Planning a trip to France this summer, but leery of jam-packed planes and steerage-class seating? La Compagnie, the all-business class airline celebrating its 5th birthday this week, might be an alternative. In fact, if you book by June 13, the company is offering round-trip flights from New York/Newark to Paris for as low as $1,000. Yes, business class.
All-business class airlines are not new, but they’re not all that common either. A number were started in the first decade of this century, but by 2009, Eos Airlines, MAXjet Airways, SilverJet and L’Avion all ceased operation, as oil prices hit $100 a barrel.
(Full disclosure: I own stock in Jet Blue, American Airline and Southwest.)
While all-Business Class has previously failed, based on its five-year staying power, La Compagnie may be onto something. That can be boiled down to two facts.
- In 2018, passengers in First and Business Class cabins accounted for just 5.4% of all international ‘origin to destination’ traffic, yet those passengers generated 30% of revenues.
- Those people sitting up front didn’t get there by accident; whether they travel on business or leisure, they appreciate a good deal.
To reach the first group, there is at least one all-business class “airline within an airline,” British Airways’ rather bizarre flight from the UK to NY. BA1, or Club World London City, consists of a tiny 32-seat, business class-only Airbus A318. Flights include a short take-off from London City Airport near that city’s docks and a stop to refuel in Ireland while passengers pass through US customs.
No such restrictions appear to hamper La Compagnie. The company currently flies non-stop to two destinations, Paris and Nice, from New York/Newark (EWR). The flight to Paris Orly Airport takes about 7 hours non-stop; the flight to Nice about 7 ½ hours.
About 60% of La Compagnie’s customers are business travelers, 40% are leisure, an area growing particularly on the new Nice route. Jean-Charles Perino, Co-Founder of La Compagnie, says, “It’s about 80% Americans; a lot of Americans who go to Nice or the Cote D’Azure own apartments there.”
About 60% of flights are booked from the La Compagnie website, the other 40% by corporate travel departments and travel agencies.
Interestingly, a company spokeswoman said about 20% of customers currently “self-connect.” That is, they might take a United flight from SFO to EWR, or an American plane from DFW to EWR, then fly on to France on La Compagnie.
The La Compagnie experience starts with lounge access in Newark and Paris. You’ll speed through checkpoints with TSA premium access and its equivalent in Paris. Passengers get to check two suitcases of up to 23 kilos each, as well as two carry-ons of up to 18 kilos each, included with their fare.
On-board, Perino says passengers have “all sorts of French expectations.” The company offers French cuisine on-board, along with French wine and Piper-Heidsieck Champagne. Each passenger is given an individual iPAD for entertainment on the company’s 757s, while the A321neos offer seatback entertainment. While WiFi is included only on the new A321neos, the airline offers passengers a selection of movies, music and TV on both aircraft types.
As for pricing, Perino says, “We are not rich. We sell round-trips for around $2500, versus $4500 to $10,000. A quick search on Expedia for a departure from the NYC area to Paris on July 31, returning August 10, showed a stark price disparity. La Compagnie came up at $2,498 roundtrip. Business Class on Delta was $8,174, while both United and American clocked in at $8,177.
La Compagnie currently operates two Boeing 757 aircraft and a brand-new Airbus A321neo. Both the 757s and the A321 are outfitted as all-business class aircraft. The 757s have 74 lie-flat seats, while the A321neo has 76. A second A321neo is expected to join the fleet in September, with one of the 757s being retired.
Perino is excited about the arrival of the A321neos, because of the extra seating, many new features (like all-cabin unlimited high-speed Wi-Fi supplied by Viasat Inc.) and particularly, fuel economy. “The A321neo is 30% more fuel efficient than the 757,” he says.
La Compagnie remains a private company. “We want to contribute to the airline industry and stay private,” Perino says. He adds that they had about $70 million in revenues in 2018 and were hoping to achieve profitability this year, but “issues with the Yellow Jackets and rising fuel prices” postponed that goal. Putting both fuel-efficient A321neos in service for a full year will help achieve profitability by 2020, Perino said.
Although it’s hard to believe, the highest 10% of one-way fares actually dropped by nearly a quarter at American Airlines since 2014, 16% at United, and 12% at Delta. Hungry competitors like JetBlue and Norwegian are also targeting the profitable space, which could put pressure on La Compagnie as well.
La Compagnie’s Perino is unconcerned about competitors cutting prices. “We started the airline with a lot of competition. We grow this product in front of Air France, Delta, United, American…It’s a unique all-business class product, different from the multi-class service other airlines offer. JetBlue is a very powerful brand, but they are not doing what we are doing.”
Perino says the airline is on-time roughly 90% of the time. It flies about 80% full, almost identical to the world 80.4% load factor in 2018, although as Perino points out most load factor statistics measure how many seats are full in total, not how well airlines do at filling pricy business and first class seats.
While many travelers think they can upgrade with frequent flyer points, business class seating is often scarce and the points needed inflated, especially during the peak summer months. Perino says “Our customers are prepared to pay with actual dollars [instead of hoarded frequent flyer points]. People are fishing for better rates, and part of our DNA to offer Business Class at a low price tag.”