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Airline Franchise Agreement

Sun Air, as a BA franchisee, flies to the following destinations in Europe (August 2010): Loganair, which dates back to its origins until the 1960s, became a BA franchise in 1995. It gradually expanded and took over many routes to the Scottish Highlands and Islands, once operated by other BA partners. The basics are quite simple. The franchise partner will have access to ba-branding, service standards and, most importantly, its global marketing reach. In return, BA operates in small or inexpensive markets, where there would be little hope of stacking the economy with its own direct services. Two airlines were questioned by the Competition Authority about how their agreement benefits passengers. Under franchise agreements, airlines remained independent and managed, but operated flights in full lacquering from British Airways, but with slightly variable and often better service standards. After demonstrating strength with gains from the second year of operation, CityFlyer signed a five-year franchise agreement with BA in mid-1993. CityFlyer didn`t look back. Passenger growth has averaged 20-30% per year, although it is now starting to stabilize. In the last financial year, until the end of March 1997, the airline achieved a pre-tax return of more than £4 million ($6.7 million) for a turnover of more than £65 million and growth. Burgess says that, in the depths of a severe air recession and with tight crates, his ambition was to find a great airline partner instead of doing it alone. He adds that the prospect of BA welcoming the airline back after Air Europe seemed distant.

But a chance conversation with a BA official revealed that the British airline had no interest in misleading the Gatwick operator a second time. Richard Lake, Executive Director of Eastern Airways, added: „This alliance will benefit both airlines, not only because it strengthens Flybe`s network, but also expands our distribution and improves connection opportunities for our customers through their global airline association. At its peak, BA had more than 10 franchises around the world. In the late 1990s, nearly 6 million passengers carrying BA franchises flew each year with more than 100 aircraft to a similar number of destinations. There are now only two franchises left. Some franchises were purchased by BA. Some were acquired by others. And some have gone out of business. In fact, the elements of the formula are hardly new. The franchise concept is already being used around the world to sell everything from the hotel room to the hamburger. There are also no surprises in the prospect of a large carrier lending its branding to a regional subsidiary.

Major U.S. airlines have spent much of the past two decades since deregulation surrounding themselves with a network of regional codeshare and express operations partners that power their major platforms. European airlines have reacted more slowly, but the concept is starting to take hold. Loganair has always been one of the most interesting franchise partners because of the remote destinations it has served. It operates the world`s shortest commercial flight with only 90 seconds in length between The Westray and Papa Westray as part of the Orkney Inter-Island service. Flights to Barra also land on the beach! SCANDINAVIA A/S`s SUN-AIR is the second of BA`s latest franchises. The franchise partners are also not fully linked to the BA network. As a rule, only 10-20% of passengers switch to long-distance BA flights….