Bluenose Airways – A new airline for Hungary?

The news about the failure of Malev, the Hungarian airline, was still hot on the wires when members of the Malev family were already scheming to get their beloved airline back.
Of course first they, like the families of other failed airlines before them, had to face the indignity of seeing the Malev fleet grounded and standing around aimlessly on the apron at Ferihegy Airport. Even more heart wrenching was the time when the aircraft had to return to their owner, the leasing company in Shannon. They flew for the very last time with a Malev flight number, humming high in the European sky never to return.
There were as many views as people concerned about the causes of Malev’s failure and these ranged from political mudslinging via conspiration theories to correct business considerations. The story of Malev will probably be written by somebody one day and careful research might even reveal what exactly had gone wrong and why the national airline was not saved in the end, but that is future music.
In the here and now, ex-Malev employees are trying to pull things together to create a new airline for themselves and the country. Talking to some of them, one gets the feeling that they are actually serious about it and, even more important, they want to keep politics out of it. Government support is welcome, but no meddling. This is certainly a good basis to start from.
For some reason, low-cost airlines seem to have a very bad reputation in Hungary. I guess this is in part due to the fact that Malev remained a full-service company to the very end, an airline where you were pampered, fed and looked after in the best traditional style and the contrast with the bare-bones service offered by the low-cost airlines was simply too big. This poor image could not be dispelled even by the low prices and many of the brave souls who tried one or the other of the low-cost companies were upset by things we in the West did not even bat an eye about for ages now, like having to pay extra when paying with a credit card.

For this reason, the new “national” airline they are thinking about cannot be a low-cost company… at least that is the thinking right now.
So, is this initiative viable? Not many details are available although the name Bluenose Airways seems to be popping up more and more and, apart from the fact that this is the name of an old Canadian fishing/racing schooner of some fame, it certainly is a catchy title and it is also a fitting memento to the blue nose cones Malev aircraft used to sport.
The most famous, employee owned airline is of course United which had been saved from bankruptcy when its employees bought 55 % of the company in 1994… Mind you, the current situation in Hungary and the United situation in the US back in 1994 bears little resemblance to each other but there is one important message that is as true to-day as it was back then: if dedicated people get together and are willing to go the extra mile and accept hardships, anything is possible.
This is a good omen for Bluenose… I think there is no shortage of dedicated people in Hungary.

What I am a little concerned about is the overly strong accent being put on the term “national” as in national airline and the aversion to the low-cost formula. That they want the airline headquartered in Budapest and paying taxes in Hungary sounds reasonable of course but these elements also hide a few pitfalls that will bear watching.
I think the leaders of this enthusiastic crowd need, first and foremost, wipe off their tears and help the others also to wipe off theirs. It is not easy to discern the future with tears in your eyes. The next step should be to think about a business plan based on a very realistic market analysis. Not on what the Hungarians are hoping to achieve in terms of traffic to and from Budapest but what is actually likely to happen. They should think long and hard about the reasons why a new Spanish low-cost company will start flying from Venice, Italy… They have selected destinations which are not being served by direct flights or which are only served by legacy airlines at legacy prices…
Obviously, the Spanish have gone where the market is, are going to implement a business formula which they believe will work… and which was good enough to convince their investors that it will indeed work. Of course we do not know whether the new Spanish airline will be a success or not. But there is a lesson here: go to where the market is and create a product the market wants.
The Bluenose dreamers may also want to think about Virgin Atlantic, which became big through offering what was basically a low-cost product but with an on-board service that was next-to-none but when it came to entering the short-haul market, they went to the US and set up Virgin America and to Australia to set up Virgin Blue,,, Go to where the market is. But we may mention Lufthansa Italia also…
Another thing to consider is the fact that basically all the legacy carriers are losing money on their European short-haul network. Profit, if any, is generated by the long-haul services. This hard fact of life actually determines the kind of airline one can reasonably expect to create. No bank will ever finance an airline running short-haul only… except if it is a low-cost. The minimum is a partner with a strong long-haul network. The message: much as you would like to be independent, you cannot exist alone…
Looking around the world, it looks like there are not that many new airlines being planned… In fact, Bluenose may be in a club all its own for the time being. Of course starting an airline from scratch offers certain advantages. For one, you do not have to implement cost cutting… you can start by keeping costs low. Efficiency is the name of the game but it means that the size of the family will have to be limited. There are ways and means for keeping the number of people you use per available seat-mile low and I mean LOW! Lower than your next best competitor or don’t even start.
Finally accept that you are not unique. Nothing Hungary or Budapest can offer is such that something equally enticing cannot be found in a hundred other places. There are excellent airlines with excellent service that will take people to all the nicest places on the planet… and they do.
Creating just another airline, however good, will not cut it. Before you spend the money, think and think and think… come up with ideas that will differentiate Bluenose from everyone else.
You got it? Start buying the planes.

If you feel like helping set up Bluenose Airways, register here. It is free and your expertise or just moral support counts!