VZCZCXRO9144
RR RUEHAG RUEHDF RUEHIK RUEHLZ RUEHROV
DE RUEHFR #0027 0041618
ZNR UUUUU ZZH
R 041618Z JAN 07
FM AMEMBASSY PARIS
TO RUEHC/SECSTATE WASHDC 4010
INFO RUCNMEM/EU MEMBER STATES
RULSDMK/DEPT OF TRANSPORTATION WASHDC

UNCLAS PARIS 000027 
 
SIPDIS 
 
SENSITIVE 
SIPDIS 
 
FOR EB/TRA, EUR/WE 
 
E.O. 12958: N/A 
TAGS: EAIR ECON FR
SUBJECT: FLYING IN STYLE: FRENCH STARTUP ELYSAIR EYES 
TRANSATLANTIC BUSINESS CLASS MARKET 
 
 
¶1. (SBU) Summary: French start-up Elysair inaugurated flights 
on its Paris-New York route January 3 using its all 
business-class "L,Avion" brand. Touting fares that are 50% 
lower than Air France business-class and the convenience of 
using nearby airports at Orly and Newark, Elysair hopes to 
grab 10% of the lucrative business class market between Paris 
and New York in the next year.  U.S. carriers who were forced 
to move operations from Orly to Charles de Gaulle airport a 
number of years ago, and who are now faced with a rival 
seeking to use Orly as a competitive advantage, may protest. 
 
¶2. (U) Originally conceived in 2002, Elysair has spent the 
past five years developing the financing and business plan to 
offer "premium service at an attractive price," extending the 
low-cost model to high-margin business class travel. With 25 
million euros in financing drawn primarily from private 
investors such as the Rothschild holding company Compagnie 
Financiere Saint Honore, and experienced management headed by 
Marc Rochet, former CEO of French airlines Air Liberte and 
Air Outre-Mer, the new concept will receive a serious test of 
its viability. 
 
¶3. (U) By offering round-trip tickets at average price of 
around 1600 Euros, Elysair looks to undercut current business 
class fares by as much as 50% and to break even after 18 
months of operation. Operating one Boeing 757-200 aircraft 
leased from Lufthansa in a 90 seat configuration, the company 
will initially offer service five times per week, and plans 
to expand to six flights per week by Spring. Elysair will 
take possession of a second Boeing 757-200 in June. If the 
model proves successful, the company plans to extend it to 
other markets in the U.S., Russia, and Middle-East. 
 
¶4. (SBU)  Comment: With five well-entrenched and 
deep-pocketed competitors, Elysair is likely to face stiff 
competition for the premium-class customer on the Paris-New 
York route.  We will be interested in particular in how US 
carriers react.  A number of them were forced from slots at 
Orly airport to more distant Charles de Gaulle airport some 
years ago, only to find Orly's proximity now being used as a 
marketing hook by a start-up competitor. Although we have yet 
to see any overt signs of dissatisfaction, they cannot be 
pleased with this outcome, 
Please visit Paris' Classified Website at: 
http://www.state.sgov.gov/p/eur/paris/index.c fm 
 
HOFMANN