MyTravel/Airtours to enter scheduled lowcost airli

MyTravel/Airtours to enter scheduled lowcost airline arena:

Package holiday operator MyTravel, formerly known as Airtours, is to start up its own low-cost airline in an attempt to win back customers from carriers such as Easyjet and Go. MyTravel plans to repackage its airline operation, which is under new management, and present it as an an alternative to the established no-frills operators, offering more departure airports and more destinations.

The company operates from 21 British airports and flies to 70 overseas destinations with a UK-based fleet of 30 aircraft. Easyjet has a 31-strong fleet serving 17 destinations while Ryanair offers 36 foreign destinations with a fleet of 44 aircraft. The Irish carrier operates at 15 British airports but most of those offer only flights to Dublin.

MyTravel chief executive Tim Byrne said the initiative, planned for the autumn, will mean the company’s traditional charter airline becoming far more flexible. It offers only one-week or two-week return flights at present but under the new plan it will provide mix-and-match one-way flights, in the same way as the low cost airlines.

Mr Byrne said traditional tour operators had allowed the low-cost airlines to steal their value-for-money image. “We have given away our value proposition,” he said. “And we are determined to get it back.”

He insisted that the company had not lost customers to the new airlines but said there was a new market of DIY holidaymakers and weekend break trippers which MyTravel had not cashed in on. He plans a “more flexible approach” to attract this new business.

MyTravel flights will be sold via the web and by phone. They are also likely to be of fered through the MyTravel chain of travel agencies. The shops were previously known as Going Places and Travelworld but are gradually being rebadged under the new corporate banner.

Mr Byrne is not planning a price war with the existing low-cost airlines but admitted that it was inevitable when departure points and destinations overlap with his rivals.

He believes that as a tour op erator MyTravel is at a cost disadvantage to the existing no-frills airlines. The company has to put up a £300m tour operators’ bond, costing the group some £1m a year, which guarantees that its customers would be returned to the UK should MyTravel go bust. There is no such obligation on carriers such as Ryanair, Go and Easyjet.

One of the obstacles MyTravel is likely to face as a low-cost airline is the reputation of charter airlines on delays.

Mr Byrne said, however, that the company’s record on delays had improved dramatically since last year, when a new airline chief was brought in from logistics company Christian Salveson.

“We now have 94% of our flights departing within 30 minutes of their scheduled time,” he said. Much of the improvement, he believes, is due to a get-tough approach to laggardly passengers, who check in and then turn up late at the departure gate. “We are just leaving them behind,” he said. A new system to identify the bags of latecomers is letting the airline get their luggage off quickly.

Travel, holidays and flights have been one of the success stories of e-commerce. Low-cost airlines generate more than 80% of their sales via the web. The MyTravel website – in which £63m will have been invested by the end of this year – generates only 2% of group sales so far. It is being updated to incorporate the new airline offer. Mr Byrne hopes web sales will bring in 20% of business within five years.