flycana: ambitions high for the Caribbean ULCC

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bimjim
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flycana: ambitions high for the Caribbean ULCC

Unread post by bimjim » Tue Oct 16, 2018

https://centreforaviation.com/analysis/ ... lcc-442096

flycana: ambitions high for the Caribbean ULCC
15-Oct-2018

The wave of LCC and ULCC start-ups that has swept over Latin America during the past couple of years has moved to the Caribbean, with the establishment of the ULCC flycana in the Dominican Republic.

flycana aims to launch operations by the end of 2018 after securing the AOC of Dominican Wings. The airline is aiming initially to serve the New York-Dominican Republic market, and then branch out to North and South America, as well as other Caribbean destinations.

The Caribbean is a tough market for an LCC or any other type of airline start-up. The region is notorious for levying heavy taxation on aviation and shows no immediate signs of softening its stance on long-standing egregious fees and taxes. But flycana has a seasoned management team confident that now is a prime time to establish a low cost carrier in the Dominican Republic.

Summary
  • Dominican Wings is now flycana, an aspiring ULCC backed by low cost veterans aiming to spread the model to the Caribbean from a base in the Dominican Republic.
  • flycana is still targeting a launch in 2018, with service to the New York area as its first route.
  • The Caribbean has historically been a challenging region for airline start-ups.
The Dominican Republic has no flag carrier and is dominated by foreign airlines

Dominican Wings had a short-lived stint as a charter operator, launching service in early 2016 and ceasing operations in Mar-2018.

Shortly after it terminated operations, Dominican Wings stated that it was transitioning to a ULCC rebranded as flycana. The former Viva Air Colombia CEO was named CEO of the start-up, and the executive chairman for the Argentinian ULCC Flybondi Michael Powell is the Chairman of flycana’s board. Mr Powell was previously CFO of the European ULCC Wizz Air.

The Dominican Republic is largely a destination market. Data from CAPA and OAG show that 100% of the country’s seats are deployed into international markets.

The country’s largest airline measured by seat deployment is JetBlue, followed by Delta, American and Copa.

Given the Dominican Republic’s seat dispersal, the United States represents nearly 50% of the country’s international departing seats.
The Dominican Republic's flycana is still aiming for a 2018 launch

During a recent interview with CAPA TV at the CAPA Latin America Aviation & LCCs Summit, flycana CEO William Shaw noted that the Dominican Republic has no airline, and highlighted that 90% of travel to the country is leisure based, which means price is the most important factor in making a decision to purchase an airline ticket.

He remarked that flycana was still working hard to launch in 2018, but its debut could slip into 2019 due to aircraft availability.

Various news outlets have reported that flycana plans to launch operations with current generation Airbus A320 narrowbodies.

The aspiring ULCC has also outlined plans to build a fleet of 28 A320s by 2023 and transport 5.5 million passengers annually.

Mr Shaw told CAPA TV that eventually flycana would prefer to operate the A320neo, noting that with rising fuel costs “the 180-seat configuration [of the A320neo] seems to be the right aircraft for the LCC we want to start in the Dominican Republic”.
New York is likely the first market for the ULCC

flycana’s first route from the Dominican Republic is likely to be to New York, said Mr Shaw, who highlighted that New York has the second largest Dominican population outside the Dominican Republic’s capital of Santo Domingo.

JetBlue is the largest airline operating between New York and the Dominican Republic by capacity, representing 58% of the seats deployed on routes to and from the regions as of early Oct-2018. The airline is also the largest operator between the US and the Dominican Republic, holding a 41% share.

JetBlue serves the most points in the Dominican Republic of any US airline, operating services from its three bases of Fort Lauderdale, Boston, New York JFK and San Juan to Santo Domingo, Santiago and Punta Cana. The airline also operates services from Orlando to Santo Domingo, and from JFK to Puerto Plata and La Romana.

United offers services from its Newark hub to Santiago, Punta Cana, Puerto Plata and Santo Domingo, and Delta serves Santiago, Punta Cana and Santiago from its hub at JFK.

There’s no shortage of service from the Dominican Republic to New York, but presumably flycana’s plan is to be the lowest fare provider in the market, which could result in VFR and leisure passenger stimulation.
The Caribbean can be a tough region for an airline start-up

flycana also plans to serve other points in the Northeastern US, as well as other Caribbean destinations and routes in North and South America.

The last attempt for the creation of a low cost airline based in the Caribbean was REDjet, which had a short-lived stint in 2011 and 2012 operating MD-80 aircraft from a base at Grantley Adams International airport in Barbados.

REDjet faced challenges in operating a consistent schedule as it struggled to gain approvals for flights in the region. The airline also claimed that subsidised carriers were undercutting its fares.

The Caribbean also has a track record of imposing high taxes on airlines, which obviously would be a hurdle to a potential start-up. IATA has recently highlighted that a short term budget imposes significant taxes on air travellers.

“For a family of four traveling to Barbados from Europe or North America, the new tax will add a total of USD280 to their travel cost. The tax will also affect air travelers within the Caribbean Community nations, adding USD35 to each ticket, a significant increase in short haul markets where traffic is already struggling”, IATA declared.

A lot has changed in the low cost landscape in Central and South America since REDjet’s low cost experiment. But the operating hurdles in the Caribbean, especially taxation, remain pronounced.

flycana remains optimistic about ULCC operation in the Caribbean

It is logical that the Caribbean would attract an ultra low cost airline, given the penetration of the model across the Americas during the past decade.

In many ways, launching a new airline in the Caribbean is not for the faint of heart. But flycana’s management remains confident that it can forge a new low cost path in the region.

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Re: FlyCANA: ambitions high for the Caribbean ULCC

Unread post by bimjim » Wed Oct 17, 2018

a21.com.mx/index.php/aerolineas/2018/10/16/flycana-la-low-cost-que-quiere-despegar-en-el-caribe
(Translated by Google)

Flycana, the low-cost that wants to take off in the Caribbean
Tuesday, October 16 2018

With an eye on its start of operations by the end of 2018, Flycana wants to become the main ultra low cost airline in the Caribbean from its base in the Dominican Republic. His first route would connect the island with New York.

Similarly, Flycana wants to break through in its country's market, which historically has been dominated by foreign airlines.

And currently, 24% of the seats offered to Dominican travelers belong to JetBlue Airways, 10.4% to Delta Air Lines, 9.8% to American Airlines, 8.6% to Copa, 3.9% to Avianca, 3.3% to United, and 39.9% of other airlines.

It should be noted that the Caribbean nation does not have a functioning flag airline. The last one was Dominican Wings, from whose ashes Flycana emerged in May 2018.

For this, low-cost specialists took control of the company. They are: Víctor Pacheco, who was president of Dominican Wings since June 2015 and now occupies the same position in Flycana; William Shaw, who launched two ultra-low cost companies: VivaColombia in 2012 and VivaAir Peru in May 2017; and finally, Mike Powell, who has held management positions in Flybondi and Wizz Air.

This team is responsible for the ambitious growth plan of Flycana, which will be driven by a fleet of Airbus aircraft to unite the Caribbean with the United States and South America.

"We estimate that by the year 2023 we will have 28 A320 aircraft and we will be transporting five and a half million passengers. We are also going to create more than a thousand direct and 13 indirect jobs. We want to fly from the Dominican Republic to more than 50 international destinations, "said Shaw, in an official video of the company.

However, the development of the Caribbean low-cost will not be easy. According to the consultancy CAPA - Center for Aviation, the last attempt to create an airline under this model was REDjet, a company based at the Grantley Adams International Airport in Barbados, which had a fleet of MD-80 aircraft and only operated between 2011 and 2012.

At the time, REDjet blamed its failure on the high airport costs in the Caribbean, and accused other airlines of receiving subsidies that diminished its competitiveness.

However, the executives of Flycana trust in their strategy to take off: "until now we have only had models with low rates and high costs. So, obviously these airlines fail. We are going to succeed because we will have low costs. It's a very simple message, "concluded Mike Powell.


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a21.com.mx/index.php/aerolineas/2018/10/16/flycana-la-low-cost-que-quiere-despegar-en-el-caribe


Flycana, la low-cost que quiere despegar en el Caribe
Martes, 16 Octubre 2018

Con la mira puesta en su inicio de operaciones para finales de 2018, Flycana quiere convertirse en la principal aerolínea de ultra bajo costo del Caribe desde su base de República Dominicana. Su primera ruta conectaría a la isla con Nueva York.

De igual forma, Flycana quiere abrirse paso en el mercado de su país, que históricamente ha sido dominado por aerolíneas extranjeras.

Y es que actualmente, un 24% de los asientos ofertados a los viajeros dominicanos pertenece a JetBlue Airways, 10.4% a Delta Air Lines, 9.8% a American Airlines, 8.6% a Copa, 3.9% a Avianca, 3.3% a United, y el 39.9% de otras aerolíneas.

Cabe resaltar que la nación caribeña no cuenta con una línea aérea bandera en funciones. La última fue Dominican Wings, de cuyas cenizas surgió Flycana en mayo de 2018.

Para ello, especialistas del modelo low-cost tomaron control de la compañía. Ellos son: Víctor Pacheco, quien fuera presidente de Dominican Wings desde junio de 2015 y ahora ocupa el mismo puesto en Flycana; William Shaw, quien lanzó al mercado dos empresas de ultra bajo costo: VivaColombia en 2012 y VivaAir Perú en mayo de 2017; y finalmente, Mike Powell, quien ha ocupado puestos directivos en Flybondi y Wizz Air.

Este equipo es responsable del ambicioso plan de crecimiento de Flycana, mismo que será impulsado por una flota de aviones Airbus para unir el Caribe con Estados Unidos y Sudamérica.

“Estimamos que para el año 2023 vamos a tener 28 aviones A320 y vamos a estar transportando cinco millones y medio de pasajeros. También vamos a crear más de mil empleos directos y 13 mil indirectos. Queremos volar de República Dominicana a más de 50 destinos internacionales”, dijo Shaw, en un video oficial de la compañía.

Sin embargo, el desarrollo de la low-cost caribeña no será fácil. De acuerdo con la consultora CAPA - Centre for Aviation, el último intento de crear una aerolínea bajo este modelo fue REDjet, empresa con base el Aeropuerto Internacional Grantley Adams de Barbados, que contaba con una flota de aviones MD-80 y sólo operó entre 2011 y 2012.

En su momento, REDjet culpó de su fracaso a los altos costos aeroportuarios en el Caribe, además acusó a otras aerolíneas de recibir subsidios que mermaban su competitividad.

No obstante, los ejecutivos de Flycana confían en su estrategia para despegar: “hasta ahora hemos tenido solamente modelos con bajas tarifas y con altos costos. Así, evidentemente estas aerolíneas fallan. Nosotros vamos a tener éxito porque tendremos costos bajos. Es un mensaje muy sencillo”, concluyó Mike Powell.

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