The bankruptcy of Air Berlin is undermining Caribbean Air and French Blue to Orly




The bankruptcy of Air Berlin will have repercussions in France, since it undermines in turn the two airline companies of the group Dubreuil, Air Caraïbes and the low-cost long-haul French Blue. In fact, according to our information, three daily flights operated by these two companies at the start of the Orly airport using slots of the take-off and landing (” slots “, in the jargon of air transport) of the German carrier, by reason of an agreement of “code sharing” signed last spring.

Very strong growth

This agreement was crucial for the group Dubreuil. Without him, the latter could not provide at the start of his base of operations to paris Orly, the very strong growth in seats scheduled this year for his two companies (+75%), linked to the entry in fleet of three widebody A350, two for Air Caribbean and one for French Blue. Because they use all of their portfolio of niche and were not able to receive more, due to lack of availability. Due to the capping of the airport south of Paris to 250,000 movements per year (takeoffs and landings), the slots are a commodity extremely rare.

Air Berlin has nearly 4,000 slots at Orly

To achieve its ambitious plan of walking and to avoid having to transfer a portion of its business from Roissy-Charles de Gaulle airport (an expensive operation), the two carriers in the group Dubreuil, therefore, had to use the niche of another company that does not wish to use them. This was the case of Air Berlin. In financial difficulty, the German company had for some time already preferred to reduce a number of lines deficit, including all of its flights to Orly. In addition to Air Caribbean and French Blue, Air Berlin has also lent slots to British Airways in allowing the british company to operate two daily flights. In the end, some 4,000 slots from Air Berlin to Orly (the equivalent of 5 flights daily) are, therefore, used by Air Caraïbes, French Blue and British Airways.

This practice is permitted, provided that the company engaged in its niche markets it as the flights of the carrier to which it lends. This marketing is done through a code-sharing agreement. A carrier can retain its valuable slots without the risk of losing them in the event of non-use. Because, according to the european regulations, any niche that is not being used by the company, which has the purpose to at least 80% is redistributed to other carriers.

The aircraft of Air Berlin, will be nailed to the ground by the end of October

Result. The judgment of the flights of Air Berlin expected by October 28, and the return Air Berlin by a number of operators are going to challenge this agreement. Air Berlin will be sold at the cut and its assets will be distributed among different buyers. So far, according to our information, none of them will receive of Cohor, the body in charge of market opportunities in France, the slots of Air Berlin to Orly, to the extent that the German company did not have its own resources (not of aircraft or personnel) to Orly for you to use. For otherwise, it would be necessary that there is a buyer for the entire company (at least the whole of the middle-haul Air Berlin) with the maintenance of the legal entity of Air Berlin. Moreover, even when a transfer of slots has been achieved, it would have been impossible to assign the slots to different buyers in the extent to which all would have been entitled to claim.

A new pool of slots to redistribute

Cohor will go through all the slots of Air Berlin, and distribute them to other companies, according to the european rules on the subject : basically, half of the slots should go to new entrants, the other actors already present on the airport. Consequences : there is therefore a risk that the two companies of the group Dubreuil may lose all or part of their famous slots at Orly.

It is not there yet. During the redistribution process, the duration of which is still unknown, Air Caribbean and French Blue will remain in the niche. Then, in order to obtain market niches, both companies have assets to bring:

“These two companies do not operate as large aircraft, and the aircraft capacity is one of the award criteria, is believed to know an actor in the air transport. And to add : “furthermore, unlike low-cost airlines medium-haul, Air Caribbean and French Blue are not demanding on the schedule of time slots. “

Other aircraft should enter the fleet Air Caribbean and French Blue

If he were to lose slots, the group Dubreuil will not only find a solution for its current programme, but also its growth plan for the next few years. Next spring, a new A350 will enter the fleet of French Blue. Then, between 2020 and 2022, the group will receive three more A350-1000.

What relaunch the debate on the uncapping of the Orly airport, decided in 1994 not to increase the noise level. However, as highlighted by the companies, the level of aircraft noise is in a free fall for the past 20 years with the modernisation of the fleets and would raise, or even remove the ceiling.

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