FLUG REVUE July 2004: Air Bourbon flies to Reunion

AIR BOURBON CONNECTS REUNION TO FRANCE

By Patrick Holland-Moritz

The founders of Air Bourbon cannot be accused of lacking in courage. In October 2002, in the midst of the global aviation crisis, investors from the French overseas département of Réunion founded a new airline. On 6 June 2003, scheduled services finally started up between France and the holiday paradise which most of us have never even heard of. Réunion, which has a population of 730,000, lies in the Indian Ocean between Madagascar and Mauritius.

Air Bourbon A340-200

The objectives of the young airline are clearly defined: on the route between the island capital of Saint-Denis and Paris, it seeks to contest the market shares of Air France, Corsair and Air Austral. A leased Airbus A340-200 plies the 10,000km route between Roland Garros airport, the larger of the two international airports on the island, and Europe.

Air Bourbon sees itself as a company run by people from Réunion for people from Réunion. As one would expect, the majority of the private investors come from the island and see its customer potential as primarily lying in the island population. This explains the company's name: conscious of tradition, they chose a name, Bourbon, which has historic links with Réunion.

Three times a week the airline flies from Réunion to Paris Orly and back again. Also on the flight schedule is a Saturday service from Saint-Denis to Lyons St. Exupéry. On the return flight from Lyons, Air Bourbon has been making an intermediate stop in Milan Malpensa since the beginning of April. Explaining the decision to go to Italy, marketing director Alain Albany says: “We want to further improve the aircraft utilisation by this means.” He was answering questions fielded by FLUG REVUE during an interview at Saint-Denis airport.

A workforce of 131 is employed on flight operations, including 63 flight attendants and 21 pilots. For financial reasons, Air Bourbon does not offer training to junior staff. “Such a small company has to rely on trained cabin crew and pilots,” explains Albany. Despite this, Air Bourbon collaborates with a technical college for gastronomy. As part of their training, 24 young people work as flight attendants on board the A340-200 for a few months.

The formula by which the airline defies Air France and the other competitors is extremely simple: comfort, service and friendliness. Even in Economy Class, Air Bourbon goes to considerable lengths to make the ten to twelve hours spent on board as comfortable as possible. A glass of champagne for everyone and a choice of two dishes on the menu are provided as standard, explains Albany, who himself worked in the travel industry for 22 years and thus believes he understands the needs of passengers. A seat pitch of 79cm including footrest is intended to make the time spent on board the A340-200 as pleasant as possible.

Passengers in the Business Class, known as the “Classe Bourbon”, enjoy an even greater seat pitch, TV monitors on every seat and extra service. To avoid the ticket prices rocketing, they have deliberately avoided a First Class section. The Airbus can carry up to 282 passengers, 32 of them in Business Class.

Air Bourbon feels it has little leeway over the pricing policy. “We can't reinvent the wheel,” says Albany, declining to wage a price war on the route between Réunion and Europe. The cheapest round-trip ticket currently costs about Euro650, a price which is actually loss-making. At the other end of the spectrum, a Classe Bourbon ticket costs about Euro2,300. Anyone in possession of a frequent flyer discount card can enjoy a 15 percent saving in Economy and 20 percent in Business Class. For Euro300, private people receive up to six of these cards, which they are allowed to pass on to friends and relatives. The cards are valid for 12 months from the first flight reservation. Companies too can benefit from a similar programme.

Over 80 percent of tickets are sold through the classic channel of travel agents. Sales over the internet or by telephone play only a minor role. Air Bourbon is represented in well-known reservation systems such as Amadeus, Galileo and Sabre. In addition, the French tour operator, Look Voyages, has a firm booking of 50 seats on three flights in the week. Evidently the gamble pays off. At the beginning of March, the airline welcomed its 50,000th passenger on board, a taxi driver from Paris. Albany is pleased with aircraft utilisation to date, which stands at 75 to 80 percent. The only unwelcome statistical hiccup occurred in September 2003, which experienced a temporary downward dip.

The company has a second base plank, freight. Up to 15 tonnes are transported on each flight in addition to the passengers. Most of the cargo is exotic fruits which are bound for the French market. To take charge of the cargo business area, a separate subsidiary was founded.

The financial objective appears quite realistic: Air Bourbon is aiming to secure for itself a ten percent market share on the Réunion-France route, the equivalent of 100,000 to 120,000 passengers per year. At the time of our discussion it was still too early for an interim financial statement, but management are hoping to break even in the year 2004 as a whole.

Meanwhile, in the boardroom, they are thinking about expanding the fleet. A second Airbus A340 could arrive in November. Which variant this would be, Albany leaves open. Perhaps, he surmises, an A340-300, which would then be able to carry an extra 40 to 50 passengers.

On the other hand it is clear that they are not very interested in Boeing aircraft. “After all, we are French,” says Albany with a laugh. But quite apart from the national pride, the leased Airbus, tail code F-OITN, which entered service in 1993, has been a great success. So far there have been no technical problems. The aircraft was in service with Air Tahiti for four years before being repainted in the Air Bourbon colours. In the event of a technical defect, Volare would make a substitute aircraft available. The Air Bourbon management has concluded a maintenance contract with Air France Industries.

They are also very happy with the Orly and Roland Garros airports. Orly is easy to get to and offers good connecting flights within France, Albany points out. He seems to have overlooked one disadvantage, namely that German (and other foreign) passengers usually arrive at Paris Charles de Gaulle and then have to take a time-consuming shuttle bus to get to Orly.

As well as expanding the fleet, there are other plans for the future. Thus, the Air Bourbon management has its eye on a third destination in France, possibly Toulouse. A stopover in Spain is another possibility, according to Albany. We asked whether Air Bourbon might at some point land at a German airport, so as to offer German passengers a non-stop connection to the holiday paradise of Réunion. In principle, yes, he says, but the immediate priority is further destinations in France and Spain. Nevertheless, they would like to become more international in the future and possibly offer a multi-lingual website. Until then, Air Bourbon will very likely remain as unknown in Germany as the holiday destination Réunion.

From page 34 of FLUG REVUE 7/2004

Last updated 11 June 2004

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