a good aircraft, but costly for fuel, particularly for a start-up airline. Many would try to operate a 2-engine A350 or B787 on this route if traffic is not enough for B777s A380s etc.

 

-It has two A340s at present. That is enough for schedule reliability for Hong Kong flights, but at least four more will be needed to operate those other planned routes and to offer schedule reliability.

 

-Airport. AB plans to use Brussels Charleroi, not good for connections.

 

-China. AB considers Hong Kong a ‘China’ destination. Although correct in theory, it is not ‘China’ in terms of politics or in airline route-rights. Six by summer is not impossible of course, but looks over-ambitious.

 

-Sales via internet, but also GDS and travel agencies. GDS and agencies are usually too costly for a start-up because of fees.

 

-AB plans to employ 100 in Hong Kong this year. That is a foolishly-costly decision. We would think one staff member (Hong Kong Manager), with a handling agent for operations, and a GSA for sales – at least until it is established and/or the first 2/3 years.

 

-AB’s A340s will have economy, premium, business classes. That is at least one too many, and will also cause confusion, eg is ‘premium’ above ‘business’?

 

The Fox

*Trottings = Trip Jottings

 

 

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