Blue1 Expands Its European Presence

Star Alliance member Blue1 recently announced new services to Amsterdam and increased services to Paris Charles de Gaulle. The Hub analyses the Blue1 network strategy.

From January 31st, 2011, Blue1 will begin a new 12 times weekly service from Helsinki to Amsterdam competing with Finnair and KLM. The same date will see the carrier double its existing six-times weekly service where it competes with Finnair and easyJet.

BLUE1 EXISTING MARKET SHARE

According to IATA BSP data, from June 2009 until June 2010, Blue1 carried 887,717 passengers equating to a 9% share of the total market. The table below illustrates scheduled passenger share by carrier from Finland to all destinations.

Carrier

Passengers (Two-Way June 2009-10)

Market Share

Finnair

3,997,636

39%

SAS

936,169

9%

Finncomm

897,858

9%

Blue1

887,717

9%

Lufthansa

492,397

5%

Others

3,043,123

29%

Total

10,254,900

100%

Source IATA BSP Data June 2009-2010

Blue1 has its main base located in Helsinki from where it operates five scheduled domestic routes and ten international destinations. For the week of November 14-20th, its international destinations consist of Stockholm, Brussels, Paris CDG, Copenhagen, Gothenburg, London Heathrow, Munich, Oslo, Berlin Tegel and Zurich which are all operated with B717 and RJ-85 aircraft. Its B717 aircraft are leased from parent company SAS, as it seeks to phase out its MD-90 equipment.

Blue1 is 100% owned by SAS and gives the Scandinavian operator a significant presence in Finland, which is dominated by oneworld member Finnair.  Not surprisingly its three largest international markets from Helsinki are Stockholm Arlanda which it serves from five markets in Finland (Oulu, Turku, Tampere and Vaasa, as well as Helsinki), Copenhagen and Oslo which are only served from Helsinki.  Blue1 allows SAS the ability to feed passengers from Finland into its Scandinavian network, as Finland is the only market in Scandinavia where SAS is not the leading carrier in terms of scheduled seat capacity.

SAS Norway, which was formerly known as SAS Braathens, has a 55% of all scheduled seat capacity in Norway. In Denmark, SAS Denmark has a 45% share, and in Sweden, the Star Alliance member has a 40% share of all scheduled seat capacity.

Blue1 plays an important role for SAS giving it increased presence in Finland and feeding passengers into its hubs in Stockholm, Oslo and Copenhagen.

COMPETITION

Blue1 faces strong competition from its Helsinki base. Of the 15 routes that it serves from Helsinki, it faces competition on every route from the two other major Finland based competitors Finnair and Finncomm.

DESTINATION

BLUE 1 WEEKLY SERVICE AND COMPETITION

Oulu (Domestic)

Blue1  51x weekly; Finnair 57x weekly

 

Stockholm Arlanda

Blue1 38x weekly;Finnair 51x weekly

Kuopio (Domestic)

Blue1 22x weekly; Finnair 27x weekly, Finncomm 17x weekly

Vaasa

Blue1 22x weekly; Finnair 18x weekly; Finncomm 24x weekly

Copenhagen

Blue1 27x weekly; Finnair 25x weekly

Paris Charles de Gaulle

Blue 1 6x weekly; Finnair 35x weekly

London Heathrow

Blue1 13x weekly; Finnair 28x weekly

Oslo

Blue1 16x weekly; Finnair 23x weekly

Gothenburg

Blue1 11x weekly;Finnair 25x weekly

Brussels

Blue1 11x weekly; Finnair 25x weekly

Rovaniemi (domestic)

Blue1 3x weekly; Finnair 26x weekly

Zurich

Blue1 12x weekly; Finnair 13x weekly

Berlin Tegel

Blue1 7x weekly; Finnair 12x weekly

Munich

Blue1 7x weekly; Finnair 12x weekly

Kittila (domestic)

Blue1 8x weekly; FInnair 7x weekly

Source Flightbase 14-20 November 2010

Finncomm offers just one scheduled service internationally, and competes with Blue1 on two domestic routes, whilst Blue1 finds itself competing with Finnair on every scheduled route that it operates from Helsinki.

With a new service commencing to Amsterdam Blue1 will again see itself competing with Finnair. The introduction of the B717 will simplify its fleet structure and help lower its operating cost. This could be even more important as leading low-cost operator Norwegian which has bases in Oslo, Copenhagen and Stockholm has been rumoured to be eyeing a new base in Helsinki.

WHERE NEXT FOR BLUE1?

In terms of expansion for Blue1, the three largest unserved markets according to IATA BSP data from Helsinki are Lyon, where 42% of the existing market flies with Lufthansa via Munich. Sofia where 31% of the existing market travels via Prague with SkyTeam member CSA Czech Airlines, and Marseilles, where Lufthansa currently has the majority of indirect passengers.

A more logical step for Blue1, given its existing network would be to add capacity on existing trunk routes. So markets such as Frankfurt which saw over 135,000 O+D passengers fly between June 2009 and 2010 with Lufthansa and Finnair both on the route,  or the Latvian capital of Riga operated by Finnair and Air Baltic, with over 116,000 O+D passengers in the same time period, could be a good opportunity for Blue1.

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