Last week was a pretty lucky one for me interview-wise. I got to pick the brain of Daniel Shurz, VP of Planning and Strategy for Republic on Tuesday, and was able to speak with Dale Moss, CEO of OpenSkies on Wednesday.
My first question was how the new route from Orly to Dulles was doing. Dale didn’t share any numbers in terms of revenue, but said that they’re off to “good start.” He also mentioned that the airline continues to build up market share in New York, and that he is “very pleased” with that route so far.
As we were talking about route performance, Dale noted that the airline needs to build up awareness. “I think for us, our biggest opponent…is that people don’t know we exist,” he said.
And that’s where the airline’s new money back guarantee comes in. I think it was a brilliant idea. Business travelers who are just learning about OpenSkies might not be willing to shell out the cash on a different product when they’re used to someone else. So toss in the money back guarantee, and the perceived risk of trying someone new goes away.
The promotion’s been running for nearly a month now, and Dale says only one passenger has asked for money back.
Our conversation then shifted to the next destination they would announce. There were reports earlier this summer that Montreal was the next route, though Dale said the city was not confirmed as the next destination, and just attributed the reports to the process of obtaining slots at Orly.
What Dale did say was that OpenSkies’ is in the final stages of research. The airline’s board will be meeting at the end of this month, and an announcement a couple of weeks afterward would be possible. (OpenSkies had orginally said in June that an announcement was coming during the summer.)
Dale noted that if it was a new US city, it would most likely have service to Paris. If the new destination was in Europe, then service would be to New York. He also called Boston “interesting and appealing,” and also ran off a list of possible European destinations including Germany, Spain, Italy, and Brussels, all potential places that Openskies has talked about before.
For history’s sake, OpenSkies had previously operated flights between New York-JFK and Amsterdam.
Photo Credit: OpenSkies
I was also wondering about OpenSkies’ fleet. Right now the carrier has four 757-200s, two from British Airways and two from the acquisition of L’Avion. The carrier operates double-daily service to Paris from New York, and five times weekly flights from Washington. So only three airplanes are needed. So what does OpenSkies do with the fourth airplane?
Dale told me that it creates some additional flexibility if on airplane needs service, for example. But he also notes that the airline has been doing a “tremendous” amount of charter work, which represents 8-10% of the airline’s monthly revenues, though those flights will decrease once the fourth destination launches.
We then finished up talking about the future of the fleet. In the short-term, the airline will be sticking with the 757-200, which Dale calls a “fabulous” airplane with good comfort and cost of ownership. I was wondering where future aircraft would be coming from, as British Airways is retiring its 757s. Dale said that while the BA aircraft are “great” they “weren’t designed for our mission,” noting that OpenSkies was unhappy ith the configuration of the exit doors, galleys, and lavatories, and that they had Rolls Royce engines (over Pratt and Whitney). The carrier will be looking at other sources for other used aircraft in the future.
Dale tells me Chicago is roughly OpenSkies’ limit range-wise, but the airline is considering installation of fuel tanks to extend their range, something I found incredibly interesting. The airline will be further examining this possibility in 2011.
As for future aircraft, Dale provided some very interesting commentary. Dale wondered how the CSeries will end up looking, and also mentioned the possibility of the 787 and A350 making A330 lease rates more attractive. Not to mention all the questions about the narrowbody market. (Examples – Will Airbus re-engine? Will Boeing end up offering the 737NG+? Will we see clean sheet designs from one or both airframers?)
Basically – OpenSkies is constantly scanning the environment here – but it hasn’t committed to anything, and a great deal of that is due to the amount of uncertainty about how many of my questions above will end up being answered.
So, just to finish things up – it was great to talk with Dale, who is clearly a huge believer in his product. The airline must continue to work at establishing its brand. And while OpenSkies has provided the occasional market share and load factor number, it would be nice to see some more hard numbers, especially in terms of profitability and unit revenues.
But hopefully they one day come to Boston so I can give them a try! (Though I would also need the cash to avoid a business class ticket…but that’s a minor detail.)
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