XL Airways was destined to fail
XL Airways seems to have joined the unfortunate club of French airlines that won’t operate flights after the summer. The long-haul low-cost airline, which operated mainly from Paris Charles De Gaulle International Airport (CDG), will join Aigle Azur, which also stopped operations in September 2019. According to XL Airways’ website, the airline stopped selling tickets on September 19, 2019, and will cancel “some flights” starting September 23, 2019, due to “financial difficulties”.
XL operated flights from Paris CDG and Lyon Saint Exupery Airport (LYS) to China, the Caribbean, New York (EWR) and to the French overseas department, Réunion Island. The airline carried passengers on four Airbus A330 aircraft: one A330-300 and three A330-200s, which were configured in an all economy-class, seating up to 408 and 361 passengers, respectively.
Aigle Azur and XL Airways’ financial difficulties seem eerily similar – both airlines swayed towards long-haul flights and at different points in time, they had the same man at the executive table, Frantz Yvelin. While recently he was ousted from Aigle Azur in a coup, Yvelin led the merger of La Compagnie and XL Airways in 2016 to “democratize” air travel in economy and business class. Yet Aigle Azur and XL Airways have failed to make the model sustainable, with the latter declaring bankruptcy and, most likely, without an investor from the side, the former will also fold in the coming days.
So, why did XL Airways flew into financial turbulence?
Dashed long-haul dreams
There is no denying that the low-cost long-haul business model boomed in popularity over the past few years. Many carriers have attempted to offer cheap tickets between continents, yet many have failed, or are struggling. Especially Europe-based budget airlines – WOW Air and Primera Air have collapsed, Norwegian Air Shuttle is barely limping on, Lufthansa gave up on Eurowings and repositioned the airline – the list of brand names that are unable to make the business model work goes on and on.
But on the other side of the globe, in Asia-Pacific, low-cost long-haul is blossoming. AirAsia Group, Jetstar Group and Lion Air all have successfully established themselves in the continent and are dominating both domestic and long-haul international flights.
However, the case with XL Airways is an interesting one. It clearly positioned itself as a budget carrier, while La Compagnie, its partner in travel, catered to the business traveler. When looking from the side, it seems like a bulletproof plan – both airlines would offer cheaper prices than Air France on the same routes to different target audiences, as a homogenized model allows them to limit their costs to a minimum, driving Air France away from their own territory.
Yet XL Airways was unable to make it work and there are a few reasons why.
A very complex model
Long-haul flights put no-frills carriers in a difficult position, as refueling and other ground services take more time to complete compared to short-haul flights. For XL Airways this meant that their aircraft could complete two flights per day when they flew to China or the Caribbean. One example is F-HXXL, the airline’s Airbus A330-200 – the aircraft departed Jinan (TNA) for Paris (CDG) at 11:49 AM (local time) and arrived in Paris at 5:44 PM (local time). The same A330 then flew to Saint-Denis (RUN) in Réunion only six hours later, at 11:54 PM (local time), completing only two flights on September 18, 2019, according to flightradar24.com data. On September 17, it operated no flights, while it flew back from Réunion to Paris on September 19, 2019. Even going further back on the aircraft’s flight history, data reveals that the aircraft completed a maximum of two flights per day.
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