Airline Business

Struggling to Get Off the Ground

Urlaub
Probably not Sundair customers. Source: dpa

It’s not easy being a small airline in Germany at the moment. National carrier Lufthansa dominates the skies, with an almost 70 percent market share from the country’s two hub airports Frankfurt and Munich. Meanwhile, low-cost carriers EasyJet and Ryanair are battling it out for supremacy of the budget sector. Several other medium-sized players such as Wizzair and TUI are also hustling above the clouds, while Air Berlin, the country’s second largest airline, knows only too well about the cut-throat environment: it filed for bankruptcy protection on Tuesday.

So you’d think that now was not the time to set up an airline. Not so, according to Marcos Rossello, a German entrepreneur who has just launched Sundair. Unsurprisingly, its arrival in the marketplace was turbulent.

The carrier, which is part-owned by large tour operator Schauinsland-Reisen, was supposed to start flying vacationers to sun-soaked destinations in the Mediterranean and Canary Islands in early July. Instead, the company has been beset by delays, failed deliveries and – worst of all – unhappy customers.

“One of my children is scheduled to fly out on a different day to the rest of the family.”

Nadine A., unhappy Sundair customer

The Brazilian airline Latam was late delivering its two leased Airbus aircraft, and then technicians in Abu Dhabi who were supposed to prepare the aircraft for flying in the EU weren’t able to work full-time because of Ramadan.

In the meantime it had to borrow other aircraft, an expensive and risky strategy because it relies on other companies to make their aircraft available. If Sundair can’t find a jet for its customers, it rebooks their flights.

That’s led to misery for passengers. One woman, Nadine A., complained on Facebook that the nascent carrier kept changing her flight arrangements. “Now one of my children is scheduled to fly out on a different day to the rest of the family,” she wrote. “Never using Sundair again.”

Mr. Rossello is philosophical. “This kind of thing happens,” he said.

The airline industry isn’t exactly a magnet for entrepreneurs. The expense of getting an airline up and running is a major deterrent, as is the competition, which is formidable even for established carriers. But Mr. Rossello is not to be deterred. And it helps that he gets a bit of assistance from the German taxpayer.

Sundair has a deal with the regional airport of Kassel-Calden in central Germany, where it’s partially based. The airport has agreed to pay Sundair for a period of up to eight years as part of a plan to turn Kassel-Calden into a travel hub.

Some in the industry say Sundair could be receiving as much as €1 million ($1.17 million) a year, which would cover about a sixth of its operating costs. Schauinsland-Reisen says it’s less, though a company spokesman declined to go into further detail.

Either way, the regional airport’s ambitions to become a national travel hub are a source of local controversy. The state government has promised to examine the airport’s economic viability. If it doesn’t manage to attract enough air traffic by 2024, Kassel-Calden will go back to being a freight-only airport.

Sundair’s modest fleet will have to work hard to prevent the move. Alas it will only be ready to go just in time for the end of the peak travel season. Mr. Rossello wants to station one aircraft in Berlin and the other at Kassel-Calden.

“There, we have the advantage of being the only carrier on the market,” he said, noting that Sundair now flies from Kassel to Mallorca, Crete, Egypt and the Canary Islands.

And what if the airport were to close to commercial carriers? “Then we’ll simply park our planes at another airport in Germany,” he said.

 

This article originally appeared in the business magazine WirtschaftsWoche. To contact the author: online@wiwo.de

We hope you enjoyed this article

Make sure to sign up for our free newsletters too!