Jersey’s Competition Authority’s fine Thomsonfly. What message are we trying to send!?

It’s been a bit quiet on the blogging front for the past few weeks. But rather like London buses, you have nothing to write about for weeks and then 3 stories come along at once.

Firstly, there’s the mighty JCRA levying a crushing fine of, wait for it….. £10,000 on TUI (parent company of Thomsonfly) for failing to advise them back in September of their acquisition of First Choice. Apparently, because Thomsonfly were flying to the island, they should have advised the JCRA in order that they could assess the competitive effects of the acquisition.

Despite the fact that the JCRA has no power to order TUI not to proceed with the merger (as if that would make a difference!), they still decided to fine them for an administrative oversight. What sort of message does this send to other airlines or businesses we are desperately trying to attract to Jersey? I hope the £10k fine which is going to the States will be handed over to Jersey Airport to use for marketing activities.

Flybe takes a pop at Economic Development

An 8 page ‘Flybe - aren’t we wonderful’ supplement fell out of the Jersey Evening Post last night. Basically it’s an advertorial (I hate that word) supplement designed to inform us about all the new routes and destinations Flybe are serving and encourage us to fly with them more frequently.

But on the front page of the supplement, Flybe’s Chief Commercial Officer, Mike Rutter could not resist taking a pop at Jersey’s Economic Development Department's policy of handing out incentives to airlines to come and fly here. Their argument is that public money is being handed out in increasingly large amounts to airlines with no accountability and no long term commitment to the island.

Of course, the recent decision by Thomsonfly to stop flying to Jersey supports their argument and to be fair, they have always been consistent about it. Thomsonfly started flights to Jersey 4 years ago – presumably attracted partly by incentives for new route development. Nobody could predict that the airline’s parent company – TUI - would acquire other airlines and rationalise their fleet to only operate aircraft that cannot land in Jersey (the reason given for their withdrawal).

Of course, there is still the Heathrow subsidy that Flybe can point to. We may never know how much has been forked out by government to secure the route, but let’s hope that BMI show greater commitment than Thomsonfly have been able to. They are facing huge increases in landing fees at Heathrow from April next year of RPI + 7.5% which will put even more pressure on the viability of the route.

In the meantime, Flybe keep on flying and the tourism industry needs to recognise their commitment to Jersey. Let’s just hope they don’t get taken over by some larger airline who would rather use their UK airport slots for more profitable routes!

Thomsonfly - we're not smiling

I thought it was all going too smoothly for Julian Green and his team at Jersey Airport.

After a year that saw a number of new routes & significant growth in passenger numbers, we've been brought down to earth with a bump by the news that Thomsonfly are to cease operating from Doncaster, Luton & Cardiff from March 2008. This will leave Coventry as the only route operated by the airline - and who knows for how much longer.

This is disastrous for Jersey's tourism industry on 2 counts. First Thomsonfly achieved significant growth in volumes this year, with a total of over 120,000 passengers carried to/from Jersey. The airline had built up a 12% share of the market - and now it will all but disappear. More importantly, in my opinion, Thomsonfly led the market in bringing low cost fares to the island. Not just a few seats on each flight, but a significant proportion of the aircraft's capacity was sold at low fares and often these fares were available right up to departure.

As we know, this summer's weather was one of the poorest for many years, but despite that late bookings for July & August were stronger than ever. It is my belief (and that of others I have spoken to) that this demand was being driven by Thomsonfly and other airlines who were strongly promoting Jersey in their advertising as a low-cost destination - in effect doing the tactical marketing job for the island. The fact that visitors could still book fares of £70.00 or less return in peak season was a major factor in encouraging them to visit Jersey thi summer.

So now Thomsonfly are flying off to sunnier climes, what can Julian and his team do to secure an alternative operator on these routes? I am sure the Airport team will be working hard on this but the key is that whoever is persuaded (or incentivised!) to do so, is committed to providing low fares.