Sunday, August 05, 2007

Astraeus plans to cancel flights due to low demand

Keith Collins believes Astraeus Airlines pulled out of St. John's because they were forced out."They did not abandon this market," said the St. John's International Airport Authority president and CEO. "The market abandoned them."
The London, England-based charter airline announced Thursday that, due to low customer demand, it will cease its service between St. John's and London-Gatwick by the end of the summer.
The cancellation will have no impact on Astraeus' regular, twice-weekly service to Deer Lake. Flights, which have primarily serviced the Humber Valley Resort's clientele for the past two years, are flying as usual.
The news of the airline's discontinuation in St. John's came as a surprise to Collins, who had been prompted by the public to lure a year-round carrier to England. "The market has spoken and we're baffled by it, to be quite honest," he said. "It's a very disappointing development for us and this community. We've lost our year-round partner to London."
The service, which began in May, had reinstated the long standing, year-round air link with Europe, which was terminated when Air Canada cancelled its daily flights between St. John's and London's Heathrow Airport last September. The move was an attempt to satisfy Halifax-bound passengers, who were unhappy about having to pass through customs in Newfoundland. St. John's new partnership with Astraeus was pegged by many residents and politicians to be a triumph for business, tourism and travellers in this province.
However, the initial interest failed to materialize. Low ticket sales this summer and bookings for the fall meant the company was losing money. Passengers were, instead, "overwhelmingly" choosing to fly Air Canada - by a ratio of 10 to one. Air Canada resumed its direct route to London this year with a seasonal service, running from April to Sept. 4."
That means travellers are actually choosing to fly out of Halifax on Air Canada rather than flying direct out of St. John's on Astraeus," Collins said. "That's really baffling because that's exactly why we were asked to find another partner. "Collins figures passengers chose Air Canada because it was familiar, plus the fact they could earn and redeem air-mile points. He also noted that the travel agent industry here has proven to be loyal to Air Canada.
He said on average this summer, between five and 30 passengers were flying on Astraeus's 136-seat aircrafts.And the trends for the fall didn't look any rosier. "I'm confident that if they saw the numbers improving in September and October, they would've stayed," Collins said. "It was really quite surprising to them."The airline had invested heavily in providing the service, in terms of air craft, personnel recruitment, training, marketing and even a new online reservation system."Astraeus really had no choice, since it were losing significantly on much of their flights," Collins said. "They had to make a business decision."While the airport will lose money from landing fees, Collins said the biggest loser will be the community, which will not have a direct route to England during the fall and winter months.
As a result of Astraeus's pullout, Collins doubts St. John's will find another international airline in the forseeable future to fly to London."Given what's happened and given the choices the market has made, it's hard for me to credibly present this route as an opportunity for another international carrier, which is really unfortunate," Collins said. "I'll never say never. If market factors change, if this becomes a little bit of a learning experience for the market, a new entrant down the road might be better received."
Full articles on The Telegraph - or or COOP

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