Article

The stopping of the EFly Catania route – some commercial aspects Matthias A. Merzhäuser 19 November 2009

The stopping of Efly’s route between Malta and Catania had led to some issues being exchanged in the press. In the following, we will not look at these, just at some purely commercial aviation ones. The delayed start A very bad thing for Efly should have been the taking up of scheduled services only in September due to the full licence issue taking quite long. July or at latest August should have been highly important with the Italian market (Ferragosto). Efly could have entered the market with a bang, with attractive offers (which some other carriers did not exactly have) in the right season. Missing this meant no injection of good revenue and an establishment in the market during initial start-up period. Competition Basically on the same day that Efly’s tickets went on sale, Air Malta’s fares dropped quite a bit to par. Also Virtu Ferries, who also operate to Catania, soon provided special offers. Virtu can only achieve a low utilisation on the Malta-Sicily route simply because the market is so small. It is not a situation like in the British Isles where one can keep the ship busy many hours with high utilisation and volume as the market is big enough, although low-cost airline shuttles are taking their toll also on catamaran operators there (see SeaCat). Particularly before Efly the fares were, let us say, not give-away, also for foot passengers booking no excursion. Yet one has to appreciate that it is operated by fast new catamaran, and that, as explained, a very small market means both low utilisation and loadfactors meaning according cost-splitting. The ferry service is indispensable for the Maltese economy. Air Malta has developed Catania as a stopover point for underloaded frequencies to some airports, like Geneva and Gatwick. Without the Catania stops, where one delivers/loads up additional passengers between there and the northern place, these according frequencies would be totally not viable (as pure point-to-point), at least with the current fleet, and thus Malta as destination would lose these flights because the plane would then just remain parked in Malta. The Malta-Catania leg is filled with some point-to-point passengers and if some revenues of these go missing, the flight would be pushed more towards the margin. During the peak period, from June, one had also had Italian low-cost airline Windjet operating Catania-Malta, during the midnights Friday/Saturday, Saturday/Sunday and Sunday/Monday, selling all seats at EUR39 all-inclusive. The flights stopped after the peak season, because then natural demand ebbs down. And then there is the locally pampered Ryanair. Their year-round Trapani service not only directly impacts the (seasonal) Air Malta Palermo run for the western Sicilian market, but is also an alternative for people travelling without heavy luggage from/to central Sicily, from where it does not matter if one goes to Catania, Trapani or Palermo. Pricing So Efly started off with its great initial offers, with very customer-friendly luggage rules, special offers for groups (free van) and so on. But then came one-way fares for an all inclusive price of EUR160, EUR320 return, when one booked in mid-October for end of November, and even for end of February, when fares are usually lower. Malta-Catania is a 200kms sector. A problem was surely the fix cost-splitting on so few hours per day. Binding the plane in Malta with a double daily Catania hop took away the flexibility for ad-hoc charters/acmi-leases. The London luxury low-cost flight Then there were the proposed London-Gatwick services. As such, these could have been flown in between the morning and the evening Catania flights. Now the BAe 146-300, Efly’s aircraft type, has, at a payload of 112 passengers, a range of 1,960kms. With a 100 passenger load, this came to 2,180kms, in presumed still air (manufacturer’s data). The northbound sector generally sees some headwind. This means the Malta-Gatwick non-stop distance was beyond range limit. So one would either have to make a fuel stop enroute at best where there is potential to both Malta and London, or operate with a payload restriction. A regular payload restriction might have been communicated/marketed as “luxury low-cost flight” with some less passengers (less payload; and for this more fuel weight) onboard: getting some premium passengers for a business class revenue, saving the weight of tourist class passengers and definitely sounding better. The aircraft Generally the BAe 146 has a quite high specific (per passenger) fuel burn and maintenance costs, and on longer sectors is a bit slower (productivity, crew costs). At least with the -300 model one might spread cost over more seats than with the shorter -200 and -100. The -100 is actually basically the locally notorious Avro RJ70; however the Avroliner models had somewhat longer lasting / less problem-prone engines, a modernised cockpit, and newer cabin design. So with the not so great economics and many used planes parked, leasing/purchasing costs are very low. And this makes the type more attractive for firms that have the plane less in the air, like acmi-firms. Here is a brief overview of the Efly plane: Built in 1991, it spent some time as engine testbed for the engines of the updated Avro-branded model, and then was stored. From 1995 to 1999 it flew regional services in Taiwan. After a few months of storage back in Europe, it came to a firm which soon ceased operations, parked from 2000 onwards. In 2002 it came to a firm with another name but became impounded apparently due to issues of the previous firm. It was parked until 2003 when it was leased to British low-fare airline FlyBE, where it flew until it was retired in mid- 2008, since FlyBE replaced all Boeing 737-300s and BAe146-300s with efficient Embraer 195s. The red fuselage hails from its last months with flyBe where it served as flying billboard for an internet gambling firm. So the plane is 18 years old, but much younger when it comes to use. A history of economic storage is nothing totally unusual with BAe146 type planes. Malta had the ex-Air Malta Avro RJ saga, which offers quite enough material for another article. Generally, initial buyers had to write-off a lot of the resale value, compared to other jets. Mainland Italy? While London is definitely the biggest single market for Malta, it has a lot of competition. And it is, since a few years, an unlevel playing field, since unbelievable but true London had back then been declared a “new, underserved area”, to justify high subsidies for a certain low-cost airline. Now should Efly return to scheduled or serial charter services, given the aircraft’s characteristics, Efly’s strong Italian identity and possible contacts there, maybe it would be better if one would look more at the Italian market rather than London. During summer, in Italy, the only areas that are not covered are Napoli and Pescara, the latter a potential Ryanair route. Napoli is only 500kms away from Malta, and, while generally not wealthy still with a large population potential. One might also offer some Rome or Milan area flights during peak summer. For any Italian route, the trip costs are much lower than for a UK trip, and the length of trip more in tune with the intended design purpose of the jet of short flights, in case of regular flights. For contract work beyond the EU, given that Maltese-Libyan Medavia is since a long time in business within Libya, maybe this market could also offer further opportunities for Efly.