La Compagnie is an all-business class airline that made its name flying nonstop between the US and France. Catering to more budget-conscious passengers who want to fly in a lie-flat, the early days of the crisis revealed that it would be no walk in the park for the airline. Simple Flying spoke with Christian Vernet, President of La Compagnie, about how the airline made it through the crisis.
The early days
La Compagnie essentially shut down flying from mid-March. Save for a few flights in between, the airline faced travel restrictions imposed by then-President Donald Trump and later by French leaders, which all but ended any hope for leisure travel between the two countries for the foreseeable future. Mr. Vernet described the airline’s thinking as this:
“Now, if you remember at this time, President Trump announced that the ban would only last for three weeks, which would be the time for the pandemic to come down. As far as the expectation we had, it was fine. We thought that we would be able to start flying to New York as usual, starting in late-May.”
That changed from March 17th. President Macron of France announced a lockdown of France, which was a challenge for the airline. It then had to take some survival measures:
“First of all, we stopped flying, at this point. We [sent] most of the company employees back home – we had no other choice. For a couple of them, just to run the airline and to manage the administration until we were able to restart something, they would have worked at the office or from home. That has significantly changed the environment of the airline, for sure. Basically, for a period of time, we were no longer an airline, and the employees were far away at home waiting for something to happen.”
Sending employees home is no easy task. But it represents the sheer magnitude of the crisis and just how severe the crisis was for the airline. The early days were all about the carrier looking to survive for as long as it could.
Turning to financial survival
For any airline, having enough cash to be able to survive is crucial. La Compagnie could tell there would be an issue with cash when bookings started to come down from mid-February. After shutting down, it was time to deal with the unprecedented impact on the financial state of the airline. The airline benefited from some aid from European governments looking to shore up the tourism industry.
Then, the airline also started to discuss with its lessors to make it easier to stomach the crisis. Finally, the airline also turned to banks:
“We were forced to engage in discussions with the banks to take out some loans…These loans, what we call the government-backed loans, were made available to airlines…We did receive a first financing in early June, 2020.”
That June financing, however, came with the expectation that the airline would be able to resume flying by the fall. That, however, did not materialize, so the airline had to draw up other plans. Another round of bank-backed financing came in May 2021, which has helped enable the airline to start flying again this summer.
The vaccination and the reopening
It cannot be overstated just how important the vaccination drive and reopening of borders have been for La Compagnie. The airline noted that the vaccination program in the US and in Europe was a kind of bright spot – a light at the end of the tunnel. With vaccinations picking up, La Compagnie became confident that it could see the resumption of its all-business class flying in 2021.
Come May, the airline received the good news and got ready to fly again. When asked about what the removal of restrictions meant for La Compagnie, Mr. Vernet discussed the following:
“That changed the world for us. That meant our American customer base could once again be allowed to come to France, and then we could serve that market. So very rapidly, in May, we decided that we would restart flying to New York and to Paris starting June 12th, which we did.”
A slower ramp-up
La Compagnie started slow and steady, with two weekly flights between Newark and Paris, which is its bread and butter market. This was a far cry from where the airline was in the past:
“If you go back to 2019, at the time, we were basically working at full place. We would have two flights a day from Paris to New York, and the airline was something like 23% of the business market between Paris and New York.”
One of the bigger issues still hurting the airline’s return to full operations is the lingering travel ban for Europeans entering the United States. According to Mr. Vernet, the airline is seeing some strong loads – almost full flights – on the way to France. On the way back, however, the airline is hampered by the restrictions, that limit its ability to fly Europeans to the United States.
Nevertheless, the airline is more than thankful to at least be able to fly again. The airline is bringing back its flights slowly and is even adding new destinations to its network. The last year was a difficult one for La Compagnie, but the tides are starting to turn and the airline is planning on coming back strong.
Are you going to fly La Compagnie this year? Let us know in the comments!