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BermudAir CEO: ‘the sky’s the limit’

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Adam Scott, BermudAir CEO (Photograph by Akil Simmons)

The genesis of BermudAir, which will become the island’s first airline when its inaugural flight takes off on Thursday, can be traced back decades to a Canadian visiting relatives in Britain and getting an early introduction to the hassles of modern air travel.

“I got fed up with the big airports and all the aggravation that goes with that,” said Adam Scott, the airline’s chief executive, reminiscing.

Years later, when studying in Britain, he discovered the wonders of London City Airport and learnt about the many benefits of smaller hubs.

More recently, the former Goldman Sachs banker tried to start a London-based all-business-class airline, a project that never quite got off the ground. It was during the Odyssey Airlines years that he made a connection with a Bermudian who helped him to become better acquainted with the country.

“And so, I look at this and say, ‘This is a very interesting market and has many similarities with London’ insofar as it has a high concentration of business traffic, it has a high concentration of high-end leisure traffic and it has a very robust resident and returning-resident concentration.”

“We spent some time looking at the numbers, understanding how the market works. Again, very interesting.”

BermudAir aircraft

The airline business is notoriously difficult, and ventures fail all the time. With high fixed costs, brutal competition, unpredictable oil prices and fickle travellers, even those with the best of backing can find cashflows falling short.

BermudAir has made a big commitment to the project. It has opted for leasing the aircraft, hiring its own crew and getting its own regulatory approvals, rather than going for a “wet lease”, in which another company does almost everything in exchange for a fee.

The CEO would not disclose the total investment, other than to say that the airline is well financed and that all the investment is from “private” sources, the implication being that the Government is not an investor.

Mr Scott said that Bermuda offers a unique opportunity, at least for the right aircraft going to the right cities.

“Bermuda has its peak tourism season over the summer months, but then business travel is in the off season. And Bermudians tend to travel around the holidays, so actually it is a very stable market for what we are trying to do here,” he noted.

Mr Scott and his team considered a number of aircraft. They were looking for the sweet spot in terms of the number of passengers carried, somewhere between 24 and 30. Even the smallest Boeings are too big, and larger business jets are too small.

They settled on reconfigured Embraer 175s — leasing two of them — with the number of seats taken down from 88 to 30. London’s Factory Design, the company enlisted years ago to develop the interiors for British Concorde supersonic jets, was hired to develop the all-business-class cabin for BermudAir.

What has been created has never been tried before, Mr Scott said. All-business-class offerings are not new, but BermudAir is the first high-end carrier flying short-haul routes.

“From my perspective, we have done the analysis. We spent a great deal of time talking to people on the island, understanding traffic flows, understanding what our investors are looking for, and it is our view that we are going after the right market on Day 1,” he added.

BermudAir will serve three destinations.

It is flying to Westchester County Airport and Boston, with the first flights on August 31, and later to Fort Lauderdale. Other destinations have been considered — including an airport near Washington and Trenton–Mercer Airport in New Jersey, and even Toronto or Chicago — but for now the airline is focused on just the initial three. It is also holding back on interline agreements or code-sharing.

The CEO is set on the 30-seat configuration, despite great interest for smaller aircraft flying from Bermuda to smaller airports in the US. Round-trip airfares will be about $2,000 after a short introductory period, when fares will be about a quarter of that, and three classes of service will be offered.

“It sounds expensive. But when you consider the value of time and the stress levels, it is all up to the individual,” he said.

He added: “Let’s start here. If we can get this right, the sky's the limit.

“We want to be Bermuda’s airline for Bermuda. To the extent an opportunity exists, a viable opportunity, one that does not require support from elsewhere, something that can stand on its own, I don’t think there’s a reason we won’t pursue it.

“We know this market, and we know we can do it. Let’s build on that and build a little industry here in Bermuda and support others.”

He said he would not rule out aircraft with more seats or the selective running of charters. As examples, he mentioned flying students to school in Halifax, Nova Scotia, or doing special runs to Walt Disney World Resort in Florida.

Ticket sales for BermudAir flights began last Thursday in the early morning. While the company would not release exact sales figures, it did say that the first purchase was within minutes of the website going live.

“My view on aviation and the business opportunity is that if you could identify the markets with the demand, and ideally the demand that is largely stable and inelastic throughout the year, then if you could couple that with the right product and the right number of seats, the right frequencies to be relevant for that market, with the right timing, you could actually make a real difference and create something that was more or less guaranteed to succeed,” Mr Scott said.

“If you look at business-class aircraft and the number of passengers flying, depending on whether it is a wide-body or a narrow-body, this is not an art created over the last 18 months. This is an art the industry has been looking at for decades.

“If you take the capacity and put it in the right aircraft, the right tube, and get the frequencies right, you can have a real viable business.”

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Published August 28, 2023 at 7:55 am (Updated August 28, 2023 at 8:29 am)

BermudAir CEO: ‘the sky’s the limit’

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