‘Avant-garde’ airline makes long-haul look easy

Date: 03/07/1997

By Leyla Linton

ALAIN Skowronek, general manager of City Bird, makes it all sound so easy.

The long-haul airline which started operating just ten months ago has next to no competition, no complaints about the running of Zaventem airport and no problems with the Belgian authorities.

In fact, it is a struggle for Skowronek to find anything at all to complain about. It would seem that running the airline is as enjoyable as sitting back in its comfy seats and enjoying the magician's show organised for the children.

The reasons for this are simple, according to Skowronek.

City Hotels, the majority shareholder in the airline, founded EuroBelgian Airlines (EBA) in 1994 with a mere 1.2 million ecu of capital. Just two years later, it made a tidy profit by selling EBA for 45 million ecu to the Virgin group, who turned it into Virgin Express.

“It was an opportunity that arose and we seized it,” explains Skowronek, who is gushing about Virgin Express - his former employer.

“Now they have problems, everyone has problems. What I am sure of is that they have a jewel. It is a diamond which they now need to exploit, but I think that they have an extraordinary product and very, very low costs. I am convinced that Virgin has the potential to be the premier low-cost European airline,” he says.

Jonathan Ornstein, chairman and chief executive officer of Virgin Express, who has complained vociferously about airport plane handling monopolies and the problems of operating in Europe, would perhaps not be entirely grateful for this unsolicited vote of confidence.

Nor would he be happy to hear that, unlike Virgin Express, City Bird has no problem getting slots and no problem communicating with the Belgian authorities.

However, thanks to a non-competitive clause in the sale contract of EBA, he can be sure that at least City Bird will not start up any short-haul flights - for the moment.

City Bird has been quite content to abandon short-haul, realising that long-haul is where the demand lies.

Before it began operating, there were few long-haul direct flights out of Brussels, except to destinations in Africa and some to New York. There were up to 11 flights a week leaving London for California or Florida, but none at all from Zaventem.

Choosing its destinations in conjunction with the leading Belgian tour operator Neckerman, City Bird decided to launch services to New York, Miami, Orlando, Los Angeles, San Francisco and Mexico City with just two planes.

To minimise the risk, it operates triangular routes where possible, such as Brussels-Orlando-Miami-Brussels.

The airline's ambitions are on a modest scale. Next year it hopes to double its fleet to four planes, but before adding extra destinations it plans to start flying 'point-to-point' to individual cities.

The company is in the early stages of examining new routes in the US area, which was chosen to keep costs down because it already has a reservations office near Washington.

Both City Bird and Virgin Express have very similar corporate philosophies. They seek to stimulate market demand by keeping costs to a minimum and selling as cheaply as possible to as many people as possible.

Skowronek emphasises productivity and flexibility. “We try to hire people who are very flexible. We have people who do reservations, and some days they do the check-in, ticketing, boarding, or lost and found.”

It sounds like an American approach, but Skowronek shies away from the word 'American' and calls it instead an “avant-garde philosophy”.

“If you want to succeed today you have to have new ways of working,” he says.

But he is frustrated that the company's success in creating jobs for Belgians is being threatened by high social security costs.

“Look at Ryan Air which is based in Ireland where social costs are lower. They have a competitive advantage,” he says, warning: “It is essential that our dynamic process can go on and that at one time or another we are not thwarted in our expansion.”

If you gave Skowronek a magic wand, the social costs would disappear. “Hiring Belgians is very, very, very expensive,” he complains. “It is always the same vicious circle.”

He is reluctant to talk politics, but says: “Someone who receives 1,000 BEF costs the company 40&percent; more than that although his take-home pay is 550 BEF. The figures speak for themselves. Today it is vital that everyone in Europe realises that this is a problem.”