With the current 4th wave of COVID-19 underway in Europe, there is change happening in the commercial aviation market.
Currently, there are more than 25 airlines starting up on the continent, operating varying business models and aircraft.
From Norse Atlantic destined to start long-haul low-cost flights, Ego Airways operating secondary routes with E190 aircraft and Moov due to operate narrow body long-haul and short-haul flights from Basel, one catches the eye of the continent with a completely different strategy.
SupremeFly, based in Austria with its base in Bratislava, which started flights with an E190 aircraft earlier this month, plans to operate under a subscription-based model.
For 79 Euros a month the airline allows passengers to fly 4 one-way trips to more than 12 destinations in its network.
Kambr Media had the opportunity to interview Alexander Stahl, Head of IT and Sales at SupremeFly, who explained to us how the subscription-based model works, the democratization of the European aviation market and why COVID-19 is the perfect time to start an airline.
Tell us a bit about SupremeFly, what its intentions are and how the company wants to transform travel.
Alexander Stahl: The main intention is to revolutionize the whole airline industry in Europe, particularly the subscription model.
The customer should have the opportunity to purchase a subscription with a monthly fixed fee.
And with this fixed fee, the customer has a certain number of flights and she/he can redeem the flights if she/he wants. And if not, then it's up to her/him.
We are living in a subscription century, you can subscribe to everything you want. You can subscribe to a car, you can subscribe to online streaming services, you can subscribe to a flat.
We thought it would be time to give people the opportunity to get a subscription for flying around the world.
We have been in the airline business for five years, doing mostly private charter flights with business people in Europe, mainly in the German market.
"The main intention is to revolutionize the whole airline industry in Europe, particularly the subscription model. The customer should have the opportunity to purchase a subscription with a monthly fixed fee."
From that experience, we learned there are a lot of people who are flying the same route on a regular basis.
We figured that it would be on one side financially possible to introduce a subscription model, and on the other side, it would be very great marketing, appealing to the customer in the year 2021.
Also worth mentioning about 2021 is that it is a year where everything is different compared to other years.
We thought Covid-19 gave us the opportunity to add our own changes, which are being experienced in every sector in the world.
Do you think there are other reasons why Covid is the perfect time to roll out this new business model? What we're seeing is the opening of the market for European startups and you're one of the ones that has the most interesting model, Why is this the perfect time? Is it the cheaper cost base, or are there just better opportunities?
Stahl: There are many factors which are speaking for our model right now. Of course, the costs are very low, and the carriers and the AOC holders are under pressure.
They need to get planes up in the air. This gives us a great opportunity to lease airplanes at a lower cost price.
The whole airline industry was extremely disrupted. You've seen the great players in the airline industry getting a little bit frustrated and a little bit helpless and hopeless due to the situation during the peak of the Covid crisis.
They're now coming back, but with very large losses. Taking a look at Lufthansa, they parked a large number of Airbus aircraft in the Spanish desert because there was no space anymore for them in their business. We on the other hand, have a lot of flexibility.
"There are many factors which are speaking for our model right now. Of course, the costs are very low, and the carriers and the AOC holders are under pressure. They need to get planes up in the air. This gives us a great opportunity to lease airplanes at a lower cost price."
That means we just need a standard number of subscribers and then our whole business model is fixed. So it doesn't matter what happens if the people decide to fly less or fly more. It fits perfectly to our subscription model.
If there's another crisis or another Covid wave, it doesn't bother us because if we have a certain number of subscribers, we are good to go.
We can meet the needs of the customer at every time, at every phase, at every sector of the economy.
We've first chose Airbus. Then we saw that it was a bit too challenging for the beginning, so we switched to an Embraer with 70 seats.
Now we are on a good route to give this project life. In the summer months, we found some great travel agencies who want to partner with us.
Other than the travel agencies, how do you plan on acquiring subscribers? Because as of right now, you stand at 1,900 and it was previously reported that you need 25,000 subscribers.
Stahl: No, it's not 25,000 anymore. It's only 8,000 because we switched from Airbus to Embraer. I don't have to calculate a model based on around 220 seats, but on 76 seats and 76 seats are very likely to fill in a short amount of time.
We need 8,000 interested people, and from them, we calculated a certain number of people who need to subscribe, and then we could fly. We are also already partnering with travel agencies.
We have a certain target group. For instance, customers use Wizz Air for flights from Vienna to Eastern Europe a lot.
We are most likely to start with Bratislava Letisko-Istanbul because we can fill these 70 seat flights very fast with these travel agencies.
We're planning to start with Istanbul and Tunis. From there, it's a very flexible schedule scheme.
Our customers can vote for their favorite destinations for the following quarter. Whatever the customers vote for, is where we are flying.
For instance, we are offering these 14 destinations, and the customers say, okay, in the next quarter, we want to fly to London, Frankfurt and Madrid.
Then we are targeting these three destinations. The more subscribers we have, the more destinations we can fly to.
"Our customers can vote for their favorite destinations for the following quarter. Whatever the customers vote for, is where we are flying."
But for now, our model is very demand oriented. We don't start offering everything because this would put us in a very risky position right at the start of operations.
For now, we leverage travel agencies. They give us a certain number of people and we service them.
That's how we start. We are very cautious right now because we don't want to put ourselves in a position where you read in two years that we made a mistake and can’t continue operating.
How do you plan to use technology? We are seeing airlines like Breeze in the US and Flyr in Norway having these very app-oriented approaches and using very good technology to promote their services as it's now a very data-oriented industry. How will you use technology to attract passengers?
We’ve also implemented some features for that app such as uploading your Covid documents so all the staff on the plane have it.
Regarding the information flow for Covid, we already implemented things like that. Regarding other visions, for example, some employees are assisting an Unaccompanied minor on a flight.
You can book all of this through our app and you can also choose your meal through our app.
This is what we’re offering from a technological standpoint. Due to our technological system, we can flexibly improve and enlarge our application for every need which is necessary. Of course, we are also now in the implementation phase.
We are connecting to the clearing house and connecting to the GDS because strategically it is a very good move as a certain percentage of the seats in-flight will also be available in the GDS or OTAs.
"Due to our technological system, we can flexibly improve and enlarge our application for every need which is necessary."
They can also book seats for a certain flight but there are only a certain amount of available seats for every flight.
Part of the seats are only available for subscribers, and the other seats are only available for OTA/GDS ticket holders.
This gives us the opportunity through technology to split our capacity and to make our capacity available for the more conservative customers who only want to try SupremeFly first with a standard ticket purchase.
If they then fly with us very often and are taking certain flights a month, then we can convert them from a ticket purchaser to a subscriber.
When we are talking about technology, we will publish on our retail website where you can normally also purchase a ticket for the flight.
We have both the subscription model and normal ticket purchasing on the website. For conservative people and for the younger generation.
Since you have the flexibility to fly where your subscribers want, how fast can you start a route? Would you operate a lot of one-off services or do you plan to have very short seasons where you change based on the subscribers demands, weighing the routes between the amount of people who are buying tickets and the subscriber, or operating routes where there are more ticket holders and less subscribers since subscribers have the option to fly 4 one-way sectors?
Stahl: This is a very data-driven industry and we want to give the customer as much freedom as possible.
We are planning at the moment, and this is a very static opinion, it is an assumption and not based on data, but we are planning to give the customer the opportunity to choose the destination every three months, so four times a year, there will be a different schedule.
This is based on an assumption that it would be a good idea. It can be handled differently based on the data we are getting from the GDS and our own app.
It is an open question given to the customer. We are just here providing you the aircraft. Providing you the best service you can get, but at the end you have the most power. It is like Airbnb, right? If you want to stay 2 nights, stay 2 nights. If you want to stay 1 month, stay 1 month.
You have the flat, you pay and you go. You should fly as you wish. This slogan is not only applicable on the destinations but also applicable on a whole concept as a company.
"We are just here providing you the aircraft. Providing you the best service you can get, but at the end you have the most power."
Starting from the German market we are also planning to do customer meet-ups where we have a meeting panel, invite all the customers a few times a year in different cities, talk with the customers and have a good lunch.
Most people will only come for the free food. The real intention though is to be connected to the customer personally and feel that we really work for them. We don’t work for any corporation.
We are independent. The money comes from our own pockets and we are working for them. We are working for 100% customer satisfaction, every customer's voice is noticed and will be acknowledged to our own improvement.
Are you trying to bring back brand loyalty to leisure passengers, typically in an industry where customers are no longer loyal to an airline other than business travelers?
Stahl: That sums it up. In German our slogan is “Verbindet menschen” which translates roughly to connecting people.
We didn’t write “connecting people” because most of our customers would think that we’re part of Nokia because that’s their slogan.
That's our intention. We really want to connect people, we want to connect communities, we want to cut borders and ultimately bring people together. We’re a people's business. Of course we want to be profitable because otherwise we can’t exist.
This is a sign we’re from the new generation. Our intention is that this is a people's business. Don’t say “Ok, we’re better than everyone.”
We say “We provide you a plane where you can travel the world,” and I think no one is talking to customers on this level.
"We really want to connect people, we want to connect communities, we want to cut borders and ultimately bring people together. We’re a people's business."
No one holds events and will sit with them on the same level, talk with them about the future and give the opportunity for them to provide their ideas and get heard by industry leaders.
What we’re seeing now is legacy carriers are losing control as the commercial aviation is gradually shifting towards a leisure-oriented market. Where will SupremeFly stand 5 years from now when the market will be fully democratized (for instance, we’re seeing 25 new airline start-ups pop up in Europe currently)? Will this be the first time that the market will be in the control of smaller carriers as they hold more lean cost strategies compared to legacy carriers?
Stahl: We want to be a main operator in Europe. We want to convince the younger generation of this model and teach the legacies a lesson of how to treat customers of this generation.
This is our main objective as we think the way of communication of airlines nowadays is not meeting the standards of the new generation.
They are very free, rebellious and open minded. You cannot put them into a box, and we are also not putting customers in a box.
We want to fly to every available city in Europe in the next 5 years and we are mainly concentrating on partnerships such as promoting F1 in Istanbul, European Championship in any city such as in Portugal or Spain.
This is a great opportunity because we can gain through these events a lot of customers and they can fly at a very competitive price to their beloved destinations.
"We want to fly to every available city in Europe in the next 5 years."
For example, if I’m a fan of Barcelona or Real Madrid, a team in whatever city. I can say 2 times a month I will fly to a city to watch a game, for example at Santiago Bernabeu and have a great time.
Otherwise it wouldn’t be possible because I would pay a lot of money to only visit this city.
We don’t only have business people or VFR traffic, but people who have interests in other things such as sports.
It’s interesting how you’re building this loyalty purely towards the leisure customer. Do you see the future market being purely leisure rather than business oriented (20% of travelers being business = to 80% of profits coming from them)?
Stahl: One-hundred percent because it is very easy to get leisure travelers to come to us, through communities and meetups.
We’re basically going to our friends, our family and to other people working in travel agencies. We’re telling them the idea.
They say it’s a great idea. They spread the word from word of mouth. We get a lot of attention in the press. We spent under a few hundred euros on marketing, spending nothing basically.
We think we can get this attention through word of mouth to leisure travelers more strongly than business travelers.
Talking about business travelers nowadays is not the same as ten years ago. Ten years ago, they wanted to be in a closed seat.
No one should see them. They didn’t want to see people traveling in economy class.
Now you can make money very easily and a lot of business people wear normal clothes, have a lot of money and don’t care about status.
They want to have a good flight but status is not as important as it was in the past.
Now, if you have a lot of money and make millions you say you want to have a better life, but don't need to be a different person. There doesn’t need to be a border between me and the people in Economy class.
"We think we can get this attention through word of mouth to leisure travelers more strongly than business travelers."
We also have a lot of upselling strategies through our web and app to gain some more income.
We mainly want to make more income through corporations and business deals with larger companies. We mainly want to pay our fixed costs (payroll, etc.) through corporations and not through the customer.
For instance. you can have wi-fi on the airplane. We have a large mobile provider in Austria, T-Mobile. We are in the middle of planning a deal with them and we want to put their advertisement on our plane saying “Staying connected with T-Mobile not only at home but also in the air.”
We want to find the synergies and connect them by getting a lot of attention through deals like this to put their logo on the frame of the plane and their service on our airplane.
We have some other great strategies also for when you’re coming to Austria or going to another country, T-Mobile is a provider in many countries.
You also want to have internet during your stay and don’t want to use roaming as it’s a little bit too expensive.
We will connect these points together. We will work with companies who can provide a good service for our customers on their travel route.
We’re giving the passengers the service in the air and will work with other companies who will give them the services needed on the ground or in any way connected to their travel.
Kambr Media and the author wish to thank Alexander Stahl for this opportunity. As of now the carrier currently is operating only 2x weekly flights between Bratislava and Tunis and from December, will also fly from Bratislava to Berlin, Dubai and Izmir all presently bookable via their website.