All-business L'Avion vows to keep on flying
NEW YORK (AP) -- In recent months, three all-business class trans-Atlantic carriers have quit flying, leaving just one in the air.
But the head of L'Avion, the last of the high-end airlines still operating, said he doesn't believe his small company is likely to go the way of similarly ambitious startups MAXjet Airways Inc. and Eos Airlines Inc. and Silverjet PLC.
"At the end of the day, we are in a much better position," President and Chief Executive Marc Rochet said in an interview with The Associated Press on Thursday.
There is reason to be skeptical.
Silverjet, which stopped flying Friday, was touting expansion plans as recently as last month. And soaring fuel prices, credit troubles and a slumping U.S. economy are forcing carriers of all sizes to rethink their business models. Continental Airlines Inc. was the latest to announce sweeping cutbacks Thursday.
But Rochet is quick to point out that Paris-based L'Avion is different from the airlines against which it is often compared.
The company is vigilant about keeping costs and spending in check, Rochet said, forgoing perks like private terminals and operating with a back-office staff of just 20 employees. It also is backed by plenty of private-equity cash, so is not subject to the anxieties of skittish public shareholders. "It makes my life a little easier," Rochet said.
And perhaps most important, L'Avion is growing its business more slowly than other carriers. Rochet said the airline is not planning to launch any additional flights this year, opting instead to partner in a code-sharing agreement with OpenSkies, a new carrier being launched by British Airways later this month.
"We have been very, very cautious, and we will continue to be very cautious" in terms of growth, Rochet said.
L'Avion operates two daily round-trip flights most days between Paris' Orly Airport and Newark Liberty International, outside New York.
The deal with Open Skies, which will launch once-daily flights to New York's John F. Kennedy International Airport June 19, will effectively provide L'Avion added frequency without the additional costs of operating the routes itself. For OpenSkies, the agreement provides access to the relatively central Orly, OpenSkies spokesman John Hartz said.
Air France, American Airlines, Continental and Delta Air Lines all offer multiple daily nonstop flights between New York and Paris.
Since L'Avion began flying early last year, jet fuel prices on the New York spot market have jumped 123 percent, according to the U.S. Energy Information Administration.
Still, L'Avion has been able to pass along much of its increased costs to passengers, and has managed to fill 70 to 80 percent of its seats, Rochet said. It also has benefited from a strong euro, which has taken some of the sting out of dollar-denominated fuel and made it easier to hedge some energy costs.
"Assuming fuel at (oil prices of) $120 to $150 a barrel ... we think we have a successful model," he said.
http://biz.yahoo.com/ap/080605/l_avion.html?.v=1
NEW YORK (AP) -- In recent months, three all-business class trans-Atlantic carriers have quit flying, leaving just one in the air.
But the head of L'Avion, the last of the high-end airlines still operating, said he doesn't believe his small company is likely to go the way of similarly ambitious startups MAXjet Airways Inc. and Eos Airlines Inc. and Silverjet PLC.
"At the end of the day, we are in a much better position," President and Chief Executive Marc Rochet said in an interview with The Associated Press on Thursday.
There is reason to be skeptical.
Silverjet, which stopped flying Friday, was touting expansion plans as recently as last month. And soaring fuel prices, credit troubles and a slumping U.S. economy are forcing carriers of all sizes to rethink their business models. Continental Airlines Inc. was the latest to announce sweeping cutbacks Thursday.
But Rochet is quick to point out that Paris-based L'Avion is different from the airlines against which it is often compared.
The company is vigilant about keeping costs and spending in check, Rochet said, forgoing perks like private terminals and operating with a back-office staff of just 20 employees. It also is backed by plenty of private-equity cash, so is not subject to the anxieties of skittish public shareholders. "It makes my life a little easier," Rochet said.
And perhaps most important, L'Avion is growing its business more slowly than other carriers. Rochet said the airline is not planning to launch any additional flights this year, opting instead to partner in a code-sharing agreement with OpenSkies, a new carrier being launched by British Airways later this month.
"We have been very, very cautious, and we will continue to be very cautious" in terms of growth, Rochet said.
L'Avion operates two daily round-trip flights most days between Paris' Orly Airport and Newark Liberty International, outside New York.
The deal with Open Skies, which will launch once-daily flights to New York's John F. Kennedy International Airport June 19, will effectively provide L'Avion added frequency without the additional costs of operating the routes itself. For OpenSkies, the agreement provides access to the relatively central Orly, OpenSkies spokesman John Hartz said.
Air France, American Airlines, Continental and Delta Air Lines all offer multiple daily nonstop flights between New York and Paris.
Since L'Avion began flying early last year, jet fuel prices on the New York spot market have jumped 123 percent, according to the U.S. Energy Information Administration.
Still, L'Avion has been able to pass along much of its increased costs to passengers, and has managed to fill 70 to 80 percent of its seats, Rochet said. It also has benefited from a strong euro, which has taken some of the sting out of dollar-denominated fuel and made it easier to hedge some energy costs.
"Assuming fuel at (oil prices of) $120 to $150 a barrel ... we think we have a successful model," he said.
http://biz.yahoo.com/ap/080605/l_avion.html?.v=1
