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Route to growth

Since 2017, long-established Scottish regional airline Loganair has been successfully operating in its own right. Satu Dahl talks to Loganair’s Managing Director Jonathan Hinkles about the airline’s strategy for future growth
 

Loganair has been operating since 1962, serving destinations across the Scottish Highlands and Islands, the UK and Europe. For nearly quarter of a century, the airline flew under franchise arrangements with other airlines, operating for British Airways and Flybe. However, in November 2016 the carrier announced that it would be flying in its own right once again in autumn 2017.   

 

Between then and now, Loganair has made a successful transition from a franchise partner to an airline with its own brand under the management of Managing Director Jonathan Hinkles. Loganair, which is a wholly owned subsidiary of Airline Investments Ltd, currently operates over 1,000 flights every week with a fleet of 39 aircraft ranging from eight to 50 passenger seats. In 2017/2018, it carried around 800,000 passengers on its scheduled services and continues to expand both its route network and passenger volumes. The successful move was acknowledged further in October 2018 when the airline received the prestigious ‘Airline of the Year Gold Award’ at the ERA (European Regions Airline Association) General Assembly in Edinburgh.

 

Flying high

Things have certainly moved at a fast pace in the last 12 months, especially when it comes to developing Loganair’s route network. Jonathan Hinkles explains that the airline has introduced a number of new routes – eight by way of organic growth in Loganair’s own network, and others by picking up routes which have been left vacant by other airlines, such as the Glasgow-Dusseldorf route following Eurowings’ withdrawal and the Glasgow-Derry route following Ryanair’s exit from this market. “With the organic growth, the key for us is to place flights on sale as early as possible, ensuring that we have plenty of time for marketing and promotional efforts to build up a strong base of forward bookings. This has worked really well on our new routes from Edinburgh to Bergen and Stavanger, for example, where our summer 2019 bookings already represent over 70% of our expected sales even before the first flight has taken off.” 

 

Commenting further on taking over routes that other carriers have operated previously, Hinkles says: “Where picking up routes from other airlines, we can accept a shorter lead time as there are already established travel patterns and flows. In these cases, we have to get the Loganair message across to our customers – whether through social media or direct marketing. When I say ‘direct marketing’, we had uniformed Loganair team members at Glasgow handing out leaflets and the Tunnock’s Caramel Wafer biscuits we serve on board to passengers heading to Düsseldorf to make sure they knew we would be flying the route after Eurowings stopped. I guess marketing doesn’t come any more direct than that!”

 

The daily Loganair flights to Düsseldorf began on 31 March using the airline’s newly acquired Embraer 145 regional jet aircraft. Loganair stepped in to protect the route, which supports important cultural and business links between the west of Scotland and the North Rhine – Westphalia region of Germany. “Our new Düsseldorf route is Loganair’s first foray into Germany, heralding another significant milestone for the airline as our reach extends into continental Europe. We are now able to carry passengers further and faster since adding Embraer 145s into the fleet, an important development for international travel,” Hinkles said, explaining the importance of this air link to Loganair.

 

When it comes to the already in demand routes between Edinburgh and Norwegian destinations Bergen and Stavanger, Jonathan Rayner, Aviation Director at Edinburgh Airport commented at the time of the announcement of these routes that expanding Loganair’s presence at Scotland’s busiest airport was great news for passengers as it provided greater choice and travel options, something that is always welcomed at Edinburgh Airport. “This expansion will also provide the opportunity to build business links in Norway, as well as appeal to those looking for a leisurely break, and we are excited to see these routes develop.”

 

These regular year-round services are introduced as part of Loganair’s summer 2019 schedule. Stavanger will have four flights each week from Edinburgh on Mondays, Wednesdays, Fridays and Sundays, and flights from Edinburgh to Bergen will operate three times each week on Tuesdays, Thursdays and Saturdays. The routes are operated by the airline’s 37-seat Embraer 135 jet.

 

flybmi closure

Six routes have also joined the Loganair network following the closure of flybmi in February – at the time of this writing.

 

Following its sister airline’s collapse, Loganair stepped in to secure flybmi’s key air routes, which included flights from Aberdeen to Bristol, Oslo and Esbjerg and flights from Newcastle to Stavanger and Brussels. Loganair has also expanded its fleet significantly with the addition of 15 Embraer Regional Jets following the closure of flybmi. Six of the jets are operating on former flybmi routes and contracts and the remainder are progressively appearing on Loganair’s own route network, including replacing Loganair’s last two Dornier 328 turboprops with Embraer 135 jets on the airline’s routes at Norwich. Another development for the airline has been on the personnel side of things, with multiple flybmi employees joining the carrier. “With around 140 former flybmi staff members joining Loganair, an aircraft repaint programme and expansion to our route network, it has certainly been a busy time. At the same time, we are fortunate that our long-term and excellent relationships with key suppliers and stakeholders has not been impacted adversely by the closure of our sister airline,” says Hinkles.

 

On the threat of more insolvencies happening in the regional landscape, Hinkles sees Loganair facing the same issues as everyone else in the sector – fuel and carbon emissions costs, the growing impact of the EU 261 customer compensation legislation, the worldwide pilot shortage and Brexit. “You simply have to keep evolving the business, changing to stay ahead of the tidal wave of costs flooding in.” 

 

Discussing recent work when it comes to other sides of the business, Hinkles says that, “one area in which we’ve made particular investments over the last two years is technology. We now have Electronic Flight Bags [EFBs] for our pilots (and cabin crew), we’re investing in new finance and HR systems and we have also undertaken a lot of developments on our customer website and communications, with a new app to go live in May. Despite being a relatively small airline, the customer expectation of technology is on par with bigger airlines that have IT budgets several times larger than our annual company turnover. “You can’t say to customers, sorry, we’re only a small airline – we don’t have that facility. So, we have done a lot of work to build systems and processes which work really well but at a fraction of the cost of the big airlines. We’re already seeing the benefits of this both in our cost base and in our customer service performance, which is very strong.”

 

New agreements

One of Loganair’s important initiatives is the airline’s ‘Better Connected’ programme, which aims to provide the carrier’s key destinations with a wide range of easy-to-access international connections. In October last year, as a new addition to the ‘Better Connected’ programme, the airline announced new interline agreements with Qatar Airways and Emirates. In addition to these, Loganair has a codeshare agreement with British Airways and interline agreements with large international carriers such as Turkish Airlines, Air France and KLM. These agreements open up the global destination networks of those airlines to Loganair’s passengers, allowing them to travel with their luggage on one ticket and have the added advantage of being protected should their connecting flights be disrupted.

 

The agreements have also resulted in an increase in international passengers for the airline and according to Hinkles, interline and codeshare bookings now account for around 10% of the airline’s network total. “We find that the ‘holy grail’ of these relationships is having connecting flights available via the international airline’s website. Interline or codeshares reliant only on traditional GDS distribution channels are not nearly half as effective at generating traffic as those which are also distributed online. We’re adding new relationships with United Airlines and Aer Lingus this year too. These connections are incredibly valuable for providing worldwide access to the regional markets we serve, particularly in the Highlands and Islands of Scotland.”

 

Southern addition

One of the latest developments for the airline saw Loganair’s first ever flight from Bournemouth Airport take off in late April, featuring a tartan branded 37-seat Embraer 135 Jet and with the short journey to Jersey taking only 45 minutes. To mark the occasion, passengers were treated to an ice cream by the airline, which was served from a Loganair branded ice cream truck. Once the flight landed in Jersey, the aircraft was greeted by a water cannon salute. Loganair will provide three flights per week between southern England and Jersey in the Channel Island, seasonally until 4 October. The airline also commenced weekly flights to nearby Guernsey on 13 May.

 

In addition, in mid-May the first Loganair flights between Aberdeen and London marking the airline’s direct services to London Southend Airport. Hinkles says: “Air connectivity with London is incredibly important for the North East of Scotland where there has been significant capacity reduction to other London airports of late.

 

“We’ve specifically created a schedule which is optimum for those travelling for business during the week, with day-return schedules in addition to our frequent flyer programme.”

 

The impressive route network, planned work and all the new developments are certainly keeping Hinkles and his team very busy. However, growth is something that isn’t going to slow down for the ambitious airline. Touching on how Loganair can expand further in the currently challenging aviation market in the UK, Hinkles sums up the airline’s plans: “After very significant growth over the last 12 months, we’re focusing now on our growth taking place in established markets where we can develop an already-strong presence. We already serve more UK airports than any other airline – and are now the fifth largest UK airline by volume of flights – and there’s plenty of scope for us to grow by undertaking more flying between destinations that we already serve. This will help us to build our brand presence, keep marketing costs to a reasonable level and concentrate our buying power with airports, ground handling agents and the like.”

 

These days, navigating through the regional airline sector is turbulent, but by all indications Loganair seems ready weather the storm.


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