In our June/July issue, we celebrate bizav with a visit to Sunwest Aviation in Calgary. We also profile Flightdeck Solutions, discuss northern aviation priorities, and remember the Dash 7. Plus: RCAF retention challenges.
Jim Scott has big dreams for his airline, and customer experience is key to them all.
Scott, the president and CEO of Flair Airlines, sat down with Skies during the Air Transport Association of Canada’s annual conference on Nov. 14 in Vancouver, B.C.
The Flair team has been busy since it officially transitioned from a charter operator to Canada’s first ultra-low-cost carrier (ULCC) on June 15, 2018.
Seventy employees were hired for the launch, and the airline continues to recruit pilots, flight attendants and support staff to meet its aggressive expansion targets. Today, Flair employs 369 people.
“Aggressive but realistic growth”
By the end of 2020, Scott–a former airline pilot himself–is aiming to have 20 Boeing 737-800NGs operating across Canada and into selected U.S. destinations.
He predicts the company ranks will swell to 1,300 employees by that time.
“We want to increase our reach to different destinations, but also provide frequency to destinations we are currently on,” Scott told Skies. “We did 10 domestic destinations this summer and dropped to eight domestic for the winter, and we are introducing six U.S. destinations in the next 30 days.”
On Nov. 8, the airline began winter service to Las Vegas, Nev., from Toronto, Winnipeg and Edmonton. On Dec. 15, it will be launching flights to other U.S. sun destinations, including Palm Springs, Calif.; Phoenix, Ariz.; and Miami, Orlando and St. Petersburg in Florida.
Flair currently operates a fleet of seven Boeing 737-400 aircraft, although Scott said it plans to upgrade to larger and more efficient 737-800NG jets by January 2019.
“We are bringing in two wet-leased aircraft [a wet lease includes both aircraft and crew] so we can take our own pilots off the line for training, and get them into 737-800s by January.”
The extra range offered by the 737-800NG aircraft will allow Flair to fly non-stop from Edmonton to Miami, for example. From there, passengers will be able to connect with cruise ships departing from that port.
Scott said Flair’s current daily aircraft utilization is 8.5 hours per airplane, and the goal is to increase that to 12 hours per day once the new aircraft are in service.
Building a brand
Flair is aiming to be Canada’s low-cost carrier of choice, and Scott said it all starts with a strong brand.
“We’re really working on our branding, customer service, flight attendant uniforms–our whole look. The way we do business will be customer focused,” he said. “It’s our opinion that price will get them to the aircraft once, but service will get them there over and over.”
The key, said Scott, is to follow the customer’s journey through their entire experience with Flair. From booking to baggage claim, the airline needs to provide its service very, very well.
He admitted the company’s aggressive growth this past summer led to some problems with customer communications.
“When I took over the airline [in January 2018], I doubled the flying and then doubled it again later in the year. It’s gone up four times in volume from when I took the airline over.
“But the call centre didn’t expand at that rate. We outgrew our infrastructure and that’s what happened this summer.”
He said Flair is now hiring “the infrastructure that will last us to 16 airplanes, so we won’t be caught out again.”
Scott doesn’t underestimate the importance of delivering the best customer service possible at the ULCC price point. He said the Canadian market is different from that of the U.S. or Europe, and any carrier who does not understand that is inviting failure.
“It really is price plus customer service in Canada. In Europe and the U.S., you can get away with price only. If you don’t understand the Canadian marketplace, you are at risk of making huge mistakes in your marketing because of the Canadian psyche.”
He added that in Canada, good customer service is not about providing “lounges and limousines.” Rather, it’s about providing customers with what they have paid for–and quickly fixing any issues that arise.
Growing a customer base
For the most part, Flair aims to attract passengers who wouldn’t normally fly, but are now able to do so because fares are low.
“We are creating our own customer base. Most of them who have flown with Flair have not flown with another airline, and they will come back to us,” said Scott.
“We’ve already seen that we are sometimes higher priced than Swoop. But we have higher loads, and the reason is brand loyalty.”
In the summer, Flair’s load factors were above 90 per cent; currently, in the so-called “shoulder season,” they are still maintaining loads in the neighbourhood of 80 per cent. The airline is heavily booked into the Christmas season and beyond, said Scott.
He explained that while other airlines focus on business passengers who fly year-round, Flair’s bread and butter is the discretionary traveller.
“They stop flying in the cold weather,” said Scott. “And price will not stimulate at 40 below.”
When the mercury drops, Canadians stop visiting and the east-west traffic pattern changes to north-south.
“That’s when you’ll find a lot of these secondary airports are difficult to stimulate traffic,” said Scott, explaining why Flair chooses to service major airports like Toronto Pearson and Vancouver International.
He also believes the only true ULCC airport in Canada is Abbotsford International in B.C. With that one exception, “the secondary airports don’t save you a great deal more than using the big airports.”
Plus, it’s difficult during non-peak seasons to fill seats on new routes. Generally speaking, Flair needs to be serving a route for six weeks before it will see an 80 per cent load factor.
“The reality is that to build up a city, there has to be other factors. One is your brand. Once they try it, Canadians are loyal to a brand.”
Of course, another key advantage is people. Scott said Flair is fortunate to have a highly experienced team that knows the Canadian marketplace.
“Everyone who works for us knows the difference between summer and winter schedules and knows the shoulder seasons. We can now forecast a route to within two per cent of its performance with passenger load factors, price and auxiliary revenue.”
He said the call centre has even pinpointed the highest-selling day of the week, even down to the hour when demand is greatest, so it can staff accordingly.
“The passion of the staff is what differentiates us,” said Scott proudly. “Everybody at Flair wants the airline to be the best it can be. We take pride in our brand and everybody is extremely excited to be at work.”
A lifestyle with Flair
Flair is one of the few unionized Canadian airlines authorized to hire direct entry captains. While Scott said the company does have a program to promote its first officers, he said the direct entry clause has helped to ensure the new ULCC is not feeling the pinch of the current pilot shortage.
“We have a very good contract with Unifor. We are paying 75 per cent market force wages, but we have a lifestyle contract with clauses that protect time off. If our pilots volunteer to fly on their day off, they are paid double time.”
He said several Flair pilots are now reaching out to fellow pilots, and some have even returned home from overseas jobs “because of the lifestyle contract and the ability to advance quickly to the left seat.”
For ULCCs, a big part of success is controlling costs. Scott said Flair’s target cost per available seat mile (CASM)–an industry benchmark used to evaluate operational expenses–is 10 cents or lower at today’s fuel prices.
“We are sitting slightly above that now, but we’ll be there by the time we get the first few 800s aboard. We’ve done a really good job on our costs.”
When asked whether Canada can support more than one ULCC, Scott said Flair and WestJet’s Swoop are finding a “natural balance.”
“We are into markets Swoop is not,” he said. “They have gone to markets where we are not. Between us, we have the country covered.”
Future markets for Flair include Ottawa and more Eastern Canadian destinations in Quebec and the Maritimes. Scott said the airline will be changing some previously seasonal markets, like Victoria, B.C., to year-round service to increase frequency.
“We’ll move a million passengers in a 12-month period,” he said. “We are starting to increase our flying because we have a core business now.”
Currently, 65 per cent of Flair flights go through its home base at Edmonton International Airport. Scott said the airline enjoys a strong partnership with the airport and the fast-growing city has the “right demographics.”
But again, he emphasized, it comes down to customer experience.
“We want to be known as affordable airfare, but with a caring and compassionate customer service model.”