Jersey European Airways (UK) Ltd. History

Address:

Exeter International Airport
Exeter, Devon EX5 2BD
United Kingdom

Telephone: 44-1392-366-669
Fax: 44-1392-366-6151

Private Company
Incorporated: 1979
Employees: 1,500
Sales: £236 million (2004 est.)
NAIC: 481111 Scheduled Passenger Air Transportation

Company Perspectives:

The new millennium has seen a period of evolution for the airline. Following a change of brand to British European, the next stage of the development came on 18th July 2002, with the launch of a new airline name, FlyBE. Along with the new image came a raft of fundamental changes to the business, with new deals for both the customer and the travel trade. FlyBE has blended the innovative style of the new breed of airlines yet retained the service values customers have a right to expect.

Key Dates:

1969:: Intra Airways is formed in Jersey.
1979:: Intra merges with Express Air Services to form Jersey European Airways (JEA).
1980:: Spacegrand is established as air-taxi service in Blackpool.
1985:: JEA joins Spacegrand; headquarters are relocated to Exeter.
1989:: Maintenance operations are moved to Exeter.
1991:: JEA enters London-Guernsey, London-Jersey markets.
1993:: BAe 146 jets are added to the fleet.
2000:: The company is renamed British European.
2002:: The business is rebranded as FlyBE.

Company History:

Jersey European Airways (UK) Ltd. is the third largest airline in the United Kingdom. The company, which began marketing itself under the name "FlyBE" in 2002, calls itself the largest independently owned regional airline in Europe. FlyBE flys about four million passengers a year to 17 domestic and 25 international destinations. About 80 percent of its bookings were made online. Due to its evolution as a regional carrier, FlyBE is unique in maintaining a headquarters and hub in relatively rural Exeter. However, this has helped the airline carve its own niche. As company Managing Director Jim French put it, "We are enabling the population living outside London and the southeast to enjoy the same benefits of low-fare travel as the city dwellers."

Jersey Origins

The growth of the Channel Islands as a tourist destination in the 1950s and 1960s led to the formation of a number of small airlines to compete with ferryboats. One of these, Intra Airways, was established in Jersey in 1969 to operate war surplus DC-3 aircraft.

Intra merged with Express Air Services (EAS) ten years later to form Jersey European Airways (JEA). EAS soon left the partnership, however. JEA replaced its DC-3s with a variety of smaller, newer island-hopping commuter aircraft.

Walker Aviation Group of Lancashire then acquired JEA in 1983. Walker also owned a small airline, Spacegrand, which flew routes from Northern England (Blackpool) to Ireland and the Isle of Man. Jack Walker, founder of Walkersteel, had established a base in Jersey for tax reasons. He had originally founded Spacegrand in 1980 as an air taxi for Walkersteel executives; in 1982 it had contracted with JEA's sister maintenance unit.

Exeter, a city of 100,000 people in rural southwest England, became the hub linking the two route networks and became the company's headquarters when JEA and Spacegrand were amalgamated in 1985. The next year, JEA expanded its capacity with three Shorts SD360 aircraft. JEA carried 160,000 passengers in 1985; its annual revenues were less than £9 million.

In 1989, the ten-year-old maintenance operation, JEA (Engineering) Ltd., was moved to Exeter, where it acquired Westcountry Aviation Services. The unit, JEA's sister company under Walker Aviation ownership, was then renamed Jersey European Technical Services. It had 180 workers in 1991 and grew to employ 450 people by 2001.

JEA, the airline, had 200 employees at the start of the 1990s. Passenger count rose 40 percent in 1990 to 460,000. The growing airline started the 1990s with a new corporate livery. JEA began flying to London in 1991 from Guernsey and Jersey.

David McCulloch was JEA managing director from the end of 1991 to May 1992. He was replaced for a time by Walker Aviation Managing Director Trefor Jones. Then in September 1992 JEA hired Barry Perrott, a British Airways alumnus, as chief executive.

Jets Acquired 1993

In 1993, JEA added three BAe 146 "Whisper Jets" to its fleet, which then consisted primarily of Fokker F-27 turboprops. A fourth BAe 146 was soon added to connect Belfast and Birmingham. Business Class service was introduced around this time. The Exeter hub was being supplemented by connections at London and Birmingham.

JEA posted pretax profits of £1.8 million on turnover of £51.7 million in fiscal 1995. The airline was again in expansion mode. The previous year, the airline had lost £3.7 million; it had returned one of its leased BAe 146s and trimmed 40 employees from its workforce.

In the mid-1990s, JEA leased a full-size airliner to fly to Amsterdam. JEA acquired its seventh BAe 146 in 1995. A code-share arrangement with Air Inter allowed JEA to offer London (Stansted) and Marseilles. In October 1996 the airline began operating routes from London to Lyons and Toulouse on behalf of Air France. A Birmingham-Paris route soon followed. However, a promising stock offering planned for November 1998 was canceled when the market for airline stocks collapsed. The airline had been expected to be valued at £100 million.

New Names in 2000, 2002

Five more BAe 146s were acquired in 1997. Another series of route extensions followed the April 1999 order for 11 Dash 8 turboprops and four Canadair Regional Jets (both aircraft produced by Canada's Bombardier). The order was worth £160 million ($250 million). The new capacity allowed the route network to expand to Dublin and Edinburgh.

JEA was the leading carrier at both London City and Belfast City, in spite of recent incursions into the Northern Ireland market from budget carriers easyJet and Ryanair. JEA's schedules were more oriented towards business travelers than those of these two upstarts.

In June 2000, a change of name to British European was effected to reflect the carrier's international work with Air France and the extension of the network into Scotland. (There was no relation to the former British European Airways Corporation.)

By 2001, BE was flying to several major cities in the British Isles and France; Air France contracted for Glasgow-Paris service. BE, which had 1,200 employees, operated 1,100 flights per week, including some charters. Revenues were £162 million in fiscal 2000; sister company British European Aviation Services took in £14 million. Walker Aviation's aircraft leasing business accounted for another £8 million.

The Regional Jets were dropped from the fleet in 2001, though the carrier continued to operate BAe 146 jets, which could take off from shorter runways. BE had planned to be the launch customer for the BAe 146's replacement, the RJX, but BAe canceled that program.

BE was able to pick up routes from Gill Airways and Sabena when they were grounded. A July 2001 marketing agreement with Delta Air Lines gave BE a share of its traffic beyond London. BE signed another codeshare agreement with Continental Airlines in September 2002.

BE then faced a number of serious challenges that resulted in £30 million in losses in just two years. The 9/11 terrorist attacks on the United States and Britain's mad cow crisis both conspired to cut traffic.

Barry Perrott, British European's CEO for the previous nine years, resigned in June 2001 to be replaced by Jim French. French had begun working for Jersey European in 1989 following positions with Air UK and others.

JEA was relaunched on July 18, 2002, as a budget, Internet-based, consumer-oriented airline under the brand name "FlyBE." Within a year the carrier would be able to announce that 80 percent of its bookings were being made online. FlyBe celebrated this achievement by offering special fares, as low as £12 between Belfast and Birmingham.

Turnover reached £213 million in fiscal 2003, though the company struggled to regain profitability. Revenues were expected to climb to £236 million in fiscal 2004.

A significant route expansion was announced in 2003, including the addition of hubs at Bristol and Southampton. One testament to FlyBE's influence was British Airways' abandonment of the Southampton-Jersey and Southampton-Belfast markets in the summer of 2003.

FlyBE was launching more services to France and one to Spain in March 2004. Up to 11 more European routes were in the works for 2005. The airline was discussing options for larger short-haul aircraft along the lines of the Boeing 737 or Airbus A319 used by other low-cost carriers. These were to replace the company's fleet of smaller BAe 146s.

After losing £28 million in two years of transition to a low-cost business model, FlyBE was beginning to post profits again. With FlyBE flying high and boosting market share, observers were anticipating a public stock offering for the airline by 2006.

Principal Competitors: Aer Lingus Group Plc; Aurigny Air Services Limited; British Airways Plc; easyJet Airline Co. Ltd.; Ryanair Holdings plc; ScotAirways.

Jersey European Airways (UK) Ltd. History

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