LONDON – Fly Atlantic is the latest UK start-up entrant into the long-haul low-cost market. AviationSource got to sit down with CEO Andrew Pyne.
About Fly Atlantic & CEO Andrew Pyne…
Last week saw the carrier announce a launch date of 2024, with the carrier aiming to rejuvenate operations out of Belfast International following the withdrawal of Virgin Atlantic some time ago.
Pyne said that he aims to start with a fleet of six aircraft, with this growing to 30 aircraft by 2034 and handling anywhere between 6-8 million passengers per year by then.
With there being no transatlantic links from Belfast currently, Pyne believes that he can make this work for the airport.
Pyne has been in the aviation industry since 1979, having started out life as a Commercial Officer for British Airtours.
By 1983, his work changed over to Economic services when working for the Hong Kong Government for 13 years.
By 1997, he became the GM IAF at Cathay Pacific for seven years before launching his own airline, Viva Macau Airlines, in 2004.
When the airline went bust in 2007, he moved over to Avianova in Moscow as the CEO and remained there for four years.
The 2010s was when his career expanded into many different areas of the aviation world.
2014 saw him take on the role of Director of International Operations for VietJet Air for six months, and then became the CEO of Cobalt Air by February 2015.
During that time, I interviewed Pyne for another outlet, of which you can see the analysis piece here.
Pyne then served in the role until September 2016 before becoming a Senior Adviser of Strategy at WOW Air for nine months.
From there, he moved over to the Maldives, becoming the Chief Operating Officer for Mega Maldives before heading back to Cyprus with Concuros in an Aviation Consultancy role.
In January 2021, he became the director of Channel Airways, which has then turned into Fly Atlantic, has started preparations for the carrier in January 2022.
We sat down with him to pick his brain on how the airline can produce success during a period of uncertainty for the industry.
Feature: A Sit-Down with Fly Atlantic CEO Andrew Pyne
JF: Andrew, thank you for sitting down and taking the time to speak with AviationSource. For those that haven’t heard the news at all, can you give me an overview of Fly Atlantic and what your aims and goals are ahead of your 2024 launch?
AP: Absolutely, James. Fly Atlantic is a low-cost, transatlantic airline. We’ve chosen Belfast International as the hub airport after quite an intensive selection process, looking at around 10-12 airports around the UK and Ireland. Our aim is to develop Belfast as a hub with feeder services from the rest of the UK and from Continental Europe. We will aggregate the traffic and then take it onward.
In terms of aircraft choice, this is still, to some extent, up to grabs [from the manufacturers]. We are looking at the Boeing 737 MAX and Airbus A321neo. We have been talking to both manufacturers. In fact, yesterday (November 24th), I had a meeting with Airbus in London. What we can say is that we know there’s availability for 2024, and we understand the timelines associated with getting aircraft ready. By then, we would be looking at least six aircraft.
But by the very nature of these aircraft types, which have come recently on the market, we’re looking at pretty much new or factory-fresh aircraft. I think those are the core elements of our business plan.
JF: From what you have touched upon there about Belfast, how did the airport stand out to you as the one to select out of the 10-12 airports, especially when we have seen long-haul carriers pull out of the airport in the past?
AP: I think the issue there is that the business model was very different back then. It was very much more of a point-to-point model, and we’re clearly moving away from that approach. What stood out in Belfast would be the attitude of the airport owners, Vinci, and the sorts of commercial terms they were prepared to put to us.
But there were other factors as well, of course, including the reliability of the airport weather was an important consideration so that we could operate and be confident in doing so 365 days per year without undue disruption. Coming back to VINCI, their commitment to invest in facilities specifically dedicated to and designed for the Fly Atlantic model encouraged this decision.
Also, the fact that we’re not facing direct transatlantic competition out of Belfast was another major benefit. Locally, the strong support from the government, local councils, and other entities were very welcoming. To be honest, James, it wasn’t even close, you know. Belfast was a clear front runner, with a substantial catchment area to work with, is on our doorstep, and is currently unserved in the transatlantic market and many European markets as well. So those are the key factors.
JF: Looking at Northern Ireland politically, we know that there has been a lot of instability with there being no functioning government. In terms of the local regulatory and national regulatory perspective, does this worry you at all, especially with such a tight launch deadline of 2024?
AP: Not much, to be honest, James, because we have political support across the spectrum. If you look at the messages that were issued regarding the government shutdown in Northern Ireland, you will see that Sinn Fein, Democratic Unionists, and all the major political parties were coming out in support of our project.
So, this is not, you know, in any way a sectarian project or a single community-based project. It appeals to the entire spectrum. We’ve had particularly good support from Abbey Barr Council, who have been involved in the project since we selected Belfast and have been very supportive. When you talk about the local regulatory regime, there isn’t much to worry about, as it is all done on a national level through the Civil Aviation Authority and the Department for Transport.
We’ve been in contact with both parties over our plans. The short answer is that it doesn’t worry us too much. I think where it has had a potential impact, of course, is the perception to investors of political deadlock. We’ve had to do a little bit of handholding on that front, but from my own perspective, it’s not a particularly important factor in all of this.
JF: Coming back to the sort of aircraft types that you aim to use for such services, have you got any indication yet of the sort of roots that you want to serve across the pond?
AP: As you can understand, I’m not able to share those routes with you today, James, for obvious reasons. We don’t want to give a roadmap to the competition, but to be honest, when you look at North America, and you look at the range of the aircraft we aim to use, it doesn’t take a mastermind to work out which cities we are looking at.
It’s an interesting question, of course, because there’s a definite philosophical divide here between these low-cost airlines that fly into primary airports and those who go for the secondary options. I would say we’re tilting more towards the primary airports because if you look at what we’re going to do in Europe, and indeed the rest of the UK, we’re going to be looking at a network that’s really built on secondary cities in the sense of those that are either unserved or underserved in terms of transatlantic flights.
So, if you’re looking at aggregating traffic from those types of cities, then it makes sense to funnel that traffic into primary airports on. On the North American side of the network, this is because we won’t have our own feeder network in North America, so we won’t be able to replicate the sort of network we’re putting together going east from Belfast. Therefore, you want to hit primaries rather than secondaries, where there are very limited interline opportunities. I’m talking in generalities rather than specifics, but I think you would understand why I must do that.
JF: Based on what you have said, then, I take it that the airline is open to potential code-sharing opportunities later down the line.
AP: Indeed. We’ve had some very preliminary discussions with potential feeder partners in the UK. What I’m always worried about is when codeshares give rise to complexity and large additional costs through systems integration and so on. We want to keep it as simple, basic, and customer friendly as possible. It should be noted that Belfast has committed to creating a connectivity gateway at the airport. So that will also be helpful in terms of lubricating connections through Belfast International. I think it’s a mix of issues and a mix of elements here.
What we do know is that our own feed and network will be very strong, and based on my experience with transatlantic low-cost, that’s critical if it’s going to work. Secondly, we will have “do it yourself” connections through NDCs, with people using the likes of Kiwi or Dohop to build their own connectivity. Then, thirdly, we’ll have some formal arrangements in place with partner airline feeders, potentially both in the U.S. and Canada, as well as in Belfast.
As mentioned, I think the most important stream would be our own feed. Based on my experience at WOW Air in Iceland for a year, I could see what they were doing right and what they were doing wrong. And I think one key takeaway from the WOW experience was that you must have your own feeders, and those are very critical to success.
JF: My next question is surrounding the kind of start-up carriers that we’ve seen in the UK as of late. As you know, Hans Airways has gone into restructuring. We understand there is a load of financial and regulatory hurdles to get through. Do you believe Fly Atlantic is well prepared to get over such hurdles that you may foresee over the next two years?
AP: Well, that’s certainly the intention, James. We’ve invested a significant amount of money in the project to date. I’ve said earlier that we’re looking for partners to take the project to completion, and that’s an ongoing process. The critical thing about this business is that you don’t under-capitalize, but you also don’t over-capitalize either. It’s critical to get the amounts right and correct so that you have a sustainable business going forward. Everyone knows that in this environment, it’s challenging, of course, to raise funds, but I’ve done it before in several start-ups. I’m confident that we’ll find our own partners going forward on this project.
There is confidence in this project, and its sellability and marketability underline this as we have a team in place putting the money into the project to date. So yeah, we’ve got to get the numbers right, and we’ve got to be well prepared with deep pockets for what’s going to come to us in a highly competitive market. I’m confident we’re going to get there, and I’m confident that we will get there by the timelines that I’ve sketched out.
JF: The UK is currently in recession and is expected to be in the same position for the next two years. I am wondering whether that is a concern for you, especially in the start-up process of Fly Atlantic.
AP: I think it’s an opportunity. In recession and times of economic pressure, people are looking for value for money, and they’re certainly looking to trade down in terms of their travel options in many instances. I think the point has been made regarding low-cost short-haul travel. We’re targeting both the business and leisure markets, and I think we’re there to demonstrate to people that if they want to cross the Atlantic cheaply, safely, and reliably, then we are their best options.
It works both ways as well, of course. We’re not just about the UK. Whilst it will be an important slice of our market, you’ve got to look at it in terms of North America, the strength of the U.S. dollar, and the attractiveness of the UK and Europe as travel destinations out in North America.
You must look at different European economies at different stages of the economic cycle. So, I would say we have strength and diversity as well. We will be across many different markets. We do know that the UK will provide a very substantial slice of our total traffic. There’s no doubt about that.
JF: You previously touched up the 737 MAX or the A321neo as an aircraft of choice. Obviously, these aircraft are more fuel-efficient than previous-generation aircraft. Is sustainability playing into the soul of Fly Atlantic, especially when net zero by 2050 is on everyone’s minds now?
AP: Yes, that’s certainly been a big consideration. Part of this project consists of our intention to establish a green aviation technology center in Northern Ireland. We’re acutely conscious of the pressures that are coming in that direction.
As for aircraft type, absolutely. You know, those sustainability issues have been factored into that. But I think there is also a strong economic argument, of course, for the narrow-body aircraft on the transatlantic market. Back in 2017, when I was at WOW, Barclays Capital did a very good study about how low-cost long-haul could work and how it could work specifically on the transatlantic market. That study pinpointed the arrival of new generation narrow-body aircraft as the key factor for success.
I found the arguments compelling in 2017, and they certainly look even more compelling today. If you look at what’s been happening in terms of oil prices and so on, you know that the arguments for sustainability are going to intensify, especially on the economic argument too. There is also a market size argument here because when you boil it down to the essentials, Belfast is not London, Paris, or Frankfurt. It’s a relatively small market on which to base a large transatlantic carrier; it’s not economically viable. It’s better to have a 180–200-seater aircraft.
If you are putting 777s or 787s with no strong feeder to rely on, it’s going to be a struggle. I think in the past, many of those projects, if you like, only went short-term because of government subsidies. They couldn’t develop a long-term stable platform for air services to Belfast. With us, it’s a different model and a different approach to that market.
JF: It’s an interesting point you raised about the short-term aspects of long-haul. Do you believe that Norse Atlantic Airways and others can survive in the long term, especially after the downturn that Norwegian Air experienced in a short period of time?
AP: It wouldn’t be appropriate for me to take potshots at competitors. When I look at our competitors, however, I understand their strengths and vulnerabilities. There’s no doubt they would, in terms of Fly Atlantic. I’m more focused on ensuring that we get our model right and that we have learned the lessons of WOW Air, in particular, in terms of how we executive this model to make sure we don’t repeat those mistakes.
I mean, there’s certainly room for several transatlantic low-cost airlines, so I’m not implying there’ll only be one man standing at the end of the game. I think we can coexist, and we can prosper in the same way that you have several successful short-haul, low-cost airlines in Europe. The WOW experience is clear to me in terms of what needed to be fixed. And I’m not sure that the other players in the market have really addressed those issues at this point.
JF: Looking to the future, where do you see the airline in 10 years, so let’s say by 2034?
AP: Talking specifically about Fly Atlantic, I would expect us to be at the stage of around 30 aircraft, carrying something in the region of 7-8 million passengers. We’ll probably have others based in addition to Belfast. Belfast would be the primary hub, but I think we’d be looking, at some point, the point-to-point services across the Atlantic as well, at that stage.
I would expect to see others competing in the low-cost space across the Atlantic, maybe two or three more competing for market share there. I would think low-cost airlines in the North Atlantic market would certainly be commanding more than 10% of the total. You know, pre-COVID, the numbers were looking quite strong. I think the peak was around 8%. I think in 10 years’ time, you’re probably going to be looking more at something like 15-20%.
So, a much more significant market share overall. Some of those carriers, of course, like ourselves, come from the European side, but we’ve seen JetBlue coming into the market from the U.S., and I would expect others to follow. So, in summary, I think more low-cost airlines will be seen in the transatlantic space, with us having a big market share too. Those would be the sort of numbers I’d be looking at. I would also want a sustainability profitable airline as well by that stage, which is the holy grail and the most elusive part of the equation to date.
JF: It’s interesting what you say about the low-cost long-haul market share increasing. Do you feel that this is going to be a threat to legacy carriers over the next 10 years?
AP: It will change the way in which they operate. I mean, we have seen that revolution play out in the short-haul market, and I think the same sorts of issues will arise with long-haul, except there will always be markets where low-cost airlines won’t penetrate. This is because of the stage length involved or the size of those markets. I would be surprised, for example, if you saw the low-cost competition on UK-Australia flights as the strength of the Gulf carriers in that market alone makes it very difficult for a low-cost airline to jump in there. The legacy carriers will need to adjust and adapt.
I think they will unbundle more of their products. They’ve survived short-haul competition from low-cost airlines by adopting a different approach. I’m sure the same will apply to long-haul as well. To be honest, James, I’ve always been a believer in long-haul low-cost because the very first airline I set up, Viva Macau, back in 2007, was effectively a long-haul, low-cost operation. It flew Boeing 767s, and we were flying from Macau to Australia to the Maldives, Japan, and places like that. It worked to a point, but the reason that the airline finally failed after several years of quite a successful operation was that it wasn’t allowed to access the China market.
The China market was closed to it, and that made it very difficult where it was operating just off the enclave of Macau, which had 600,000 people living there. But you know, for a period, it was successful, and certainly the period during which I was involved, and I was the CEO, was successful. So even back in 2007, I had a belief in the long-haul, low-cost model, and now this is an opportunity to translate that into a different market. I’m very excited by the opportunity.
I think out of all the start-ups I’ve been involved in, which is around five or six, this really is the most exciting from my point of view in terms of potential and the story behind it.
JF: Is there anything else you would like to say to our readers regarding Fly Atlantic?
AP: I think the key point here is that we are going to be offering value for money across the Atlantic. You know, we are out to demonstrate to a skeptical world that long-haul, low-cost can be made to work. I’ve seen a lot of the commentary after we made our announcement, and the negativity of a lot of the comments both depressed me slightly and also inspired me to make this work to prove those people wrong. And there are a lot of skeptics out there. The other point I’d like to add is the social-political dimension since you touched on it before, James. And I think that’s interesting in a Northern Ireland context because I was not the one who first referred to this project as a game changer.
It was a minister in the Northern Ireland executive, but I think it can genuinely be a game-changer for the province in terms of what it means for people’s lives, for the social life of Northern Ireland, and for the economic well-being of Northern Ireland. I think it will have quite a dramatic effect beyond job creation, but also in terms of boosting connectivity and establishing the status of Northern Ireland. So, I believe this is more than just an airline. It has resonance across the whole spectrum of social and economic factors within the region.
JF: Andrew, thank you very much for taking the time to speak to me and our readers at AviationSource.
Overall
There is a lot to unpack from this incredible interview with Andrew Pyne. As a follower of his track record over the past couple of years, he has used his experiences in start-ups to learn and implement better practices moving forward.
You will notice that he has looked back on a lot of his time in his very extensive aviation career, and I personally think that this could be the concept that brings everything together in terms of low-cost, long-haul travel.
A lot of skeptics are very confused with Pyne’s idea for Belfast as the primary hub for the carrier, but when you look at it, it does make sense. At times of financial downtime, countries need investment in infrastructure, and that is what Pyne is bringing to the table by opening operations at Belfast International.
His talks with VINCI on this do sound very promising, and it is something that we should keep an eye out for going into 2024. What is going to be interesting also is what Pyne chooses to go for in terms of aircraft. The fact he has already had talks with Airbus over the A321neo family does indicate a strong start from the European planemaker in this respect. With options for the LR or the XLR, Pyne will have more variety and choice in that regard.
I did like Pyne’s humble approach to the Hans Airways question, as it is becoming a theme within UK start-ups that they can’t get to the finish line and begin commercial operations. However, during the interview, Pyne did emit a feeling of determination and confidence to make this model work. And from what he has said in this interview, everyone should be excited for what’s to come in Belfast in the next two years, that’s for sure.
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