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UK-India Carrier Claims To Crack ‘Impossible’ Airline Model

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Flypop CEO Nino Judge is a business maverick who believes he has finally cracked the seemingly impossible long-haul low-cost airline model. He plans to launch the airline in 2021

What’s the inspiration behind flypop?

The inspiration came from my father who always wanted to fly non-stop back to Punjab from the UK, but there were never any low-cost options. I was absolutely stunned that there had never been a low-cost carrier offering fares from the UK or US to South Asia. Basically the idea came from him wanting to travel as quickly and safely as possible. As you get older you need that and if you’re a young family with kids you need that too.

We’ve already seen that there’s a growing opportunity for direct low-cost flights between the UK and India. You only have to look at SpiceJet and what they sampled recently. But obviously it’s a tricky time for the aviation industry. How do you think the launch will go, if it indeed goes ahead as scheduled?

As far as I’m concerned, there’s never been a better time to start an airline with the overhead costs being so low, although there’s no hurry to get the airline launched. I’ve just got to make sure it’s ready to capture any pent-up demand. It’s a good problem because there are incoming phone calls from suppliers offering 50 percent discounts on everything. So I pick and choose how I launch and when I launch. I just have to be ready. Our launch model removes complexity because we’re going to start with a wet-lease model. flypop’s going to be sales, marketing and a management team, [the operations] are going to be outsourced to a wet-lease supplier in the UK or Europe. 

Are you confident that demand will pick up enough for you to launch? Or will it be a case of seeing what happens and delaying the launch if needed?

It’s definitely the delay option because the low-cost model is based upon filling the aircraft and getting ancillary revenue. We have very low pre-launch operational overheads allowing us to sustain a prolonged delay until the aviation industry comes back to some kind of normality. We’ll be locking our supply deals in at the lowest levels in history with optionality to launch when we want to launch. So there’s virtually no cash burn until we’re ready, unlike our poor colleagues who’ve got these massive cash burns which are millions of pounds a month. It’s a massive advantage. The only thing I’ve got to do is get my timing right and not launch too early and start incurring that burn.

 

When do you plan on launching?

We wanted to be ready by April. April obviously is the Easter holidays plus it’s the Sikh holy month of Vaisakhi, where we would have a lot of travellers. However, we won’t press the button until we know we can get the volumes and can sustain higher fares.

Do you think air fares will remain relatively steady for the foreseeable future?

It’s really going to be a case of supply and demand. The supply will be right there to cater for the demand so I feel the fares will come down. The fares will come down to exactly where they were before and we’ll be even lower than that. We’re hoping to be at least 30 percent cheaper than anybody else.

What are you doing up until the launch itself to prepare the airline? Will you be busy negotiating airport slots, for example?

 

Absolutely. And we have a fantastic negotiating team led by Charlie Clifton, who is the ex-operations director of Ryanair. He’s salivating to go and meet the suppliers and get the best deals, as he did with Ryanair for 20 years. Six months ago we couldn’t even get a phone call to London Heathrow and now they’re approaching us, so it’s a totally different world. Six months ago our business plan included the old Airbus A330-300s, five or seven years old. Now we can get brand new [Aribus] neos, [Boeing] Dreamliners, A350s, whatever we want. Back in the day there were pilot shortages and now there’s a surplus of pilots. These will all get leveraged and it’ll be reflected in our low fares.

That’s quite an interesting point. The long-haul low-cost model has been debated for a long time. Norwegian is just one example of an airline that has failed to make it sustainable. Why do you think flypop’s model is going to be successful?

VFR (visiting friends and relatives). It literally comes down to that. Long-haul low-cost is dependent on filling your low-cost flights. If you can’t fill them up, you’re making a loss. Norwegian had the right idea but unfortunately they weren’t catering for a segment that can fill their planes up all year round. That’s what we have with the South Asian diaspora that go back and forth to the second cities of India from New York, Toronto, the UK and parts of Europe. They go back and forth to the second cities all year round, and give them low fares and they’ll travel even more. Everybody got some part of low-cost long-haul right, many have got 80 percent of it right, but with business, unless you get 100 percent right you’re going to struggle. With the flypop long-haul low-cost model, the winning ingredient is the target segment.

So I imagine choosing your destinations and marketing strategy will be absolutely key.

All our destinations are diaspora-led. And if we do any tourist destinations then it’ll only be for those tourist months. Really we’re a diaspora airline. We’re starting in South Asia but the same logic works for the West Indies, the Caribbean and Africa to the UK.  We’ll hopefully be the only low-cost alternative.

How profitable do you think that routes between the UK and India can be?

It’s a huge market. Already 3.4 million Indians travel between UK and India. I sincerely believe once we start flying to the second cities it’s not taking market share away from anyone. It will stimulate at least 50 percent more demand from new customers. So I think it’s a huge market. Around 25 percent of our passengers will come via the Middle Eastern hubs. About 25 percent of our passengers will come via the Delhi and Mumbai hubs. But 50 percent will be new demand.

Which specific destinations do you have in mind?

Amritsar, Ahmedabad, Kolkata, Trivandrum, Goa, Pune, Chennai, Hyderabad, Bangalore. These are all the second cities. We’re just staying away from Mumbai and Delhi. We’ll let the big boys fight over those. That’s just India. And then we’ve got very similar destinations in Pakistan. And then there’s a huge Gurkha population in Britain, so that’s Kathmandu. My ideal would be to fly to Jaffna, but that doesn’t cater for wide-body aircraft at the moment. And then in years three and four, we’re thinking of the West Indies and Africa.

You’re only wet leasing in your initial stages but is the plan to eventually operate your own fleet?

Yes, absolutely. We are desperate to lock in the cheap deals right now. But it’s one step at a time. I don’t think wide-bodies are going to get bought up very quickly anyway. We’ll start with a wet-lease, get to our second aircraft, make sure all our systems and processes are in place, and then we’ll lock in a massive ten to 20-plane deal at a huge discount so we can keep our CASK low and pass it on to the customers over the next 10 years. We are in negotiations right now with Boeing and Airbus to do that.

And why the Airbus A330? Is that just because of the previous plan that was set up? Could you be looking at Dreamliners or A350s in the future, for example?

No, not at all. The A330-300 was the best value for money pre-COVID-19. The operators like AirAsia X who had them, had them almost exactly configured to what we want, which is an all-economy set-up. Those were the jets that were readily available. But now we are talking to the lessors and the OEMs about new 787-9s, A330neos and A350neos. So we’re going to offer our customers as good a product as any legacy airline but just 30 percent cheaper. The one thing we don’t do is fly over 10 hours to any destination. It means that by the end of every 24 hours our aircraft will be back at base for its check-ups.

Can you ever see yourself using long-range narrow bodies, for example A321XLRs?

No. I just don’t think single-aisle aircraft will ever catch on for long-haul flights but I’m happy to be proven wrong. I really believe for long-haul it’s a completely different passenger experience and dynamic. You’ve got to have twin-aisles for people to get to the toilet and for serving trolleys. I’m convinced that wide-bodies are still the future as long as you’ve got them on routes where you can fill up.

In the Gulf region, some carriers make up a part of their business by connecting the UK and India. Do you think that you will be able to take a degree of market share from these operators?

I think there are some people who will always want to travel via the Middle East, for example the middle classes and single travellers. But there’s a certain sector that just needs to fly non-stop. And that’s the very small segment I think that we’ll be taking from Middle East carriers. There’s enough of the pie for the Middle Eastern, UK and Indian premium carriers. The pie is so large and it’s destined to grow even further.

You said that the product will be as good as the legacy carriers that are already serving that market. What will the feel of the airline be like from a passenger-experience perspective?

It’ll be very similar to Norwegian and AirAsia X. There won’t be any screens on the back of seats. There will be USB ports so you can charge your device. We’ll have our own app where you can book tickets, buy ancillaries, watch things on-board. Everything will be off our app. And so it’s very much like the AirAsia X product. We’ll sell everything. The only thing you’re allowed to take on-board is a 10kg bag and everything else you pay for. We’ll have about 400 31-inch seats, nine-abreast, whether it’s a Dreamliner, A330 or A350. At the front we’ll have some extra legroom so you can customise a premium journey. We’ll have free Wi-Fi so that you can order your drinks off your device. And if you don’t have a device, we’ll even lend you one for a cost. It’ll be eight hours of marketing everything we’ve got. 

You’ve already touched on the point about surplus pilots and cabin crew, not only in the UK, but everywhere in the world. It’s true that there is no shortage of potential staff and recruitment is traditionally one of the hardest parts of any business. So the current state of the industry must present a unique opportunity to you.

I don’t want to gloat but it’s an employer’s market. I can’t think of a better scenario for an international start-up where you’re allowed to arrive on a level playing field to your competitors, if not at an advantage.

There has been little to celebrate in the aviation industry recently but you certainly seem to have lots of confidence in your concept. What is your message to the market?

The market will come back and it’ll come back stronger. I’m hoping [airlines] will take this advantage of coming back to be much more carbon neutral because that’s something we have to face up to. And the customer experience has to be absolutely second-to-none now when it comes to safety. It’s a real opportunity for us all to get it right, which I think the aviation industry hasn’t done because it obviously adds costs. We want to be a really low-cost, friendly airline. Asian hospitality is second-to-none but we can combine that with British financial governance rigour. At the end of the day, low-cost doesn’t mean treating passengers badly. You’ve got to treat your passengers well, with dignity. Have some fun on-board, some background music and just give them the service they want. I’m really grateful to the UK Government who did two or three months of due diligence on us to make sure that we are a post-pandemic, post-Brexit model start-up that is going to add to British employment. And it links us to the whole Commonwealth. Whether you agree with Brexit or not, I think having trade links and employment links with India could be a really big differentiator for Britain.

What are your other differentiators?

Obviously we’re going to be carbon neutral. We are going to offset on our dollar every passenger. Initially we will buy the carbon offsets but we want to get to a place where we plant a tree for every passenger. That’s number one. Plus for every 400 meals sold on-board we’ll give 200 meals to the homeless in the UK or 1,000 equivalent in South Asia. That’s called the Buy One, Give One Initiative. This is the true definition of disruption. You can make lots of money without having a detrimental effect on society. There’s no need for it.

Ref: Aviationbusinessme.com

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