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POWDAIR IN LAST DITCH TALKS - James Cove, PlanetSKI Editor
Monday November 27, 2017 - Email this article to a friend

The airline with routes to Sion in Switzerland has lost its main financial backer and is unlikely ever to fly. It needs to find £1m by Friday. UPDATED







It's key financial backer has walked away from the project - 'personal' reasons were cited.

The airline is now on the verge of collapse before it has even taken off.

Rescue talks have been held this week and the airline is appealing to the public through a crowd-funding campaign

5,000 people have already booked flights for next winter from a number of regional UK airports - those that have parted with cash are being offered their money back.

The Dublin-based airline is now desparately trying to get community funding, but it needs £3m in total and £1m by the end of the week.

This is highly unlikely to happen and people may be cautious about handing over money to a project that has come so unstuck.

"VERY unreliable situation , you should have spent more money on a strong business plan rather than on attractive marketing actions .... I can not accept your way to turn your back on customers and beg for money ... VERY DISAPPOINTING .." said one customer on the airline's Facebook page.  

"Smoke and mirrors or just sugar coating everything makes already "shaken" customers weary of further investment and suspicious of whether there really ever was a decent business plan put in place. And if indeed in reality the writing on the cards was there for quite a while.." said another.

But some are supportive.

"So sad to hear this. A horrible situation to happen to such an already amazing company with so many great plans for the future. I'm sure this will be resolved with powdair having so much potential."

There are more comments from Facebook at the end of this article.

People on its email list are being sent requests to assist.

The airline is offering flights and benefits in return for money and is asking for donations from £1,000 to £500,000 and anything in between:

PLEDGE £1,000 -  RECEIVE 10% discount on all flights and transfer prices for the next 5 years    

PLEDGE £500,000 - RECEIVE 6250 free single flights to use over the next 5 years
     

On Tuesday powdair claimed 134 people had expressed an interest in offering financial support.

We understand a meeting took place on  Wednesday with a potential investor - the outcome is unkown.

Appealing for cashAppealing for cash























"Today's setback is both unexpected and potentially disastrous for our airline, booked passengers and resort partners," said the airline's Chief Financial Officer, Sean Pettit, on Monday as news broke. 

"Operational systems and strategies are already in place, whilst ticket sales are very strong and exceeding expectations. powdair is ready to go, but we now desperately need investment," he added.

We undersand the airline had been in failed talks over recent weeks trying to secure extra funding.

powdair has offered money back to customers, however it is also unclear how many actually handed over cash in advance.

"I am one of those season pass holders, having reserved 24 flights for myself and members of my family. But we did not 'buy' those tickets. We simply reserved seats on the services we wanted," said one of the people who had booked with powdair to PlanetSKI. He asked for his name to be withheld.  

"They never asked for money. When I messaged the commercial director on 8th November pointing out that we hadn't been asked for any money (on £3k+ worth of flights), she replied "Sean (our CFO) and our reservations team are working on a joint solution to get a payment system set up soon so we will definitely be in touch for money before you fly don't worry ;-)"  

More than 85 people have signed up as Season Pass holders, already apparently 'buying' between 10 and 80 tickets each to fly with the airline this season. 

Even though it appears they will not lose money many will likely have to re-book flights that will be considerably more expensive, especially at busy periods such as half-term.

The airline says it is now faced with two options.  

"We either postpone starting powdair this winter or we offer the airline to you, our army of passionate powdair supporters, in the hope that you'd like to own a stake in powdair and benefit in our future shared success," said a statement from the company on Monday to its customers.  

The airline was launched in a blaze of publicity across the autumn.

UK airports it has on its flight route are London City, London Luton, London Southend, Southampton, Bristol and Manchester.

Many in the snowsports industry cannot remember so much money being spent on a launch - airline or otherwise.
PowdairPowdair plan

























There will be many red faces as the airline is already officially partnered with 17 resorts in the Valais in Switzerland and Portes du Soleil that straddles the Swiss/French border.

These include Verbier, Crans Montana, Nendaz, Anzere, Thyon 4 Vallées, Morzine, Champéry, Avoriaz, Châtel and Les Gets - and already they have a raft of events and marketing activity planned with them.

Private messages have been sent by powdair trying to reassure the partners that the venture is not yet doomed.

However it all comes as no great surprise for those that follow these matters.

"If the airline even takes off I will eat my hat," was how one MD of a large UK snowsports travel company put it to PlanetSKI last month.

He was not the only one with such a view.

So, what went wrong for powdair?

Essentially it had big obstacles to overcome from the outset. 

Swiss skiing is in general decline with the British market but it has a core customer base that is very well served already with flights into Geneva, Zurich and to a lesser extent Basel.  

They are high-quality carriers with numerous flights and some very competitive pricing.

The demand to fly in to Sion, in the Valais canton, is limited.

"If the Swiss tourists authorities want more British people to ski in their resorts they need to come up wth deals on pricing or incentives like free ski passes for children or other special offers. Air access is not the problem," said one leading figure in the UK sponsports industry to PlanetSKI.

"There are dozens of flights going into Geneva every day and at some very good prices. And besides the journey from Geneva airport to Verbier is a good one, that is short and scenic and I will contiue to use Geneva," said a British chalet owner from the Swiss resort to me earlier in the autumn.  

He is a core target customer.

Others in the industry go further. 

"What a depressingly predictable failure this is, and all the wrong publicity for the UK snowsports industry, and more specifically the brands who lined up alongside this doomed venture without sufficient diligence of the proposition," said the managing director on Ski Solutions, Craig Burton, to PlanetSKI. 

"Tour operators don't always call it right, but it's noticeable that not one credible operator backed this. Why? 

"Well, we live and die by our deep understanding of demand profiles, risk and pricing built up from decades of experience, and a connection to and appreciation of the needs of skiers and boarders going to the mountains.  

"Powdair was out of touch with reality and the numbers were never going to stack up." 

The airline, Swiss, will be flying from the UK to Sion next winter.

From London Heathrow to Sion once weekly on Saturdays between 3rd and 24th February 2018.

From London City to Sion on Saturday during half term 2018 on 10th February 2018.
 
Here at PlanetSKI we will be updating this story with further news and reaction later so do check back.

Powdair - will it ever fly?








FACEBOOK REACTION:

Claire Jeannerat: If you don't have the money to operate how will you have the money to refund people like me who are out of pocket? I am devastated by this news. It was the first time I would made it in 3 years to have some kind of Christmas with my family in England. Because travelling with 3 small children alone isn't easy. Finally Powdair seemed to give me a far closer and easier option. Utterly gutted I most probably wont have that precious family time now...  

Edward Puig: Good luck! Hope you will get through the turbulence successfully and we could fly from/to Sion .  

Brigette Pinckaers: VERY unreliable situation , you should have spent more money on a strong business plan rather than on attractive marketing actions .... I can not accept your way to turn your back on customers and beg for money ... VERY DISAPPOINTING ..    

Sam Plank: So sad to hear this. A horrible situation to happen to such an already amazing company with so many great plans for the future. I'm sure this will be resolved with powdair having so much potential.  

Ali Williams: So, here is my issue. I've contacted you several times over the past few months, partly to ask about how we get the Val d'Anniviers ski region involved, I've never received any sort of response. ‪I then received your communication regarding the sudden loss of financing and emailed you approximately 9 hours ago to understand what the investment offering looked like - yet again, no response. ‪Now I see your offer of pledges - seemingly a great way for you to be given free cash at absolutely no risk to yourselves, with potentially no reward for the investors - there are no guarantees any of the flights will continue - or with the same frequency. I see the small print says ** rules apply - I am unable to see any rules anywhere. ‪More worryingly, you spoke of 5000 flights booked to date - even if that was at GBP 200 per flight, that amounts to only 1 million income - how on earth is this going to work - you say you need 3 million income to operate this season - presumably at a significant loss. I do not think it is right or acceptable to ask people to invest without sharing the financial details of this investment - for example, what are the fixed costs? What are expected sales this season? What are the variable running costs? What debt does the business have? ‪I find it difficult to believe that an investor only walked away yesterday - the communications and funding strategy appears too well planned and results in you getting free funding from a group of people who were counting on on you for their ski travel this season. I see how this is highly effective from your side but can not see how it is fair in any way. 
 
Marie-Adele Beytrison: I believed in you... it's so sad...    

Claire Jeannerat: The difference between Powdair and these other airlines mention above that have gone under is that you are asking us- the customers to invest so that this company can even take off when we have already brought tickets! It is natural that no matter how "positive" and upbeat the manner that this information is related to us (as an opportunity) many of us feel let down and disappointed therefore it is hard to place a level of trust and therefore money on the plate without any guarantees or cold hard facts. Smoke and mirrors or just sugar coating everything makes already "shaken" customers weary of further investment and suspicious of whether there really ever was a decent business plan put in place. And if indeed in reality the writing on the cards was there for quite a while..


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