La Compagnie Discontinues London To New York Flight, Cites Brexit

La Compagnie is the all business class transatlantic airline that 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.

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In March La Compagnie claimed they were breaking even on their Paris route, and were still “ramping up” on their London route (in other words, they weren’t yet breaking even).

Well, La Compagnie has just announced that they’re discontinuing their flight between Newark and London Luton as of September 25, 2016, and they’re blaming Brexit. Per the press release:

Effective Sunday, September 25, La Compagnie, the exclusively business-class boutique airline, is suspending its London-New York route. This decision comes in view of the new economic climate and aviation landscape in Europe following the recent United Kingdom European Union membership referendum in June 2016. In parallel, La Compagnie was aiming since months at developing and grow its original Paris-New York business, and so the second daily flight will begin as soon as October 2016.

“We would like to express our sincerest gratitude to our passengers, teams and partners, especially London Luton Airport, who have supported us since the launch of our London operations back in April 2015. This has not been an easy decision, but we would like to emphasize that this is the suspension of, not the cancellation of, the London–New York route,” said Frantz Yvelin, Founder and CEO.

This change has not been taken lightly by La Compagnie, known for delivering the best value in transatlantic business-class travel. The airline has received consistent positive feedback from its valued customers on the London route and encouraging performance levels with an average load factor above 77 percent since June 2016. The London option will be reassessed in the future.

They’re claiming it’s a suspension and not a cancelation, though I’m extremely skeptical about that. La Compagnie is also claiming that they will start a second daily flight between Paris and Newark as early as October. However, their fares are already low and it’s not like demand is going to double overnight, so I don’t see this working out especially well for them.

The airline says that passengers booked on this flight are entitled to a refund, or otherwise are entitled to rebook on the Paris to Newark flight. That’s not a reasonable accommodation. They’re canceling the flight three weeks in advance and are unwilling to rebook passengers on another airline for the originally scheduled route. At a minimum they should be responsible for providing transportation between London and Paris so passengers can take the La Compagnie flight out of there.

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A few weeks ago, La Compagnie also sold a year of unlimited flying for $35,000. I’m not sure if anyone ended up buying it, but if they did, they really should be entitled to a refund (or at a minimum, a big discount), given that they discontinued half their route network.

La-Compagnie

Bottom line

La Compagnie offers a fantastic value proposition for passengers, though from their perspective I never really saw how they were going to make this work long term. They finally managed to breakeven on their Paris route with high load factors, but those are under pretty good conditions, all things considered.

In the case of London, I suspect they realized that they were unlikely to ever turn a profit on the route, and figured Brexit was a good excuse to pull out.

While La Compagnie has offered a good value proposition when things go right, time and again they’ve left passengers hanging in the case of cancelations, and this is yet another example. If you’re booked between London and New York they’re required to provide you with transport between London and New York, and not just between Paris and New York. If anyone is booked on the route, I hope they push La Compagnie on this.

Was anyone scheduled to fly between London and New York on La Compagnie? Are you surprised to see the airline cut the route?

(Tip of the hat to Miles from Blighty)

Comments

  1. No sign of the UK leaving the EU yet (and it will take at least 2 years from the date we actually get a sign) and, apart from the fall in the pound, there has been next to no economic “fallout”….and yet La Compagnie is being affected by Brexit. Laughable.

    I’d have a bit more respect for the management if they just flat-out admitted they have a poor and unreliable product and a business model that will fail (it’s just a matter of time). I’d more than happily fly in a angle-flat seat across the Atlantic at the right price but I wouldn’t ever trust La Compagnie with my cash….there’s absolutely no guarantee I’d get to my destination anywhere near when I’d like to.

  2. More proof to my theory on the company selling those unlimited flight passes as a red flag in their operations

  3. I would say a 10% hit to Britons purchasing power is a pretty huge shock to a low margin business. They’re selling tickets in gbp but buying petrol in other currencies. BREXIT strikes again

  4. @Stvr hits the nail on the head. If you’re already struggling (as all indications show the EWR-LTN route was), even a small decrease in load, paired with a decrease in the marginal value of the currency received in payment, can change formerly difficult situation to an untenable one.

  5. Either Alex Hunter on Layovers or the guys on Dots Lines and Destinations (sorry I forget) nailed this awhile back on the podcast when La Compagnie starting selling the unlimited passes. They stated that this is a sign of financial weakness in an efffort to raise quick cash. Now they are using Brexit as an excuse to pull on of the main routes. It sadly seems that days are numbered for this effort. The timing is bad also as BA is doing away with the London-JFK all business routes. Likely because they don’t earn enough money, Not Brexit #scapegoat

  6. I was affected by this – glad I read this blog, as they sent no notifaction.

    They rebooked me on the Paris flight, and also put me on connecting flights to London on AF and BA (at no expense to me). They also said that those flights would have the baggage fees waived.

  7. Nothing to do with Brexit. Everything to do with a failed business plan.
    Any hit on the sterling exchange rate works in the other side’s favour – ex-USA traffic would grow. Over the past week UK business metrics have pointed upwards – FTSE100, FSTE250, Manufacturing and Service Sector confidence measurements, consumer spending all show as growing, and unemployment falling. This won’t last forever, but it is hasty to make any pull-out decisions based on the current facts in front of them. There is plenty of time left to assess the longer-term effects of Brexit.
    Let’s face it, the London-NY market has lots of competition – AA, BA, UA, DL, VS all with decent product, and loads of frequency to entice schedule-sensitive travellers (with options when things go wrong), and FFP’s. La Compagnie’s USP was low price … and Luton.
    It surprised me that La Compagnie think they could be a success when other transatlantic all-business airlines Eos, MaxJet, & SilverJet failed with the same business plan in the past few years.

    Brexit was just a convenient excuse.

  8. Originally scheduled for Luton… they re-booked us both ways EWR – GDG; also provided comp flights both ways LHR -CDG. The La Compagine person who did the re-booking was very courteous and spent some time answering our questions re various connecting flights.

  9. We are supposed to fly that route in 4 weeks…spoke today and not thrilled with layover in Paris to get to London…need there by a certain time…suggestions on how to push them on this?

  10. @Michael why would ex-USA traffic grow on a NYC-LON all-business flight after the UK economy just got hammered?

  11. Obviously an article like this will attract the anti brexit campaigners but isn’t the truth of it that 1) people don’t want to travel from Luton/don’t even take it into consideration when thinking ‘London’. People struggle to think of LGW as London when booking business travel and 2) if I’m travelling with work and not seeing my family then it’s all about the perks for us ie points/loyalty schemes when choosing an airline.

  12. @ Michael – “Luton”. Yep!

    A lot of the comments here seem to be outside the UK. Imagine that Paris flight from BVA rather than CDG. Luton is very convenient if you’re shaving off costs on the likes of Easyjet. For an all business flight?

    Much as Luton is badged as London, I certainly don’t think of it as such.

  13. ” if I’m travelling with work and not seeing my family then it’s all about the perks for us ie points/loyalty schemes when choosing an airline.”

    I can’t get business class travel reimbursed, but I can buy a business class ticket and be reimbursed for the cost of an economy ticket. That’s why La Compagnie makes sense. I’m annoyed by the Luton cancellation, but realistically, it won’t impact me much because the cdg flights are earlier, the connecting flights are to LHR, and I can take the Heathrow Express (no such thing from Luton). So I end up arriving at about the same time.

  14. Did they book people in business class for the cdg-lon leg? There are no flights from lon to cdg that arrive early enough to get the flight to ewr. Are they paying for the hotel too?
    So disappointed about this but it was inevitable having never seen a flight more than 50% full

  15. I have flown with them last and again this year. Both times into Luton and out of Paris. Great flights, on time and excellent service. But I always was nervous about only 2 aircraft in the fleet. I did overhear an attendant saying they were going to get a third plane, sounds like that won’t happen soon. Unless they get an infusion of capital my sense is that they will be going out of business in the future, I will miss them. Luton is about the same distance from central London as Gatwick. There’s a pretty good train service to St. Pancras (free shuttle to the train station) so I never considered it an inconvenience to fly in there.

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