Navdip Singh Judge wants to pull off something that Michael O'Leary, founder of Ryanair, the largest European budget airline, has never done. It is something that America's Southwest Airlines, the world's largest low-cost carrier, hasn't done either.
Judge, or Nino as he is commonly known, wants to start a low-cost airline that will fly to long haul destinations. To be precise, Flypop will connect the Indian diaspora in the UK to their hometowns in India, starting with flights from Stansted airport in London, to Amritsar and Ahmedabad.
In November, in an interview with World Travel Market, O'Leary as much as debunked the whole idea. He remarked: "I don't think long-haul, low-cost works."
Consider this. Ryanair's longest flight is the five-and-a-half flight from Warsaw in Poland, to Tenerife in Spain. Southwest's is about 15 minutes longer, from Sacramento to Honolulu. On the other hand, Flypop's flying time to Amritsar will be over seven hours, and an hour longer to reach Ahmedabad.
It's not that others haven't tried it yet. Remember WOW Airlines, the ultra-low cost airline from Iceland that even started operations to India? It folded up in 2019. And so did Danish airline Primera Air, which industry observers say, closed operations after starting long haul operations.
But Judge is unperturbed.
"We will be ready by Baisakhi, next year," Judge told Moneycontrol on a recent Zoom call from London. While the popular Sikh festival will be celebrated on April 14, Flypop may finally take to the air when markets are more ready, points out the entrepreneur. In other words, when there are enough vaccines available and travel is deemed safe enough for large numbers of fliers to take to the skies again. After all, Flypop will need to fill wide body aircraft that can fly up to 400 passengers.
What's the secret sauce in Judge's plan that gives him confidence? Not just that. The British entrepreneur of Indian origin even convinced the UK government to lend him Pounds 5 million, from its Future Fund, which helps companies, especially start-ups, that have been hit by the pandemic. Companies have to match the government's aid with an equivalent investment from private investors.
Pounds five million is the maximum that the Fund lends to a company.
"Just one percent of the companies who apply for the aid, manage to get the maximum amount," Judge said.
Given that the purpose was to fund 'promising' companies, how did a yet-to-start airline come under that bracket, at a time when many carriers have filed for bankruptcy because of the COVID-19 impact?
Banking on the diaspora
The UK is home to 1.5 people of Indian origin. London, where British Indians make up for 6 percent of the population, is the most popular entry point to the country. The British capital takes up the majority of the 156 departures and 26,000 seats that the two countries have every week, according to their air bilateral.
Judge is banking on this community to fill the wide body aircraft that Flypop will fly to Amritsar and Ahmedabad, which are arguably the two biggest destinations for NRIs from London.
Interestingly, it was Judge's father's experience in flying to India that first planted the idea in his head. "He would always fly to Delhi and then to Amritsar. But air, road or rail experience from Delhi wasn't great for him," recounts Judge.
His father, who passed away earlier this year because of COVID-19, was a teacher who lived in different parts of the world, including in Tanzania - where Judge was born, and Zambia, before moving to London in 1978.
The idea took form when Judge worked alongside AirAsia Berhad founder Tony Fernandes. Judge, who is passionate about motorsports, worked in Lotus Formula One that is owned by the Malaysian entrepreneur.
"I have often flown by his AirAsia X, from London to Kuala Lumpur. So why not a product for the South Asian diaspora!"
Interestingly, AirAsia X, the long-haul budget arm of the Malaysian airline, is currently going through a debt restructuring that will be critical for its survival.
Judge is banking on this South Asian diaspora to fill Flypop's wide body aircraft. After the Indian, the entrepreneur wants to target the diaspora from Pakistan, Bangladesh, Nepal and Sri Lanka.
"I would like Flypop to cater to all the diaspora in London and that also includes those from Africa and the Caribbean islands," he says.
Flypop will bank on the Indian diaspora in the UK to fill its aircraft
The business
Flypop doesn't have an aircraft yet. Judge says he was close to signing a deal to wet-lease an Airbus A330. That was nearly four years ago, when Judge first started working on his airline start-up.
"It is tough to raise money in the UK, unlike in the US," he says. It did not help that some of the popular names in the aviation world, and these included Monarch Air and Primera Air, shut shop.
Now he is in talks with multiple leasing companies.
"COVID-19 has presented an opportunity of a lifetime. Not just lease rentals, but everything, including fuel, is cheaper," Judge said, and added that rentals are down by half.
"Once I lock-in the deals now, I will have an enviable cost-structure, which I will be able to pass on to the customers," he says.
Flypop will charge customers a basic, un-bundled fare, which will allow them to carry one piece of luggage. They will need to buy everything else.
The price has to be low enough for Judge to fill the wide body aircraft (Judge is now eyeing Boeing B787-9 or Airbus A350 or A330neo), which will be able to fly up to 400 passengers. To further bring in the margins and cover the higher costs associated with a wide-body aircraft, versus a narrow body, Judge will have to ensure that the aircraft also gets a full cargo of 8 tons, in each flight.
Flypop will be a small team, with much of the operations - like the aircraft on wet-lease - to be outsourced. "We will focus on sales, marketing and management," says Judge.
"It's a risk few will be ready to take in present circumstances," says an India-based senior executive of an international airline. "History is against him. But then, no one expected Jet Airways to fly again, and it is close to doing so," he adds.
Judge's business model banking on the diaspora has convinced the UK government. It helped, as the businessman says, to have many senior ministers, including UK Chancellor of the Exchequer Rishi Sunak, from the Indian diaspora. Now he has to convince this large community in the UK to opt for Flypop over other carries, to fly home.
