Flybe swaps Gatwick for Southend & London City. Higher charges will necessitate improved yields

After withdrawing from London Gatwick Flybe has recently announced its re-entry into the London market. It is to launch seven routes from London Southend, to be operated by franchisee Stobart Air (formerly Air Arann) using ATR equipment. In an even more eye-catching move, it will also launch five new routes from London City Airport, operated by its own Q400 fleet.

Flybe's initial pricing of routes from both airports looks attractive, but each has relatively high airport charges. Although Stobart may offer lower costs at Southend than Flybe could achieve, it will need to ensure sufficient yields to offset the jump in charges.

This may be challenging. The Southend routes face little competition, but it is not a premium yield market. While London City attracts business travellers and good airline yields, Flybe's routes from there will face significant competition on a city pair basis (including LCC competitors). Flybe is still implementing an important cost reduction programme, but achieving good yields will be the key to success on its new London routes.