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Old 30th Jul 2013, 15:45
  #569 (permalink)  
Flitefone
 
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KLM to UK regional airports - not so far fetched

KLM is interesting, understanding their plans is pretty straightforward.

KLM like most other European legacy carriers has suffered a good deal over the past decade for two reasons: Competition on their short medium haul routes from Low Cost Carriers(LCC) and competition from the Middle East Big 3 (MEB3) namely Emirates, Qatar and Etihad. on their long haul flights going east or south.

KLM have chosen to compete with EZY and RYR using Transavia, their low cost in house airline. In the long term I think we all know that EZY and RYR will prevail in most markets. KLM need to do something different or slowly die.

For long haul, the AMS hub is losing out to the MEB3, each of whom are targeting the top 50 European airports, most of which are already served by KLM.

Emirates didn't even serve AMS until three years ago, now its a daily 380 with a second daily 773 service planned I hear. You can imagine that KLM are not best pleased by this development.

So what does KLM do? Their costs aren't low enough to compete with the MEB3 on price... instead they add the next tier of European airports to their destination list, feeding long and short haul through AMS. These airports are more difficult for the MEB3 to reach. KLM need to get closer to their customers than the MEB3 can do. Its a similar strategy that they used in competing with LHR and BAW.

That's why KLM serves so many smaller airports in UK and will expand in UK and other rich markets like Norway (yes the UK is a rich market)

That's also why KLM have added Manston and already serve secondary airports in UK including Teeside, Humberside, Norwich and Cardiff. Its KLM's way of competing with Heathrow, the MEB3 and with the LCC.

For BOH, the proximity of SOU and a Flybe link is not very significant, KLM want all the revenue they can get, Flybe is a convenient way for KLM to test the market and generate some revenue. But it does not preclude service from a nearby airport, just look at NCL/MME, BRS/CWL and so on.

BOH has a rich catchment for business and leisure. Sure it does not have the benefit of a railway and two motorways like SOU, but BOH catchment is further from the reaches of the MEB3 at LHR and LGW and does not have a large EZY presence to compete with for European business markets.

That's an interesting prospect for KLM.

I think you will see KLM adding perhaps one more airport in UK over the next two years, and BOH must be near the top of the list not already served.

LPL is another good example, but less likely because of the entrenched EZY service to AMS and the proximity to the MEB3 stronghold at Manchester.

FF
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