Graham Howat explains how POP will be an ‘enhanced value’ airline.
Graham, how did you first become involved in POP?
Nino Judge, POP’s Chairman, happens to be a neighbour of mine and on a shared journey home from the funeral of a mutual friend of ours, he shared his dream of creating an airline that would not only link the UK with the developing world but would also be a charitable enterprise. When I got home, I put the dream down on paper – it’s important to me to write things down, reflect on what I’ve written and then hone it – and then I sent it to Nino who said, “you know, that exactly expresses what I want to do”. And so I went to work on it. That’s how it started.
Am I right in thinking you’re bringing a lot of aviation experience to the project?
I’m not an airline start-up guy, but I have worked for and around airlines for almost fifty years now. So I have a pretty good understanding of the environment and the vocabulary and, just as important, I know a lot of people who can help and have helped.
It began in 1963 when I started an apprenticeship with what is now British Aerospace in Yorkshire and, during that period, I spent two years at Cranfield University where I gained a Master’s degree in Air Transport Engineering. Then in 1968, I joined British European Airways, which became part of British Airways in 1970, and was primarily involved in management advisory services on the passenger and ramp handling side of the airline. After that, I joined Hong Kong Aircraft Engineering Company, known as HAECO and a sister company to Cathay Pacific Airways, and after six years of very varied engineering management exposure, I spent eight years in marketing, visiting airline customers all over the world from the USA to South America to China and all over the Pacific region. And finally, I became Managing Director. Since leaving Hong Kong, I’ve spent another 25 years in the aviation industry which adds up to over 50 years in total. So yes, you could say I have some experience.
POP talks about being an ‘enhanced value’ airline. What does that mean exactly?
‘Enhanced value’ is a term that I coined to encapsulate the service we’re aiming to offer and to differentiate us from other airlines, whether ‘low cost’ or ‘full service’.
The POP service will be internet-based, of course, and we’ll be offering highly competitive fares and operating the same modern equipment as the competition. But beyond that, we’ll be flying non- stop services to new destinations, yielding major reductions in overall journey times. Some inflight and ground services will be chargeable but we want our passengers – and competitors – to view our offer overall as very good value, safe, competent, clean and comfortable, and delivered with on-time, thoughtful and friendly customer service. And on top of all that, we will also be enhancing the lives of those in the communities POP serves through our charitable donations aimed at meeting the needs of the most vulnerable.
We anticipate that, in time, cities will compete to attract POP and that our approach to charitable giving will resonate with the target market and stimulate both demand and growth.
What does that mean in terms of on-board services?
Well, take food as an example. We’re taking a leaf out of Norwegian Air’s book. They’re a new long-haul low-cost carrier and passengers can either choose to buy food on-board or not. That will be our model. Passengers will be able to specify what they want to eat, or not, at the point of reservation. Unless, of course, you’re a Gold Pass holder in which case in-flight meals are one of the perks.
It’s a similar principle to choosing whether to buy an increased leg- room seat or a lounge pass. We want to give our customers options.
Why did you choose Ahmedabad and Amritsar as your first destinations?
We have some very detailed data and analysis and that is backed up by all the consultation we’ve done, including with some major international consultants, and by the feedback we’ve been getting from the Indian community, the people on the street. So we have no doubt whatever that the demand is there.
At the moment, passengers wanting to fly to these two secondary cities have to endure a long journey – around 17 hours or 18 hours. POP is going to halve that.
And why the choice of London Stansted?
Stansted is a very useful middle ground in many ways because the whole of East London is part of its catchment area and, in fact, it’s very accessible by train from the whole of the London conurbation. But it’s also got good road and rail links with the Midlands.
We have had discussions with potential service providers about the merits of using Birmingham and/or East Midlands airports and they remain in the mix. So, whilst we’ve decided to base ourselves at Stansted, there’s no reason why we couldn’t also operate from Birmingham and East Midlands by bussing crews to and from Stansted. We could also run buses from, say, Birmingham city centre with an on-board check-in system so when passengers get off at the other end, they already have their boarding passes in hand and their baggage has already been tagged. How efficient would that be compared to the whole business of dragging your bags into the terminal at any airport?
Does POP have plans to fly to other destinations?
Yes, that’s definitely part of the long-term model. For example, Bangladesh is a possibility. We have a big Bengali population
in the UK and Dhaka or Sylhet would make sense as possible destinations. And there are Caribbean and Canadian possibilities, the latter through the east coast of the States.
What are the main challenges for you now in actually launching POP?
The principal challenge is fundraising. The problem is that people don’t want to invest until other people have! “When you’ve got the money come and talk to me”. That’s the kind of thing we’ve been
hearing for the last three years. So, we’ve got to raise money from those who are prepared to take a chance on the quality of our plan and the quality of the people who are involved in it. It’s not easy. But we’re getting there.
I understand you’re planning to lease your aircraft. Is that right?
We certainly plan to begin our operations by leasing aircraft. For a start-up airline, leasing obviously saves you the capital expenditure and gives you the flexibility you need in terms of increasing or reducing capacity. And starting with a full wet lease option means you can make your own decisions about when to progressively move towards drier forms of lease and take ACMI down to the A, Aircraft, element only. There are financial benefits to doing that
– you’re not having to pay for the service provider’s profit – but to make that journey, you do need to build an ever more complex internal organisation.
What can you tell me about POP’s load factors?
Well, as the man who devised the model in the first place, I can tell you that we’ve based it on a 70% load factor off-peak, 80% shoulder and 90% peak. Given the way we have divided the year up for modelling purposes, that gives us an 80% average load factor across the year – which I don’t believe is overly optimistic.
Do you envisage POP joining a low-cost carrier alliance?
It’s early days but we do plan to work alongside other low-cost carriers which would mean that POP passengers could arrive in the UK and then travel on to other destinations in Europe, for example.
So the big final question. When can we expect POP’s first flight?
We’re aiming for the first flight to depart in 2017 from Stansted Airport using state-of-the-art Airbus A330-300 aircraft in POP livery!