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02 May 2004
Sunday Herald
Budget flights to take a great leap forward with the brothers Boyle

For Hugh and John Boyle it is a kind of homecoming. A return to a business that has been good to them, back to the kind of enterprise in which they made their respective fortunes.
But, six years on, the shape of the travel industry has changed radically so the kind of business the brothers are now running is very different from their Direct Holidays company, which was sold to Airtours in 1998 for £84 million.

Just as Direct Holidays carved out new market territory by applying the over the phone selling techniques of insurer Direct Line to the holiday market, Zoom Airlines, which began flying this weekend, also breaks new ground.

John Boyle says: “We changed the way the public booked their holidays to a large degree.” Hugh Boyle adds: “In business your timing has got to be right and I think the timing is right here, things are changing in the travel business.”

The Boyles are taking the low-cost airline model, so successfully operated by companies such as easyJet and Ryanair, and applying it to transatlantic flights.

Hugh says: “We’ve taken the low cost model and amended it for transatlantic flights. Flights from Glasgow to Calgary are 10-and-a-half hours so you couldn’t do it the way easyJet have. You’ve got to has more legroom, you’ve got to have movies and other services.”

The cheapness of the flights can be achieved through a range of factors. Leasing of planes is cheap because of the glut of aircraft on the market, the Boyles have been able to put in a cost-efficient bespoke computer system and with the majority of flights being sold online – 82% of those sold so far – staff costs can be kept low as well.

Part of the gap in the market that Hugh Boyle perceived was due to the current problems facing Air Canada which is in bankruptcy protection and faces an uncertain future.

“Air Canada has a huge percentage of the market and no-one knows what’s going to happen there although I very much hope that it will survive because Canada does need a national carrier.”

The first flights this weekend is the fruition of two years of hard work headed by Hugh Boyle who moved to Ottawa around the time the Direct Holidays deal went through. He is the chairman of the airline and has recruited a chief executive to run the business day-to-day.

But Hugh Boyle says the response has been far better than they expected. “We totally underestimated the market, how many people want to travel between the two countries to see relatives or whatever.”

To date about 60% of the bookings are being generated from the UK and 40% from Canada. John Boyle says: “We are delighted at the bookings we have had from London which are ahead of budget. We knew we would do well in Scotland where we are known but thought it would take a lot longer to get established in the London market.”

Boyle says a typical Zoom fare will be £163 compared to the British Airways fares of around £526 single or £630 return or Air Canada which charges £715 one way to Vancouver or £550 return.

“The customer has never before had perfect knowledge. Through the web we’ve got a marketing tool that can display our services cheaply, effectively and transparently,” John Boyle says.

 


John Boyle says that travel companies were causing consumer dissatisfaction with the way the pricing structure was organised. Someone booking a year in advance would find someone sitting on the flight next to them had got the same holiday much more cheaply by booking two weeks in advance.

“That’s not the way we do things at Zoom,” he says. “Someone booking the flights early gets the cheapest rate than the person who has to book the day before, for an emergency or whatever, who will pay the most. Our pricing structure is fair and transparent and if that means we fly with some empty seats so be it.”

The other service that Zoom offers is flexibility, Boyle says. Rather than being forced to fly and return from and to the same destinations people could travel from Glasgow to Calgary and return from Vancouver to Gatwick. The Boyles believe that this will prove particularly attractive in that it will allow people to fly in to Calgary, travel down through the Rockies, visit their relatives and then return from another destination.

Zoom, which is an Ottawa-based company, will fly scheduled transatlantic flights from Calgary to both Glasgow and Gatwick. It will also fly year-round, direct from Toronto, Ottawa, Halifax, Edmonton and Vancouver to Gatwick and Glasgow using its fleet of Boeing 767-300 aircraft with 268 seats – the same type of aircraft that established rival Air Canada flies on these transatlantic routes.

The aircraft affords more leg room than the 365-seat configurations run by many economy carriers. There is also a 20kg baggage allowance on all flights, preventing the extra charges other low-cost airline flights charge for luggage.

Passengers can also opt for a premium economy service at £75 extra which gives additional benefits including better cabins and extra frills.

Zoom will also operate low-cost winter flights to Canada from £89 one-way which they expect will generate demand from skiers in addition to festive season family visits.

The early response to the services since they were announced in September has already led to expansion plans being put in place. Zoom currently has two Boeing (extended range) aircraft leased and plans to add a third later this year. The number of aircraft will go up to five next year from which time Zoom will increase its scheduled services.

At its height Direct Holidays took about 10% of the UK package holiday market and the Boyles hope they are on to another winner here.

Ironically, despite being one of a tiny number of new transatlantic routes, Zoom is getting no support from the Scottish Executive’s route development fund.

John Boyle says: “To qualify for the subsidy we would have needed to fly to the same place every day. For us to do that would have been commercial suicide.

“It seems ridiculous that when we are producing a route that will provide real economic benefit we can’t get the subsidy that others do but we can’t do that because of the way the law has been written.”

Ironically, with 40% of the flights originating from overseas Zoom may be one of the services making the biggest contribution to the Scottish tourist trade.

“I thought that the whole idea of devolution was to make government more accessible so that laws that don’t make sense could be rewritten quickly but that hasn’t happened in this case.”

 



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