FlyLolo plans to use school holiday pricing peaks to help it undercut no-frills rivals

A UK virtual airline believes it has the right Unique Selling Point (USP) to enable it to exist in one of Europe’s most competitive aviation markets. While intense competition between the UK and the Mediterranean may have ultimately brought down the Monarchy in the UK by playing the deciding hand in the collapse of Monarch Airlines, previously the longest serving leisure brand in the country, FlyLolo believes it has the right model to succeed.

Despite aborting its take-off last summer and a proposed schedule of flights between Bournemouth and Skiathos, FlyLolo a seat-only virtual airline, will return to the skies this winter offering flights to the Canary Islands in partnership with Spanish carrier Air Europa using a chartered Boeing 737-800 from London Gatwick and Manchester to Lanzarote and Tenerife and from Glasgow to Tenerife. Next summer it will launch weekly services between Southampton and Skiathos using a chartered Embraer E195 of flybe, the first direct route from the South Coast airport to Greece.

As a virtual airline, FlyLolo is effectively just selling a seat inventory and therefore does not have the heavy overheads of a full airline operational model. While aircraft leasing costs will be its largest outgoing, by specialising in peak season only flying, it believes it can significantly undercut the prices of others for individual and families who need to travel outside of school term.

IMAGE – A flight comparison from Skyscanner for travel between Glasgow and Tenerife over the New Year period (29-Dec-2017 – 05-Jan-2018 shows FlyLolo’s fares to be £170 cheaper per person to rival airlines on the route or a saving £650 of for an average family of two adults and two childrenSource: The Blue Swan Daily and Skyscanner

It is a strong USP as the issue of holiday peak pricing has resonated with parents across the UK for decades. With increased demand, tour operators and airlines inflate holiday packages and flights knowing that many have little opportunity but to travel in the holiday period between late July and early September.

It is a fiercely debated topic as to whether parents should be allowed to remove their children from school during term time. Parents have long attempted to get around the price premiums for travel and holidays, but an education clampdown by the UK government has seen these unauthorised absences being hit by significant fines. Department for Education figures show councils dished out 157,879 fixed penalty notices in 2015/16, and 151,125 the year before for unauthorised term-time absences.

However, despite the local education authority fines of around £60 per child (in exceptional cases in Scotland parents could face up to one month in prison and a fine of up to £1,000!) savings can still be generally made due to the significant spike in prices for out of term travel which both home and abroad can double in scale from the start to the end of July.

Attempts have been made to overcome the price peaks by, for example, staggering holidays between schools in Scotland and England, but that has done little to impact pricing except for seeing people in Scotland travel down to the likes of Manchester and Newcastle to take advantage of cheaper fares while English schools are still in session and likewise people from northern England travel up to Edinburgh and Glasgow once the new school year begins in Scotland.

FlyLolo is backed by travel entrepreneur Paul Dendle, who made his name in the industry as the former boss of Avro (which was sold to Monarch Airlines in the early 1990s). He believes the Atol-bonded financially-protected ‘airline’ will be able to price its seats between £20 and £50 less than existing no-frills operators by taking advantage of what he describes as “overpriced flights in July, August and September” as they “compensate for low margins in the shoulders [season]”. Alongside direct seat sales the company is looking to supply peak season seats to travel providers, particularly online travel agents looking to dynamically package their own breaks.

While FlyLolo is already selling its winter breaks, details of its summer 2018 expansion was revealed last week by Southampton Airport as it celebrate confirmation of its first ever direct link into Greece. FlyLolo will be offering a weekly flight from 03-Jul-2018 to 02-Oct-2018 and is exploring adding flights to Croatia and other markets within three-and-a-half hours’ flying time from the UK.

“We see an excellent future for Southampton as an alternative for London, and with the direct rail link, it makes it a fantastic option for passengers from the South East of England,” says Mr Dendle.

CHART – There has been a rapid rise in traffic at Skiathos’ Alexandros Papadiamantis since 2014 and although the rate of growth has been slowing, it still welcomed almost 40,000 additional passengers in 2016Source: CAPA – Centre for Aviation and Greece Civil Aviation Authority

While FlyLolo faces tough competition during its limited winter programme to the Canary Islands, it will be insulated from such competition with its Southampton programme as direct flights to Skiathos can be difficult to find, even when traveling to London. The Blue Swan Daily analysis of OAG schedule data shows that based on current published schedules the small Greek island in the northwest Aegean Sea will be served by under 2,500 seats per week during the period FlyLolo will be operating with Thomas Cook Airlines offering the largest programme into Alexandros Papadiamantis Airport.

The schedule data displays weekly flights are already loaded into the GDS from Bristol, East Midlands, London Stansted and Newcastle, while three times weekly services will be available from London City, London Gatwick and Manchester. Additional flights are expected to be added with Germania and TUI Airways (formerly Thomson Airways) also offering services this summer.

CHART – A seasonality profile for flights between the UK and Skiathos clearly highlights peak demand between June and August with no flights offered out of the summer scheduleSource: The Blue Swan Daily and OAG