La Compagnie is the all business class transatlantic airline which started flying in mid-2014. Their first route was between Paris and Newark, and I was able to review that flight within days of when they launched operations. Last summer La Compagnie launched flights between Newark and London as well.
La Compagnie 757 cabin
There’s no denying that La Compagnie offers exceptional value, as their business class is in many cases priced only marginally more than what other airlines charge for economy. I figured that was just a promotional offer for when they launched, but they’ve stuck true to their worth in that regard, which I commend them for.
At the same time the airline’s business class product is definitely sub-par. Seats are angled, while the industry standard nowadays is for business class seats to be fully flat (at least to London and Paris). But for the price, you really can’t complain.
For example, right now La Compagnie is offering $1,600-1,700 roundtrip fares to London and Paris, though just a couple of months ago they had fares of just $1,100 per person.
I’ve been following La Compagnie closely, especially given what an amusing mess the airline was when they first ramped up operations. Shortly after they launched I had the chance to speak with the airline’s Deputy CEO about their business plan, which was fascinating.
Anyway, an article has just been published about La Compagnie with ArtInfo, which is worth a read. It talks about how La Compagnie is doing at the moment, and also what they’re hoping for in the future. I figured I’d highlight some of the parts I find most interesting.
Who are La Compagnie’s customers?
55% of La Compagnie’s customers are coming from the US, while the rest are from the UK and France, so that’s quite an equal split. On top of that, 60% of La Compagnie’s passengers are traveling on business, which is actually higher than I expected (they’re hoping that number grows, though).
La Compagnie is making changes to planes
La Compagnie is planning a retrofit for July 2016, with “a new satellite connection, redesigned Samsung tablets, and repainted planes.” La Compagnie actually promised to have Wi-Fi early on when they started service, though as of now that still hasn’t happened. Given that they have only two planes, I’m curious how they’ll handle that.
Will they lease another old plane from Emirates, or will they once again do a milk run to accommodate all passengers?
Regardless, it’s unfortunate to see that La Compagnie is not installing a new fully flat business class product. If they’re going to succeed, I think that could be the key. Their planes aren’t totally full anyway, so they could install a new product without impacting their passenger count, but presumably could achieve much higher yields.
La Compagnie 757
La Compagnie wants to expand
In terms of long term plans, La Compagnie wants to start flying to California, and eventually Asia, though the latter will be in the “second stage of development.”
I could in theory see the value in service to Los Angeles and San Francisco, as there’s a lack of nonstop flights to Paris, and also fares tend to be really high (given that those markets are dominated by a couple of airlines). At the same time flying those routes would require La Compagnie to get a larger plane with more seats, which would be even tougher with the airline’s business model.
As far as Asia goes, that seems highly unlikely to me.
La Compagnie business class seats
Is La Compagnie profitable?
This is the concerning part. Just about every US carrier is making money at the moment, and in record numbers. That’s because oil prices are as low as they’ve been in a long time. Yet La Compagnie is only breaking even on their New York to Paris route, on which they’re achieving 70-90% load factors:
Our Paris route is break even, and the London route is still ramping up. We just launched London last year in May, 2015. [Fact check: La Compagnie is not yet generating profits.]
Not a single independent all business class transatlantic airline has ever succeeded, and there’s a reason for that. If La Compagnie is breaking even on a route where they’re achieving a 70-90% load factor (which is really impressive for business class), how do they ever hope to turn a profit? They don’t have much pricing power, given that their business class product isn’t competitive without fully flat seats, so I doubt they can improve yields much.
La Compagnie flights are 70-90% full precisely because they’re often only priced marginally more than economy on other airlines.
It’s also interesting to note that La Compagnie is apparently working on purchasing a new Boeing aircraft for next year:
We are already working on purchasing a new Boeing, which we’ll acquire in 2017. It will be a new addition to our fleet.
I’m curious to see what they’re looking at here. My guess is that when they say “new Boeing” they mean a Boeing aircraft which is new to the airline, as opposed to a new plane directly from Boeing. A non-ancient 767 could be a good fit for West Coast flights, in theory. Or perhaps they’re taking over Baltia Air Lines’ 747-200, which I’m sure is available for a reasonable price. 😉
La Compagnie lunch from Paris to Newark
Bottom line
While I was tough on La Compagnie at first, I’m really happy they’re around nowadays. They add something truly unique to the transatlantic market, as their product is often priced comparably to economy on other airlines. Being able to book ~$1,100 tickets between the US and Europe in business class (even if it’s a sub-par product) is incredible. What’s not to love?
But there’s a reason no transatlantic all business class airline has ever succeeded. If they’re not turning a profit on a route where they’re achieving a 70-90% load factor with record low oil prices, it makes you wonder what they’re projecting in order to make their business model work.
Regardless, it’s cool to get an update from La Compagnie almost two years after they started flying.
What do you make of La Compagnie’s expansion plans and (lack of) profitability?
For those calling this "ultra premium economy" and/or sub par business can I just point out that both emirates AND etihad still use angled lie flat business class seats for the ~11 hour flight from Dubai/Abu Dhabi to Perth, Australia.
This is just the one example I have to draw on personally as I fly from London - Perth yearly but I am sure there are many others.
I am not suggesting La...
For those calling this "ultra premium economy" and/or sub par business can I just point out that both emirates AND etihad still use angled lie flat business class seats for the ~11 hour flight from Dubai/Abu Dhabi to Perth, Australia.
This is just the one example I have to draw on personally as I fly from London - Perth yearly but I am sure there are many others.
I am not suggesting La Compagnie meets the standard of emirates or etihad business class but I just flew it myself and it more than qualifies as BUSINESS CLASS. The seat allows anyone who isn't unusually tall to fully stretch out and the service was lovely. Additionally I have no doubt it is a superior product to many of the business products still out there for a much larger price (ie El Al)
Whilst I appreciate they are trying to market to people travelling on business, in my opinion, where the value lies is wannabe luxury travellers such as myself.
This airline is AMAZING for those holiday goers who want a little luxury but can't usually afford it. Instead of booking flights to return home at the last minute, leave the night before (ie Friday night not Saturday night when returning to work Monday) and if the worse happens you get an extra day of holiday free!
Business class fares from NYC area have skyrocketed...for example I can't get a seat on any airline direct to CDG or ZRH. So my choices are multi-connection itineraries for $7000 to $9000 or direct to CDG on La Compagnie for $1800 and the TGV premier class back and forth to Zurich for $300. Pretty compelling saving for my client.
Hi. I love your texts and insights. Any time to recommend me what to do if I want to fly me and my family (wife, 11yr and 9yr) from Mexico City to Tokyo between December 18th and January 6th 2017 for holidays as the biggest surprise ever? I need to use my miles and have 260k on Aeromexico (skyteam) 230k on united (star alliance) and another 230k on my travelpass credit card. Not sure if I have some hope :-) anyway. That's for your insight and time.
Are there any other airlines taking advantage of England's Seventh Freedom agreement? If not, the EWR to LTN flight would almost be worth taking just to say you've done it.
"Seats are angled, while the industry standard nowadays is for business class seats to be fully flat (at least to London and Paris). But for the price, you really can’t complain."
Have I missed something or have AF magically transformed all of their wide-body fleet to fully flat? 2/3 of the B777 fleet should be done next year, but the A380 will not even start to update the J cabin until 2018.
So out of...
"Seats are angled, while the industry standard nowadays is for business class seats to be fully flat (at least to London and Paris). But for the price, you really can’t complain."
Have I missed something or have AF magically transformed all of their wide-body fleet to fully flat? 2/3 of the B777 fleet should be done next year, but the A380 will not even start to update the J cabin until 2018.
So out of Paris they are competitive, not so much out on LON.
Fully flat J and a normal Y+ product would probably be the way to go if they are getting bigger aircraft, and yes I would probably be the B767 since it shears a type rating with the B757 making it possible to have one pilot pool.
@SNIC
Hence why he used the term "ultra premium economy" referring to the fact that it's way beyond premium economy but in fact not a business class product at all.
They are going to buy a few 757 s from Delta. LOL
I would love to see a partnership with Alaska. Alaska's current European partners offer garbage availability to Europe from the west coast -not to mention BA's fees. Yes you could stop in Reykjavik, but the FI product is on par with B0.
@Peter Y - thats simply not possible. The company isnt based in the US, which means it cant sell domestic tickets. It will be able to sell OAK-CDG and EWR-CDG, but it cant sell OAK-EWR for the same reason QF cant sell the QF17 tag on from LAX to JFK, or why SQ cant add passengers in JNB for its SIN-JNB-CPT route.
http://milesfromblighty.boardingarea.com/2015/05/19/la-compagnie-in-the-air/
It looks they actually have two different seats on their two planes. One is as shown in the pictures here, the other one is the old Lufthansa seat with some slight changes (Branding, IFE replaced with tablet holder). Over all, I guess the old LH seat is still better than the one shown here.
$1,600 RT is quite a good fare for business class but where they really make their money is the checked bag fees. Just like Southwest you get 2 free checked bags but any additional bag is $300 from the US to Europe and 200 Euros from Europe to the US
Any idea if they allow you to book one way fares cheaply? As in half the price of a return? Could be decent to get a redemption on a major airline one way then book them on the way back.
They will likely get an identical 767, the seats are amazing for the price, and West Coast will likely have an NYC stopover eg OAK-EWR-CDG with the transcon priced competitively with JetBlue Mint.
LuckyOz - An angled lie-flat seat is NOT "ultra premium economy". It was state-of-the-art business class just a few years ago, and it is nothing at all like the most premium of premium economy seats (which are nowhere near as comfortable as angled lie-flat business class seats because they don't recline very much, even if it's more than regular economy).
If they can get some partnerships going to create a feeder network, the concept appears sound. You are getting too caught up in their marketing, of calling it business class. They are selling ultra premium economy, for cheaper than any competitors.
I am in Chicago, if they were here, I would be using them to fly to London and Paris for any non award personal travel. Business is a bit out of my price-range, and this looks so much better than economy.
You should fly them again later this year and do a comparison on how/if they've changed since 2014.
Ben,
Do you know how the BA flight from JFK to London City does as far as making or losing money? I assume it loses, but the fact that BA owns it tips the scales.
Sam
I suspect the lack of a feeder route network (and frequent flyer program, airline partners, etc.) limits La Compagnie more than the seats do. Definitely a bummer to hear they're only breaking even, which brings into question their ability to ride out industry (and oil price) cycles. All one can do is drink a toast to the additional competition that they provide, and encourage people to ride that pony as far as they can.
I agree Ben. Surely there would be room for them to raise prices if they had a competitive hard product, especially if they're not filling the planes as it is. I don't think they need connections if they take advantage of OpenSkies and just sit on the most important point-to-point routes.
Breakeven two years is a surprisingly good result with no connections, alliance, or GDS.
And consider the weakness in Europe and tragedies there, and, well, they are in much better shape than any of us thought.
Will they last two more years? Who knows. Just enjoy the fares.