Cobalt’s come­back

Financial Mirror (Cyprus) - - FRONT PAGE -

Once the hype from the launch of the is­land’s new­est low-cost car­rier had died down, some of the teething prob­lems started to sur­face at Cobalt, forc­ing a man­age­ment change within a month and a need to re­design the air­line’s strat­egy.

New CEO An­drew Madar took over tasked with find­ing quick-fix so­lu­tions for the prob­lem cre­ated from the lack of a suf­fi­cient fleet.

But with nearly three decades’ of ex­pe­ri­ence be­hind him with the likes of Boe­ing and GE, Madar is con­fi­dent that by the end of Septem­ber, when the win­ter 2016/17 sched­ule will be an­nounced, will be back on its feet, hav­ing over­come de­lays and sales prob­lems.

He is even sure that with the right co­op­er­a­tion between the air­line, the air­ports op­er­a­tor and hote­liers, Cobalt could be at the fore­front of at­tract­ing tourists from far­away China, once its long-haul flights have been fi­nalised.

“We’ve al­ready sold 77,000 tick­ets so far and with the good im­pres­sion that pas­sen­gers fly­ing with us have had, we will be build­ing up our cus­tomer base,” Madar said in an in­ter­view.

Cobalt op­er­ates an Air­bus

fleet of A319s and A320s and the air­line aims to have six air­craft in op­er­a­tion by Spring 2017 in time for the next sum­mer sea­son.

The pre­vi­ous man­age­ment did not se­cure the ar­rival of air­craft in time, which was to see it grow from a sin­gle air­craft at launch to a fleet of five by the end of Au­gust. This was also why the share­hold­ers de­manded ac­count­abil­ity, as a re­sult of which launch CEO An­drew Pyne left.

The change in­cluded

trim­ming

the man­age­ment team by 10%, which did not af­fect the to­tal staff size. Al­ready, due to the grow­ing needs, the air­line’s 188 per­son­nel is ex­pected to grow to 210 by the end of the year.

“Ever since I took over, and as soon as my friends in the air­line in­dus­try heard I was in charge, we have re­ceived of­fers for up to a dozen ‘dry’ leases (air­craft only) di­rectly from the com­pa­nies, and not through bro­kers,” Madar said.

The ini­tial plan was to op­er­ate with four dry leases, boosted by ‘wet’ leases (in­clud­ing flight and cabin crew) dur­ing the peak sum­mer months. But this did not ma­te­ri­alise, caus­ing a few de­lays. At present, it op­er­ates one dry and two wet leases, with two new air­craft ex­pected by the end of Septem­ber.

“We will con­tinue with our ticket sales of very low prices, but from now on these will be de­ter­mined on a ‘hy­brid low cost’ ba­sis,” Madar said, adding that the route struc­ture to the UK, Ire­land, Greece and France will be boosted by launches to Beirut, Tel Aviv and Tehran.

Hav­ing helped de­velop new busi­ness for the man­u­fac­tur­ers in China, Madar be­lieves there are three pri­mary rea­sons why the Chi­nese would opt to travel to Cyprus for their hol­i­days – lo­ca­tion, cul­ture and se­cu­rity.

Once the For­eign Min­istry fi­nalises its visa-is­sue sys­tem in China with re­mote ap­pli­ca­tions, this should make Cyprus just as at­trac­tive as Greece, Egypt and Turkey.

“Now that the Chi­nese have their own pass­ports and are free to travel, a des­ti­na­tion like Cyprus, which is also a step­ping stone to Europe, is very at­trac­tive,” Madar said.

He is not too keen on the in­vest­ments­for-res­i­dency scheme, but is con­fi­dent that tourism will at­tract record num­bers of Chi­nese to the is­land. This is why Cobalt is also in com­mu­ni­ca­tion with the Cyprus Tourism Or­gan­i­sa­tion to co­or­di­nate this new ven­ture.

At the same time, Madar, whose back­ground is en­gi­neer­ing and man­age­ment, said that on the tech­ni­cal side, Cobalt is very solid, which is unique for a startup, where of­ten safety is com­pro­mised in or­der to achieve cost ef­fi­cien­cies.

“We have in­tro­duced a bet­ter model – it’s called lean ef­fi­ciency that meets safety reg­u­la­tions, can ac­com­mo­date pas­sen­ger de­mands and help re­duce de­lays,” he ex­plained.

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