- Breeze Airways is finally launching flights but not all are sold on its business model.
- Analyst Henry Harteveldt is concerned about the airline’s route network, high fee structure, and tech-focused model.
- Breeze seeks to create demand with low-cost leisure routes to underserved cities across the US.
- See more stories on Insider’s business page.
Breeze Airways is finally making its debut on May 27 just in time for Memorial Day weekend and the start of what will likely be a busy summer season.
An initial slate of 39 routes across 16 cities will launch between May 27 and July 29, boasting fares are as low as $39. The hub-skipping routes allow passengers to fly directly to and from leisure destinations without having to change planes.
Most of the routes also don’t feature direct competition, giving Breeze a leg up in drawing passengers and stimulating demand. But not all industry experts were sold on the airline after its launch announcement last week.
Henry Harteveldt, an industry analyst and the cofounder of Atmosphere Research Group, has been “disappointed” with what he’s seen so far.
Harteveldt has worked for some of the US’ leading airlines, both current and former, like American Airlines and Trans World Airlines, and also served as the marketing director for Donald Trump’s startup airline, Trump Shuttle.
Here’s why he’s not impressed with Breeze.
Breeze’s route network opens itself up to competition
“The primary concern I have about Breeze is the airports it’s serving,” Harteveldt said. “The cities are all good cities, but the airports have no protection around them.”
Breeze chose the cities of Tampa, Florida; Charleston, South Carolina; Norfolk, Virginia, and New Orleans as its four main bases, which all see existing service from many of the country’s largest airlines. Harteveldt says that there’s nothing stopping a major player like American or Southwest Airlines from matching some of Breeze’s routes or lowering fares to those cities in order to compete.
“No airline is going to give up a micro point of market share to a competitor, whether it’s an established airline or a startup, without a fight,” Harteveldt said.
Harteveldt compared Breeze’s initial route network to fellow startup Avelo Airlines, which relies on smaller alternative airports as the backbone of its route network. Hollywood Burbank Airport and Tweed-New Haven Regional Airport, for example, are Avelo’s main bases and offer some protection from carriers since there’s a limit to how many flights and airlines the airports can handle.
Breeze spokesperson Gareth Edmonson-Jones says that competing with the airline might be more difficult for the major players. Smaller Embraer E190 and E195 fleet of aircraft are being used initially, with no more than 118 seats on the larger model, allowing Breeze to be more competitive on routes with traditionally low demand.
Breeze wants to be a “seriously nice” airline, but is there such thing?
Ultra-low-cost airlines like Spirit Airlines and Frontier Airlines have gained negative reputations for customer service, despite efforts to remedy, and both Breeze and Avelo have worked to promote niceness and friendliness in response. But Harteveldt isn’t convinced that an airline can be “seriously nice,” as Breeze puts it.
“‘Seriously nice’ is a corporate attribute, but it’s not a marketing position,” Harteveldt said. “It’s not something you can hang a brand on.”
Harteveldt points to Breeze’s tech-focused approach that does away with call centers and requires passengers to use a mobile application or computer to communicate with the airline. Companies like Uber and Lyft rely on device-based communications but it’s never been tried before in airlines.
“A concern that I have is that the target Breeze customer may be less likely to own a smartphone, they may be less likely to own tablets, they may be less likely to use technology in their personal and work lives,” Harteveldt said. “A nice airline doesn’t push people to technology.”
One incident involving a Breeze employee can also threaten a “nice” airline’s reputation, Harteveldt says.
“Nonstop routes and low fares are way nicer than flying through hubs at high fares,” Edmondson-Jones said.
A higher fee structure than competitors
Another reason Harteveldt isn’t sold on Breeze’s seriously nice attitude is because of the airline’s high fee structure.
While baggage fees are lower than most competitors at only $20 for either checked or carry-on luggage, there are caveats. It will cost $50 to pay to check a bag at the airport instead of doing so online, for example, and another $50 if a Breeze airport staff does it.
Printing a boarding pass will also incur a $3 fee that goes up to $9 if an agent has to assist. Seat assignments also start at $10, although families with children under 12 can choose their seats for free.
“Breeze has basically outlined a list of ways where customers are going to think they’re not a very nice airline,” Harteveldt said. “Charge me $3 to print a boarding pass, charge me $50 to check a bag in with an agent. What’s nice about any of that?”
Rival Avelo’s fee structure is more lenient, says Harteveldt, although the two don’t directly compete yet.
Rushing to start before Memorial Day
Breeze started selling tickets for its flights just six days before the first flight was scheduled to depart. The delay was due to the airline not having its air operator’s certificate, or AOC.
“The biggest concern that I had about the launch announcement is the very short window of time the airline has chosen to give itself between announcing that his flights are open for sale and its first flight,” Harteveldt said. “They will give themselves very little time to build up a base of bookings.”
The result may be poorer bookings than if the airline pushed back its launch since travelers are starting to book trips further and further out. Harteveldt suggested instead that the airline delay flights by a few weeks to really get the kinks out before the first passenger is welcomed onboard, as well as build a customer base.
Breeze did delay some route launches until later in the summer, which may give it more time to sell tickets.
Flight attendants that are also college students
Breeze’s plan to use college students enrolled in online courses with Utah Valley University has drawn ire from big labor, and Harteveldt isn’t a fan either.
“If you are a full-time student, you’ve got a lot of responsibilities and if you are a full-time flight attendant, you’ve got a lot of responsibilities,” Harteveldt said. The program, he says, could have unintended consequences like flight attendants that expedite an in-flight service so they can have time to study.
Breeze defended the program in a prior statement to Insider, saying it gives young people an opportunity to lower their education costs. A total of $6,000 is given in tuition reimbursement on top of a monthly $1,200 voucher, among other perks.
“If you’re a fully trained flight attendant, you’re a fully trained flight attendant,” Edmondson-Jones said. “It’s not like if you’re 18 years old, you can’t be a flight attendant.”
Harteveldt also says that Breeze may have missed an opportunity to get great talent from the pool of flight attendants that were furloughed during the pandemic, as rival Avelo did.
Lack of onboard consistency
Breeze will have two types of aircraft flying its first slate of routes, the Embraer E190 and Embraer E195. Both are near identical, with the E195 slightly longer than the E190, but will feature different onboard products.
Standard legroom on the E195 will be 31 inches while the E190 will offer 29.
“The core component of a brand promise is consistency,” Harteveldt said. “From the outset, Breeze is going to be confusing customers which, by the way, is not a nice thing to do.”
Edmondson-Jones responded by saying that the difference in the Embraer aircraft sizes and where the aircraft’s doors are placed determined the legroom.
But the lack of consistency extends outside the aircraft. Breeze will be bringing on the Airbus A220-300 later this year and will operate two distinct fleet types.
All ultra-low-cost airlines in the US stick to one fleet type, whether it be all-Boeing 737 family or all-Airbus A320 family aircraft. A single-fleet operation keeps pilot training and maintenance costs down, as well as maximizes efficiency in a pilot pool.
“Breeze is creating unnecessary complexity for itself by having a more complex fleet,” Harteveldt said.
Tech-focused but not offered onboard WiFi on its jets
Neeleman touted Breeze as a “tech company that also happens to fly airplanes,” but it’s Embraer aircraft are noticeably low-tech. In-flight WiFi, for example, won’t be offered on the aircraft.
“There are a growing number of consumers who expect WiFi to be available everywhere they go, including airplanes,” Harteveldt said. “And if Breeze is hoping to attract millennial and Gen Z consumers as its customers, they’re going to be disappointed that there’s no WiFi onboard on the plane”
Breeze will offer streaming in-flight entertainment including television shows and a map feature. And the airline’s Airbus A220-300 fleet will offer WiFi as the aircraft will be performing longer flights.
But onboard WiFi goes beyond internet browsing and can have some cost-saving benefits for an airline. Harteveldt noted that WiFi can be used for fraud protection if the airline plans to offer in-flight purchasing, and it can be used for “smart aircraft” applications where the airline can monitor the performance of an aircraft’s systems in real-time.
What Harteveldt likes about the airline
“I like the fact that we have a new budget airline that’s entering the US that will inject fresh competition that will help compete with price and is hopefully going to provide very exciting jobs for a lot of people,” Harteveldt said. “More airline competition is needed in the US.”
Harteveldt is also a big fan of the Airbus A220-300 aircraft that Breeze will be flying later this year.
“The A220-300, in my opinion, is one of the best narrow-body airplanes that has been introduced because of the enormous utility it offers to its airline operators,” Harteveldt said, noting that the airline should’ve waited to start flights with the A220 over the Embraer jets.
The Airbus A220-300 will allow Breeze to fly to Hawaii, Europe, and even South America if the airline desires.
But in order to be an effective player in the airline industry, it has to survive and thrive, which Harteveldt says isn’t guaranteed, even for David Neeleman.
“Breeze absolutely will be able to attract some customers,” Harteveldt said “The question is, will they be differentiated enough to attract enough customers, and will they attract enough people to be profitable?”
Source: Read Full Article