French Bee relies on the United States to complete its development

“We had written a scenario where French Bee would have six planes”. Established by the shareholder Jean-Paul Dubreuil, president of Groupe Dubreuil Aéro, and Marc Rochet, president of the company, during the launch of the low-cost long-haul company in 2016, this objective is now on the way to being achieved. The sixth Airbus A350 will arrive this winter. And to fill it, French Bee is once again betting on the United States. While the first flight to Los Angeles is about to take off on April 30, the company has just announced the opening of Miami in December. French Bee should then have reached a plateau in its development.

By opening Los Angeles and Miami in quick succession, Jean-Paul Dubreuil believes “to be catching up” taken for two years with the Covid-19 crisis. With San Francisco, launched in 2017, mainly to reach Papeete in French Polynesia, then New York last year, French Bee is starting to have a developed American network. This summer, it will serve New York daily, Los Angeles up to six times a week and San Francisco three times. And this winter, upon receipt of its last A350 on December 15, the company will add Miami with three weekly flights.

New York, San Francisco, Los Angeles: French Bee positions itself on the major American lines

A sizeable market

A choice justified firstly by the size of the American market. French Bee has thus positioned itself in cities offering a large volume of passengers and capable of supporting year-round flights. This is not the case for Canadian cities, for example, except for Montreal. According to Jean-Paul Dubreuil, this emphasis on the United States was also imposed by the need to have “of a bouquet of destinations, under penalty of not being credible”.

As Marc Rochet reminds us, this development on the American market is greatly facilitated by digital tools that allow on-site marketing with small teams. Moreover, the line to New York, launched in the summer of 2021 when the entry of foreign nationals into the United States was almost impossible, only worked with American passengers until the lifting of restrictions in November. . And more than half of the sales are still made in the United States today.

French Bee does not intend to abandon its core target, namely the service of overseas territories with Papeete in French Polynesia and especially Saint-Denis de la Réunion. Jean-Paul Dubreuil has also praised the solidity of this market despite the crisis. With a potential of 1.3 or 1.4 million passengers, the line to Reunion is thus the largest in the network. French Bee logically assigned its A350-1000 there – the largest aircraft in its fleet with 480 seats, the other 4 being A350-900s with 411 seats. And the second “1000” will also be deployed to the southern island.

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The critical size reached this year

After this phase of development, French Bee may well not seek to go higher and level off to find its cruising speed. “We haven’t written the rest, because that’s already a lot of objectives with the full use of our six aircraft with an average of 5,200 flight hours per year”, explains Jean-Paul Dubreuil. He pursues : “We have shown that we are capable of going all the way with our approach, but we also believe that we will not go any further. The scope of our fleet seems to us to be already largely sufficient within the framework of our family company. . Is big is beautiful? I’m not sure.” He thus estimates that French Bee has reached its critical size.

Asked about the need for the arrival of a new investor to plan new developments, Jean-Paul Dubreuil evokes the failed merger with CMA-CGM last year: “It could have been a solution, but I congratulate myself today for not having gone further because we do not have the model at all even if we are family groups. It is not easy. Our success comes also our responsiveness and the agility of the shareholders.” And he doesn’t seem unhappy either “at a time of having missed the wedding with Corsair”.

Recapitalized, French Bee and Air Caraïbes aim for breakeven in 2022

No return to the green in 2022

French Bee, like its big sister Air Caraïbes, must already focus on returning to profits. After being in the green for years, the Dubreuil Aéro group has been hit hard by the health crisis. Faced with the losses, he had to recapitalize his two companies to the tune of 15 million euros each at the end of 2021. This should allow a return to equilibrium this year, but it will probably be necessary to wait for one more exercise.

The first quarter, marked by the Omicron variant and then the war in Ukraine, was indeed very complicated. The level of reservations over the first few weeks was quite low, while the price of fuel exploded. Even if sales have been accelerating strongly for the past few weeks, this should not be enough to turn green for the year as a whole.

This does not prevent Marc Rochet from hailing a “real recovery in demand”. According to him, engagement levels on most of its routes are matching or even exceeding those of 2019. All segments seem to be on the same dynamic, even if there is a difference of a few weeks due to shorter booking times. on the United States. The boss of French Bee specifies that this requires his teams to have great agility in managing capacities. Thus, only flights where the margin on variable costs is positive are confirmed.

Variable costs that increase with soaring kerosene prices. The fuel item has thus doubled in one year to reach 28% of costs. Especially since French Bee had decided to reduce its level of coverage on its fuel purchases, after being caught off guard by falling prices and the cessation of flights in 2020. It therefore had to resolve to increase prices. of about 10% at Air Caraïbes to absorb the additional cost without killing the recovery in the bud and remaining competitive against the competition, in particular the American companies which have postponed the increases on domestic flights but not on international ones. However, Marc Rochet concedes that it will be necessary to go further, perhaps up to 14 or 15%: “So far the market has responded, but we will have to adapt to these extremely high fuel prices”.