FLUG REVUE June 2006: Hamburg International covers for the niches

June 2006

HAMBURG INTERNATIIONAL – THE LAST „CLASSIC CHARTER AIRLINE“

By Dierk Wünsche

Hanseatic caution combined with commercial open-mindedness: these are the qualities with which HAMBURG international Luftverkehrsgesellschaft mbH & Co. Betriebs KG (HHI), whose headquarters are in the Hanseatic city of the same name, likes to describe itself. Christoph von Saldern, Norbert Grella and Klaus A. Schlichtmann, who together founded the company in 1998, are proud of how successful their idea of a “Hanseatic airline” which sees itself as an externally cautious, pure service provider, has proved. During the same period, several other German charter airlines have slid into the red.

“We are the last remaining classic independent charter carrier on the German market,” says Grella in an interview with FLUG REVUE. The three shareholders, von Saldern, Grella and Schlichtmann, between them own 36 percent of the equity, the biggest individual block of shares amongst the owners of HAMBURG international.

In 2005, some 560,000 passengers flew onboard the present fleet of six Boeing 737-700 aircraft, each of which offers 148 seats. Even if the last business year was not as successful as had been hoped in comparison with the previous year, the airline still finished the year with a profit and the management trio of HAMBURG international are quite satisfied.

“Like all the other airlines, we suffered enormous pressure due to the hike in kerosene prices,” says Grella, who, like his colleague von Saldern, is also still regularly to be seen at the control horn in the cockpit of an HHI Boeing. The two men originally acquired their piloting skills with the Bundeswehr and later worked as pilots for the regional airline Hamburg Airlines, which was owned by the steakhouse entrepreneur, Eugen Block. When Hamburg Airlines suspended operations in 1997, Grella got himself a job with Air Berlin, while von Saldern joined the Belgian-UK low-cost airline Virgin Express. It was during this time that they came up with the business idea for HAMBURG international.

Technical maintenance and checking of the fleet is largely in the hands of Lufthansa Technik AG, with which HAMBURG international has had a “Total Technical Support” service contract right from the start. On the other hand training and periodic performance monitoring of the pilots is partly carried out in the facilities of Lufthansa Flight Training.

“We have never thought it particularly important to flaunt our logo throughout the world. Instead, we prefer to fly in the name of our customers and we exercise Hanseatic restraint in publicising our own brand,” says Grella, explaining the self-image of the airline. Thus, HAMBURG international charters its aircraft as entire units flown by tour operators such as Thomas Cook, TUI, Eurokoha, REWE Touristik, alltours, Wolters and Öger Tours.

As Grella puts it, “We are simply there for all our customers. HAMBURG international is a classic charter carrier and not a no-frills airline, and we don't offer individual seats either. Depending on the requirements of the tour operator, our passengers are given a full hot meal on flights of over two hours' duration. On shorter flights our flight attendants serve a snack. We wanted from the beginning to enter the air travel market with a “risk-free” business idea. To this end, we adapt ourselves to our various customers. If required, we can even paint our jets entirely in the colours of the customer. Under our concept, we operate comfortably within the limits of an air travel business field of a certain size that we do not want to exceed. Since we commenced flying operations, we have had to endure all the aviation crises like 11 September 2001, the Iraq War and all the rest, and we have emerged even stronger. Taken together, this has welded everything together and made us inventive rather than arrogant.”

Grella still recalls the early days of HHI vividly: “Between the founding of the company in the summer of 1998 and March 1999 we underwent an intensive preparation phase. Our first, brand new Boeing 737-700 was delivered in April and regular flying operations were able to commence according to plan. We started with four captains of our own plus one reserve pilot. With these resources, we flew our first flight schedule for a few customers without major delays. On this account, the tour operators placed further contracts with us.”

Today the company has a workforce of 250, and in the summer schedule of 2006 the airline will be seen in all the major Mediterranean holiday hubs like Egypt, Turkey, Greece, Spain and Cyprus. On top of these conventional destinations, Constanza in Romania and Burgas in Bulgaria are also in the 2006 flight schedule. Its more unusual summer holiday destinations include Alesund, Bergen, Tromsö and Bodö in Norway. Even Lourdes, the French place of pilgrimage, enjoys regular services at the hands of the Hanseatic airline.

In addition to the pillar of tourism, the airline is also expanding its “ad hoc” charter flight activities. These account for around 18 percent of its business. The flights are operated on behalf of agencies, specialist tour operators, companies, sports clubs, other airlines and even private persons. Naturally the proportion of business accounted for by this sector is somewhat greater in the winter season than in the summer when tourism peaks.

Last winter the airline also flew ad hoc charter flights to Iraq. Director Grella explains. “We have already been flying from Frankfurt to Erbil airport, in the Kurdish part of Iraq, for over six months. This service, which we provide for a tour organiser, has not presented any problems as far as we are concerned, and utilisation has been high.” The crew do not stay overnight in Erbil, as the aircraft concerned fly on to Dubai in the United Arab Emirates. The connecting flight time is about 90 minutes. These flights too enjoy high utilisation and are largely taken up by passengers from the region who work as guest workers in the Emirates. The crew is then changed in Dubai prior to the return flight to Germany via Erbil.

As well as the ethnic traffic, many businesspeople from the USA apparently also use the Erbil flights. “You have to remember that the region around Erbil is an industrial province with a huge potential in raw materials. 2,000 engineers from the USA alone are working there. When we first started this service, we put together the crew, and especially the air hostesses, for the Iraq flights on a voluntary basis. But security concerns and cultural and religious issues have since receded into the background.”

Over the last seven business years the Hamburgers have accumulated a wealth of experience of unusual destinations and charter contracts. Thus, for example, for two years the airline flew three times a week to various airfields in Kazakhstan bringing ethnic Germans from Russians back for holidays in the former homeland. Then there have also been business charter flights to the Congo to fetch oil-drilling personnel working for Shell back to the UK. Jobs like this are a welcome change for the pilots, and also for the flying directors of HHI.

HAMBURG international has even flown on almost the opposite side of the globe, in the southern hemisphere. Equipped with a Chilean Air Operator's Certificate (AOC), an HHI Boeing 737-700 staffed by HHI aircrew flew South American passengers from Santiago de Chile to destinations in the Caribbean, up to nine flying hours away. The “Hamburg Chile” airline, as it was known, would land after a refuelling stop in Guayaquil, Ecuador in the airports of Punta Cana, Varadero, Ciego de Avila, Cancun and Isla Margarita.

Other destinations which rank as unusual have included Accra in Ghana, Cape Town in South Africa and Colombo in Sri Lanka. Whether it is to transport wheelchair-bound pilgrims to Lourdes, promotional flights for a car manufacturer, UN flights or private charter flights to a wedding in Copenhagen with bride and groom decked out in full bridal attire on board – the airline is open to unusual requests.

When the air forces of several European nations were searching for a new maritime patrol aircraft type with antisubmarine warfare (ASW) capability and the US aircraft manufacturer Boeing was proposing a military version of the 737, it was a leased aircraft from HHI which they used to demonstrate low-altitude flights over the Mediterranean in the mission spectrum of an ASW aircraft.

HHI's third important business area lies in Kosovo, for HHI is the local, UN-appointed national airline, operating there under the name of “Kosova Airlines”. HHI won this contract against eleven competitors under a tender staged by UNO. The company already had some experience of operations in Kosovo from flying guest worker flights to Pristina.

Today HHI is the number one airline in Pristina and last year carried around 120,000 passengers. HAMBURG international maintains its own station with engineers at the airport for the aircraft deployed in Kosovo, which flies in the colours of the Kosova Airlines tour organiser. Its cabin crew also live directly in Pristina. “HAMBURG international's success in establishing itself on-site is evident from the fact that it is now viewed by the population as 'our airline',” says Grella. In the 2006 summer flight schedule, flights with HHI flight numbers will be operated from Pristina – on behalf of Kosova Airlines – to Düsseldorf, Frankfurt, Stuttgart, Geneva, Göteborg and Zurich, and the connection to Switzerland is even daily.

Like Air Berlin before it, HAMBURG international is planning a fleet renewal programme which entails moving away from US manufacturer Boeing to Airbus. Between 2008 and 2009 it will take delivery of 14 new A319's equipped with 150 leather seats and emergency exits on either side over the wings. Of these, ten A319's will be operated under HHI's own AOC, although two of them will be painted in the colours of another brand. Four additional aircraft are planned for a “niche project”, the details of which have not yet been disclosed. The airline has options for six further A319's.

Its Boeing 737's will gradually be returned as their leasing contracts expire. The single 737 which HAMBURG international owns directly is to be sold by 2009. Norbert Grella explains, “The Boeing 737 brought and still brings a lot of success for us. We would have been happy to continue working with Boeing, but Airbus was more cunning commercially and took greater pains to win the business. The overall package that Airbus offered us had a slight edge over Boeing's. As a result, we Hanseatics will in future be flying an aircraft built next-door in Hamburg-Finkenwerder. We are convinced that our fleet upgrade to the A319 will meet with the approval of our customers, increasing passenger comfort and flexibility in the service we provide to our niche markets.” The fleet replacement programme is to be financed partly from the company's own resources and partly through partner banks.

In 2008, which will be the tenth anniversary of the foundation of the company, HAMBURG international should then reach the final stage of expansion with a workforce of between 300 and 320, 10 to 15 percent of whom work in administration. The number of staff working in the engineering area and onboard is to be further boosted. The company reckons to have around 30 staff for each jet.

The change of aircraft manufacturer is to be accompanied by a change in the external corporate identity, thanks to a change of paintwork on the new jets. Up to now the fuselage colours have been a nondescript white-grey and, whether intended or otherwise, they have been based on the image of Lufthansa. In future, however, the typical Hamburg colours of red and blue will visually dominate the lower segment of the fuselage and also the engine nacelles. The emphatic logo on the tail, the stylised cirrus clouds at sunset on a blue background, will now be clearly visible on the engines and the inner side of the wingtips as well. On top of this, the blue-ochre logotype on the fuselage is to be visually enhanced. “HAMBURG-international.de” will appear there, in blue and a powerful red. The identification of the airline with the Hanseatic city will now be externally prominent too. True to its name!

From page 28 of FLUG REVUE 6/2006

Last updated 10 May 2006

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