March 11, 2021
Written by Thierry Labro
Paperjam
Luxaviation will tackle the American market from next week in New York. Tele-interview with its CEO, Patrick Hansen, after a year which saw him buy five companies, launch LXA Flyer and reposition himself to better emerge from the crisis. Business aviation takes off.
“Last year, exactly this day, was the first time in my life that I saw cancellations of 20 million euros. Normally, we have a turnover of 2 million euros per day. And, in April, the lowest day allowed us to earn 7,586 euros… I could always tell you how much someone paid to go and watch gorillas in Rwanda, but that doesn't change the situation of the industry… It there were reasons to be worried. ”
This Wednesday, barely returned from the United States where he finalized the launch - which will take place next week - of Luxaviation USA from New York, the CEO of Luxaviation, Patrick Hansen, rewinds 2020 and shows that he has been able to navigate in full storm of Covid-19.
Business aviation has profited from the crisis, many articles claim in recent days. We left you worried, in April, in front of lockdowns and travel restrictions. How do you see 2020 in the end?
(Photo: Luxaviation)
Patrick Hansen “After all the restrictions eased slightly during the months of June, July, August and September, we found that people still wanted to discover new places and have experiences. A large number of thefts took place, but these flights were mostly one or two hour flights on 'small' planes - without this being derogatory - and not on large planes. No one was going to Asia, the United States or Africa, which were closed or required a quarantine when passengers arrived. And no one wanted that. However, we, a few years ago, we specialized in 'large' airplanes. Today, we are proud that more than half of our fleet is made up of these planes, which are there for intercontinental flights.
You continued to develop your company ...
“After the shock phase, we wondered what to do. Rather than playing the ostrich, we have decided to take all possible actions to come out of this crisis in a better position. We have our FBO ("fixed-base operator" or aeronautical service center) division and lounges. In 2020, we completed five acquisitions, either for the back office or for the VIP lounges. A company that does 'flight dispatch' in Romania, which allowed us to restructure for Brexit because we had our 'flight dispatch' center in England and we moved it to Timisoara. We bought the VIP lounges in Paris, Berlin and Munich. And we have invested in a society of luxury experiences and culture.
The first of the 24 planes expected to be in the LXA Flyer fleet, a King Air 250, was baptized on the Luxembourg tarmac. It will be able to take six people at prices "that Luxair customers can pay", says the CEO of Luxaviation.
I saw your mischievous campaign pass on Luxembourg crémant aboard LXA Flyer flights. What exactly is LXA Flyer?
“We said to ourselves that there was a new customer who wants to fly to fairly close destinations, who seeks, on the one hand, to stay in his sanitary bubble and who still looks at the price of these flights. We have launched a new airline, LXA Flyer. We had to secure new planes. The first has arrived, we will get the second in the United States next week, the third has been ordered, and we should increase the fleet to 24 planes. The test market will be Luxembourg and Belgium. The first flights took place, to go from Luxembourg to Cannes - not to Nice - with six people, for a return trip at around 5,000 euros. Less than 1,000 euros per person in complete safety! The ultra-rich would pay 65,000 euros for the same flight in another type of plane. Luxair customers can afford it.
And where are you taking them?
“Where they want. The client says he wants to go to Venice, Denmark, Stuttgart, Biarritz, whatever. We land at many more airports than commercial flights today.
How do you manage costs by customizing flights in this way?
“We have had all the necessary handling experience for 12 years, and we often do our handling at our airports. And we have chosen this type of aircraft for these reasons of lower costs. We did our calculations very, very precisely.
Do you have to steal often to make the initiative profitable?
“With each plane, I want to fly at least 400 hours a year. Which seems reasonable. In general, if we go outside the framework of LXA Flyer, we have an approach where the planes are not ours, but those of others. Their owners pay for the management of their aircraft on a monthly basis. Even when the plane is grounded, the customer has paid these fees so as not to reduce the value of the plane to zero. We also have our lounges and our aeronautical service centers which include the parking of planes or their parking in hangars. 2020 was not the year we were hoping for, but it was better than the worst case scenarios we imagined in April.
As in all companies, the question of people and human resources must also have been key for you?
“Human resources management has been the most difficult for our company. We were able, all over Europe, to take advantage of government support, such as partial unemployment in Luxembourg, and we thank the authorities for that. And besides that, there are still places, like Dubai or South Africa, where these devices do not exist. There, we found an agreement with our teams. We continued to pay them, even a little less. Our colleagues could continue to live and survive, in many cases, with their families. From our point of view, we could keep these talents, whether they are pilots or mechanics, to which we have devoted a lot of resources in training and training. We were able to keep them for the time when activities resume. It represents a significant cost for society. Fortunately, just before the crisis, we sold all of our maintenance activities to Dassault. This gave us a cash amount, which made it possible to finance these measures. It was a choice. Ultimately, human resources are the most essential for a business.
Today, where would you say we are with this crisis?
“Once the borders open and the quarantines are no longer in place, I have no doubts that our activities will pick up more strongly than in the first months of 2020. It is just a matter of time. We have an FBO in Saint-Martin, the Dutch part of the island. He always has a very seasonal activity because wealthier people often go to Saint-Barthélemy. This year, a ray of hope appeared at the end of December-beginning of January: a record number of landings in Saint-Martin. Normally, 600 to 700 planes land each month in December. There we hit the 900s in December and January.
Is this a special case or a very good sign?
“People, as soon as they can - and not just the wealthy - will want to go out. These rushes to these destinations, such as Saint-Martin or the Seychelles, where we are also present, will multiply. Is it going to be the end of April or mid-June? From mid-June, surely! It is also a message of hope that I would like to carry. Of course, we have to hold on, we have to run, but the crisis will eventually end. For us and for Luxair.
You are coming back from the United States. Is the launch of Luxaviation USA coming soon?
“The largest business aviation market is the United States, where we have always had a small office in Miami to sell flights to Americans who wanted to do flights in Europe, Asia or Africa. We will sell flights to the Americans in the United States. This is a big step for us. We have always avoided the US market, and now is the time to enter.
Why is the time now?
“We are coming out of the crisis better than some of our small competitors. Considering our business model, I believe this is the time to enter a market where we will probably not be the richest, but we have a better business model than a number of local players. I hope I can take advantage of it. At the start, we will hire about ten people, mostly salespeople, before gradually growing. In terms of aircraft, in the coming months, we are targeting around ten aircraft based in New York. ”