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Fly me, I'm ready


INTERVIEW

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Published Date: 22 January 2006
GIVEN the frugal nature of the low-cost airlines business, it would not have been a surprise to find Tom Dalrymple, the boss of Flyglobespan, headquartered in spartan offices between the toilets and the check-in desk. After all, Stelios Haji-Ioannou famously set up his easyJet operation in a tin shed at Luton Airport with two desks and three phones. Instead, Dalrymple's command post is in the converted former Scott's Porage Oats mill in Edinburgh's wealthy Colinton village.
Nor has he fallen into line with his rivals' love of provocative soundbites and stunts.

But there is one thing he does share with his competitors: a market that is getting increasingly crowded and tougher. In the past fortnight there have been ne
w entrants such as Wizz Air flying to Poland and British Airways' revamped regional airlines business, BA Connect. Their arrival follows the demise of EU Jets, Duo, Debonair and others.

Dalrymple felt the full blast of competition last week when he was forced to pull out of two established routes from London to Scotland, and a planned service from Edinburgh to Bournemouth, because of poor ticket sales.

Despite this setback, Dalrymple reckons he can handle the turbulence, and is pushing the throttle even harder, drawing up ambitious plans to link Scotland with long-haul destinations in Canada, the US and elsewhere.

As he speaks he wanders across his office and picks up one of the model Flyglobespan aircraft arranged around the room. It indicates, literally, a hands-on style.

He admits the high price of oil is making life hard. "It is a horror story. Because we hedge for fuel prices, nobody feels the pain of price rises for six to nine months. That is what is happening now. It has to be translated into price rises or lower profits, and we are in a market where we cannot dictate our own prices."

It is a subject that clearly fires him and he delves enthusiastically into the process of applying for landing slots and the use of cooking oil as a fuel.

Winning the increasingly tough battle in this crowded market will be down to the simple things, he says: innovation, customer service. From this spring, passengers can check in online, and a bigger on-board baggage allowance will cut down the sometimes soul-destroying experience of watching suitcases go round the baggage carousels.

Flyglobespan was the first UK airline to fly with wingtips which were slightly curled at the edges, a feature which has cut about 7% from its fuel bill - an advance which has become much more important as the price of oil has rocketed.

The company's secret weapon is a collection of convenient airport landing time slots which were amassed while the rest of the industry was going through a downturn in the wake of the 2001 terrorist attacks on the US. Times are carefully chosen to fit destinations - for example, flights to airports which are popular with second-home owners arrive in time for the owners to do a bit of shopping, and sit down with a glass of wine before sunset.

Dalrymple believes these slots are the airline equivalent of gold dust. "This is what will protect us through the bloodbath environment, which is what we are in now."

He also knows that giving the customer what he wants is vital - and that includes good service. "When you check in, you want someone to smile at you. We can't piss off our customers."

He is also challenging another perceived wisdom - that low-cost flights mean short flights only.

Flyglobespan will take its first passengers from Glasgow to Orlando in June, while his next target is Canada.

As a travel agency, Globespan has been selling tickets to Canada for its Air Transat partner, so launching its own service would be a logical step.

The market for flights between Scotland and Canada is tough, though - Air Canada was forced to pull out of the Glasgow-Toronto route in October after struggling against competitors such as Zoom, owned by the former Direct Holidays boss John Boyle and his brother Hugh.

Dalrymple is up for it. "We can compete. We have been in this market since 1974, and almost no airline can do everything. This [long-haul expansion] is hugely important for us."

Other likely destinations include Boston, Los Angeles, Las Vegas, San Francisco, the Caribbean and South Africa. They will be served from a selection of UK airports, including Newcastle, Manchester and Cardiff, as well as Edinburgh and Glasgow.

So far, Flyglobespan has been financed purely out of ticket sales, allowing Dalrymple to remain the sole shareholder. But the step change Dalrymple is talking about now will require a massive injection of cash. "You are looking at 10 jets at $100m (£60m) each. It is not a complicated sum. "

So this year, he will sound out venture capitalists and banks about taking a stake in the business.

He is also considering ways of giving his employees a stake.

"The game plan has to be the succession, and about involving all the people here in the succession. Somehow we have to come up with a way of keeping the company's energy intact. Because though this is owned by one man, it is not a one-man band."

That one man, though, is behind his desk by 7:30 every morning, his endurance perhaps fuelled by the giant-sized mug of coffee.

Dalrymple has come a long way from Mackays travel shop in Edinburgh where he started out as an office assistant. He set up Globespan as a travel agency in 1974, and its airline offshoot in 2002.

Last week Globespan Group revealed a 70% rise in profits and a 66% increase in sales for the year to October 2005, with most of the growth coming from the airline operation. Flyglobespan enjoyed turnover of £69m out of Globespan Group's £163m. That is well behind rivals EasyJet and Ryanair, on sales of over £1bn each, but not bad from a standing start in three years.

Dalrymple got the idea when the airline industry went through an upheaval following 9/11.

Obtaining a first licence from the Civil Aviation Authority can take years, but Dalrymple wanted to get ahead fast. He acquired a freight carrier which had gone into administration, and set up the airline with a pair of nearly-new planes from Deutsche BA. "I realised that with a bit of marketing, we could become a Scottish airline, a big fish in a small pool. £2m or £3m in advertising goes a long way in Scotland."

The company's determinedly low-tech adverts featuring real staff dancing to cheesy music have almost achieved cult status.

"They're terrible, aren't they?" grins Dalrymple. "But the guy at STV who does them thinks they are great and our employees love being in them."

Despite his generally sunny temperament, Dalrymple gets fired up over the taxes which customers have to pay on air fares, and the Scottish Executive's Route Development Fund subsidies for airlines flying to Scotland.

The Executive particularly irritated him when it gave easyJet money to fly from Edinburgh and Glasgow to Geneva, competing directly with Flyglobespan's unsubsidised route.

Flyglobespan's rapid expansion means the group has virtually outgrown its base which is likely to mean goodbye to views over Colinton Dell. One option is a move to the former Drybrough brewery site in Craigmillar, though Dalrymple says such a flit would depend on improved transport links, including a railway station or tram stop.

Local roots are a positive selling point, but they do have their downside. "The reality is that for two-thirds of the population of Scotland, it is easier to fly from Glasgow. But we are an Edinburgh company, and we are committed to flying from here. If we announce a route from Glasgow but not Edinburgh, the complaints come flooding in."



The full article contains 1339 words and appears in Scotland On Sunday newspaper.
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