Luxair moving to turboprops in wholesale restructuring exercise

 - December 8, 2006, 6:10 AM

Luxair, Luxembourg’s one-third government-owned private carrier, is rationalizing its regional-airline fleet and route system to improve productivity and profitability. “We’re restructuring everything, including the network,” Luxair executive vice president Martin Isler told AIN.

Luxair aims to provide the best daily schedules from Luxembourg to major European economic centers and transfer airports through the rejuvenation of its fleet, competitive pricing under a transparent fare structure and enhanced customer service featuring e-booking and self check-in.

A key element of the plan, which was initiated in the middle of last year, is the replacement of some Embraer regional jet capacity with more economical turboprop equipment. Two of the airline’s eight 49-passenger ERJ 145s will leave the fleet by the middle of next year, followed by both smaller ERJ 135s next October. Embraer equipment replaced Fokker 50s in 2004.

Luxair also will this month dispose of one of a pair of Boeing 737-500s flown in  scheduled service. The remaining 737-500 will join three 737-700s now used to fly charter services.

Plans call for three 72-seat Bombardier de Havilland Canada Q400s to arrive in April, May and October next year. Luxair has taken options on three more of the type. Before selecting the turboprop, the airline also considered the Embraer E170 regional jet and ATR 72 twin turboprop.

Luxair says the Q400 consumes “on average 25 percent less fuel than the jets,” a selling point to an airline that since between 2003 and 2005 has seen its fuel expenditures increase from 9 percent to almost 16 percent of total operating costs. The turboprops reduce CO2 emissions by almost 75 percent, according to the airline.
Luxair expects to operate Q400s mainly on Frankfurt, Paris, London and Munich flights. Services to London City Airport, currently flown with the ERJ 135s, have been “doing very well.” Isler said the Q400s would fly for “the same cost” as the small RJs, “so any uplift will immediately boost the bottom line.”

Confirming that Luxair would drop two unidentified routes next year, Isler cited “limited demand” for originating traffic in the small country. The move will see Luxair lose about 16 percent of its some 500 dedicated airline staff, although Isler pointed out that the company employs almost 3,000 more people in charter, cargo and ground-handling operations.