Floris van Pallandt, KLM uk's chief executive, dismisses suggestions that the London Stansted-based carrier has been forced into this move by the success of rivals easyJet, Ryanair and Go. "This is not a defensive measure, more of an opportunity," van Pallandt says, pointing to figures from market research firm Mintel, which predicts UK low-fare passenger numbers will increase from 5.4 million in 1998 to 15 million in 2003.
With the launch of buzz, KLM uk will essentially be left as a feeder for KLM's Schiphol hub, serving 12 UK airports with 17 Fokker 100s and nine Fokker 50s.
Buzz's main competitors have a head start, although the newcomer has generally selected routes where it is not competing head to head with low-fare rivals.
A number of industry observers have questioned buzz's low-cost credentials. Chris Avery, analyst at JP Morgan, says: "There appears to be no fundamental change in the cost base between KLM uk and buzz." This point is echoed by Chris Tarry, analyst at Commerzbank, who points out that the other low-cost airlines were essentially greenfield start-ups with no inherited wage structure.
Despite some obvious handicaps from the KLM uk legacy, particularly in terms of fleet composition, managers at buzz are adamant that it can be low cost, and not just low fare.
Although the basic wage structure may be the same as it was under KLM uk, buzz commercial director Tony Camacho says pilots' contracts have been renegotiated to "dramatically increase productivity." The increased number of flights a day will reduce cost per block hour, Camacho says, as the airline gets more flying hours out of the pilots.
Camacho adds that operating costs have been significantly reduced. For example, 37.5% of bookings were processed through the Internet in the first week of operation.
Buzz has broken one of the rules for other low-cost airlines by targeting primary hubs, although Camacho says that it has been able to negotiate good deals with these airports.
Buzz has also attracted criticism for its use of the BAe 146 regional jet. But a gradual fleet replacement programme is planned, starting with two Boeing 737s due to enter service in February. Camacho argues that as the airline goes through its start-up phase, the 146s will be more suitable for expected passenger numbers.
Buzz has revived memories of the now bankrupt Debonair with its strategy of targeting business and leisure travellers - with the business segment expected to make up 40%of passenger volumes. Buzz emphasises its different approach, with its "pay as you go" policy for the extras that business travellers may want, which it sees as a way of keeping costs under control for the airline and customers.
| Buzz launch services from London Stansted | ||||
| City | Airport | Daily flights* | Low-fare carriers from London | to: |
| Paris | CD Gaulle | 4 | Ryanair | Beauvais |
| Frankfurt | Rhein-Main | 3 | Ryanair |
Hahn |
| Milan | Malpensa | 3 | Go | Malpensa |
| Düsseldorf | International | 3 | (Debonair | Dus Express) |
| Lyon | Satolas | 3 | Ryanair/Go | St Etienne/Lyon |
| Berlin | Tegel | 3 | (AB | Schönefeld) |
| Vienna | International | 3 | ||
| Hamburg | International | 3 | ||
| Marseilles | Provence | 1 | ||
| Bordeaux | Merignac | 1 | ||
| Helsinki | Vantaa | 2 | ||
| NOTE: *Frequencies flown weekdays from Monday to Friday. (italics) = discontinued. | ||||
Source: Airline Business
