Odyssey Airlines

New all-business class airline to fly London to New York


Bankers may be languishing in popularity polls but a new airline wants their business and is prepared to challenge British Airways for it once the financial crisis is over.

A British venture called Odyssey Airlines hopes to start non-stop all-business class flights from London City to New York and other locations using 10 newly-ordered Bombardier CSeries passenger jets, aviation industry sources told Reuters.

The disclosure lifts a mystery surrounding the identity of one of the buyers for a Canadian jet which aims to break into a market long dominated by Airbus and Boeing.

Train and plane maker Bombardier said in June it had sold two sets of 10 aircraft to customers that preferred to stay bababa, one of which was an "unidentified European buyer" and the other was an already established airline.

Bombardier declined any further comment.

The start-up directly targets BA which offers twice-daily all-business flights using Airbus A318 aircraft from London City, a small business airport near the capital's financial district which can handle only moderately-sized jetliners.

The idea is to capture demand for bankers and other professionals for transatlantic travel without a time-consuming journey across the capital to London's congested Heathrow. Using the future CSeries jet would also eliminate the need for a fuel stop in Ireland when travelling westbound to New York.

The new airline may hope to entice executive travellers away from other business jet schemes such as NetJets.

But its path is strewn with potential hazards and previous failures.

Several all-business airlines have been killed off by high costs and the difficulty niche airlines face in matching benefits offered by big players. U.S.-based Maxjets filed for bankruptcy in 2007 and UK-based Silverjet collapsed in 2008.

"It is difficult for small companies to make money in this type of market. Business travellers usually belong to frequent flyer schemes and loyalty programmes are difficult to crack," said John Feren, executive vice president of U.S. lessor Aviation Capital Group, owned by insurer Pacific Life.

Analysts say that to succeed, new entrants into business travel must have an alliance with a major airline.

Even then, the number of previous casualties suggests the margin for error is small.

"If you find a niche that looks attractive, it just takes two seconds for somebody to come in like a freight train and usurp the market," said Ray Neidl, Senior Aerospace and Airlines Analyst, Maxim Group investment bank in New York.

"It is a tough environment because of high oil prices, tight capital markets and all of the consolidation which has made the competition stronger."

NON-STOP FLIGHTS

Odyssey Airlines is keeping a low profile, as is common for new entrants in the cut-throat travel industry, but at least two web addresses -- [Vous devez être inscrit et connecté pour voir ce lien] and [Vous devez être inscrit et connecté pour voir ce lien] -- have been reserved for "Future Odyssey Airlines International".

The company was incorporated in the UK in September 2010 and its main director is Adam Scott, according to public UK records.

When contacted via an email address hosted on the company's web domain, a person identifying himself as Adam Scott replied from a personal account and denied all links with the project.

Reached later by telephone he denied any links with the airline industry and said he could not explain how he had received email via Odyssey Airlines' web domain.

A former Air France executive said to have been involved in the project also denied any involvement.

None of the sources agreed to be named because the project has yet to be launched.

The CSeries is a major bet too for Bombardier. Its decision to enter the $100 billion-a-year jet market partially prompted Airbus and Boeing to revamp their best-selling narrowbody jets.

Bombardier's firm orders since then have been somewhat sluggish with 133 confirmed sales, a tenth of the combined total of the revamped alternatives. Industry analysts monitor the types of buyer on the backlog as well as the number of orders.

The CSeries is due to enter service in late 2013 and Odyssey would not be likely to start operations before 2014 or 2015, hoping Canada's new jet will change the competitive landscape.

Built from new lightweight materials, the CSeries aircraft could be attractive because it would be able to cross the Atlantic in one hop when carrying a small load of passengers.

When travelling westbound, BA's twice-daily flights have to stop in Ireland to refuel. That is because the A318, the smallest member of the Airbus fleet, lacks enough range to make the whole trip against prevailing headwinds.

THE The Odyssey's Odyssey - Another Attempt At All Biz Class Transatlantic Profits

One of the unidentified customers for Bombardier's CSeries aircraft has been [Vous devez être inscrit et connecté pour voir ce lien] by Reuters to be a new UK based start-up called Odyssey Airways. The airline's scope however is unique - provide all Business class transatlantic services out of London City airport. If we go along the orders record, this is the 'European buyer' which [Vous devez être inscrit et connecté pour voir ce lien] 10 CSeries CS100 aircraft back in June at the 2011 Paris Air Show.

This puts the new airline in direct competition with British Airways' Airbus A318 all Business Class out of London City (LCY). How well can they compete?


1. AIRCRAFT COMPARISON
British Airways uses the Airbus A318 aircraft for its LCY - New York operation. For this analysis, we will assume that Odyssey will use the CS100ER variant for this mission, and also assume that the aircraft meets its performance targets. British Airways uses the A318 Weight Variant 004, the details of which has been used here.

Characteristic	A318	CS100ER
Typical pax load	107	110
Engine	PW6000 or CFM56*	PW1000G
Thrust	23,300lb	23,300lb
Range	3,200NM/ 5,950km	2,950NM/ 5,463km
Takeoff Field Length	4,446ft./ 1,355m^^	4,905ft. / 1,509m
Landing Field Length	4,446ft./ 1,355m^^	4,430ft./ 1,350m
Fuselage Length	103ft. 2in. / 31.44m	114ft. 6in. / 34.9m
Cabin Width	12ft. 1in. / 3.70m	10ft. 1in. / 3.06m
MTOW	145,505lb	128,200lb
MLW	126,766lb	111,500lb
Max. Payload	34,573lb	32,100lb

Key: Maximum Landing Weight (MLW):
Maximum weight for landing as limited by aircraft strength and airworthiness requirements.

Maximum Takeoff Weight (MTOW):
Maximum weight for takeoff as limited by aircraft strength and airworthiness requirements.
* - BA uses CFM56 engines
^^ - Airbus does not make public available the runway values for this model. Figures are the best available.

One advantage that the A318 has is its Steep Approach capability. However, Bombardier is likely to work towards achieving this specification in order to satisfy, and to increase, its small customer base.
The CS100 is about 11ft. longer than the A318 and hence will be able to accommodate two more seat rows than the latter. This should mean that the CS100 will be able to seat 40 passengers in a 4 abreast seating configuration. This translates to a 25% extra passenger load at almost 14% lower MTOW. With this, the CS100 will have a considerable fuel burn advantage. The modern technologies and the PW1100 GTF engines used on the CSeries is expected to bring considerable cost savings, thus providing the CS100 with a lucrative operating cost advantage over the A318. Interestingly, Odyssey will still have an operating cost advantage even if it opts to a less dense seating configuration with even more comfort.

A challenge to the operation would be the limited runway length at London City airport. A solution to this would be a stop at Shannon, like British Airways does, thus also providing the passengers the ability to pre-clear their immigration into the United States. However, a unique selling point for Odyssey, as reported, would be to have to be able to operate nonstop. Unless on a day with significant headwinds, the CS100ER would likely be able to make the journey from LCY to NYC nonstop, although perhaps taking a slight payload hit.

The modern interior and the cabin comfort of CSeries is likely to attract more passengers to Odyssey too.
Odyseey wins here by a significant margin - if CSeries meets its performance targets.

2. COMMERCIAL COMPARISON

British Airways is entering the mission with a strong network which helps it feed the service. BA's advantage is further strengthened with its frequent flier base. The new start-up Odyssey will have neither, which could be quite challenging. However, if Odyssey drives a strong marketing campaign, with the right pricing strategy, building a loyal customer base will not be very hard. An added advantage would be the fact that the route is likely to have a very high share of O&D traffic due to LCY's convenient location in London's financial district.
Nevertheless, one of the best moves that the new start-up could make is to sign some interline agreements with select carriers which could provide it with sufficient feed to begin with.


CONCLUSION

Some analysts seem to argue that Odyssey too will end up being another Eos or Maxjet - both of which were all Business class carriers that eventually went bankrupt. However, Odyssey's case would be different given that it will operate narrow-body aircraft (all of the previous airlines used wide-body aircraft or at least the larger narrow-body Boeing 757s) and operate on a very lucrative business route that has already proven quite successful for BA. And Odyssey will only need to fill 40 seats, at maximum - while achieving a potentially high yield.
The best option for Odyssey would be not to be limited to a sole LCY - North America operation and to use some of its aircraft to serve key business points in Europe. This fleet could be configured with a more denser configuration, that would still be more comfortable than the average European Business Class - in order to attract a premium. By crafting a well connected and convenient schedule, the airline would be able to develop just the right kind of feed that it needs.
Having a premium suite of services that would still not increase the costs, the airline will be able to carve a successful niche for itself built on sustainable profitability.
This appears to be a good business case, if well executed and has a very high potential to become successful - if done in the right way. It however is no way to 'get-rich-quick' and the shareholder patience will be needed to ensure that the airline builds a sustainable future for itself. Specially in an age where short haul is more dominated by Low Cost Carriers day by day, this appears to be a very attractive and interesting idea to work upon. But the success of this operation could only be achieved IF Odyssey follows the correct path. And that is a big IF, given the impending European currency crisis and the fact that this airline might never take to the skies at all - as it is an airline that is not yet confirmed to exist. Nevertheless, if somebody decides to try this concept, it would be one very interesting project to watch and would have a very good chance of becoming a success.

Further reading : British Airways A318 Operation - [Vous devez être inscrit et connecté pour voir ce lien]
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