Locking into place
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Posted Date: 06/05/2008
Issue: Airline Handling International June 2008
Publication: Airline Handling International
The start of the summer season produces a hive of activity for all airlines but at clickair, Chief Executive Officer Alex Cruz is constantly upping the ante. “Last year we added Moscow, Malta, Dubrovnik. Now we are starting Brussels and Milan. We have had changes in our schedule every month because every month we have been adding new aircraft,” Cruz explains.
Today clickair boasts a fleet of 24 A320s. “We went from zero to 24 aircraft in a year,” says this former Accenture consultant that now steers the airline. “We were not only the highest capitalised airline that I am aware of, with €120 million investment, but we were also one of the fastest growing.”
In terms of route network, clickair operates largely from its Barcelona home base, but also from La Coruna, Bilbao, Malaga, Valencia and Seville. When asked whether mini hubs are next on the agenda for this airline, Cruz says: “We think we need to be religious about operating point to point – at least in the first few years in order to maintain a very low cost base while still flying to main airports. Mini hubs are interesting to us but we haven’t found a winning formula yet.”
However, clickair is planning to assist passengers booking multiple reservations through the offer of flight combinations on the website. “But we will be very specific that we will not connect baggage,” he says. “We would like to help passengers who are buying two tickets and, at the same time, try to assimilate a little more traffic.”
Fast on the ramp
clickair – in keeping with the low cost model – outsources all handling at every station including Barcelona. “There are no immediate plans to consider insourcing at any time,” Cruz states firmly. clickair pursues the usual ground handling tendering process across the whole of Europe, Northern Africa and increasingly the Middle East.
Last year clickair was opening three or four stations every month but, this year, there is an opportunity to rationalise ground handling agents. “Whilst I think we took on the best ground handlers I think there is some work to be done in terms of optimising more framework contracts,” comments Cruz. “We are clients of most ground handling companies but we could probably focus on three or four in Europe and try to concentrate some of the contracts.”
Cruz comments further that even though clickair may conclude handling agreements with large handling companies based in distant locations, when it comes to billing, service levels and standards, the airline ends up negotiating with locals and not head office. “We hoped there would be some evolution in terms of head offices taking command and driving better scale in the way in which they negotiate with individual airlines, but I imagine that only happens when an airline achieves a certain size – and we do not have that yet.”
In terms of turn times on the ramp, Cruz comments that clickair’s shortest turn time is 25 minutes. The longest ones are 40 minutes, but these are very specific out stations, and the rest are around 30-35 minutes. “We had to teach some of our ground handlers – especially in Spain – how to manage that. They knew it could be done and they had done it for some flights here and there but they weren’t used to doing it consistently in the beginning,” comments Cruz. “We don’t carry cargo and we refuel at the cheapest stations. This is where we have the largest volume – typically at home in Barcelona. Most flights are refuelled for the way over and the way back and there are just top-ups here and there. Refuelling does not have to happen for every single flight.”
clickair charges for the carriage of hold baggage and so there are fewer units to check in than traditional airlines. “There are many things that we have done that are no novelty but they significantly reduce the amount of congestion and activity below the wing when we are parked. Having said that, we don’t have mechanisms in place to reward ground handlers for either over performance or for catching up with late flights,” remarks Cruz. “This area of success based compensation is one that is totally under developed in our industry and we only find examples that are tangible and of positive benefit within airlines that have ground handling departments.”
Keeping up with check-in
On the check-in side of the equation, clickair remains very traditional. “There is a reason for that. About three-quarters of reservations are through the clickair channel – that is our website and our call centre. The other quarter of our sales are made through traditional booking channels. Each and every one of our flights that we operate has a code share with Iberia so our flights are listed in Amadeus, Sabre, Worldspan, etc,” Cruz says. “What that means is that we have different profiles of passengers coming to the airport for check-in.”
As a result, clickair pursues standard check-in desk that open two to three hours before takeoff as well as common check in at the larger stations. In 2008, Cruz plans to consider differentiating passengers according to their frequent flyer status or higher pricing based on multiple fares. “We’re not planning to charge to use check desks in the way Ryanair does,” he comments.
“Right now, about 35% of passengers use online check-in and that has been going up. But we find there is a tremendous lack of knowledge about this. Passengers simply do not realise that they have a boarding pass from the moment they make the boarding on the screen. The confirmation is also the boarding pass,” explains Cruz. He wonders whether growing beyond the 35% mark is going to take drastic measures.
For now, there is plenty for Cruz to address as he builds his airline, adds fleet and, importantly for the ground handling industry in Europe, revisits those early ground handling contracts to pursue framework agreements to achieve a more slick and responsive result.
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