Business

Thursday 21 August 2014

CityJet cuts losses and closes London office amid revamp

John Mulligan

Published 17/07/2014 | 00:00

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Cityjet chief executive Christine Ourmières
Cityjet chief executive Christine Ourmières

CityJet is closing its London office and moving support operations to its Dublin base as it continues a revamp following its acquisition from Air France-KLM earlier this year by Germany's Intro Aviation.

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CityJet's chairman, Peter Oncken, has also revealed that the Irish carrier's operating losses more than halved last year to €17m, but that revenues declined 32pc to €203m as it scaled back operations.

Mr Oncken confirmed the financial performance in an interview with aviation research group CAPA.

He added that CityJet, whose chief executive is Christine Ourmieres, has "more than a good chance" of becoming profitable.

Intro Aviation forecast earlier this year that CityJet could break even by next year.

Ms Ourmieres, who owns 7.5pc of the airline, has previously noted that CityJet's development was hampered as part of Air France, due to the way it had to sell tickets, for example.

CityJet's primary operating base is London City Airport.

"We have seen the same situation when we took over DBA (Deutsche BA) from British Airways," said Mr Oncken.

"When you are a regional airline of a large European network carrier and you operate in a market that is not their home turf, they are not really focused on what you should do," he said.

"If you don't understand these markets, if you don't sell in these markets and if you have a network which is not suitable for the needs of the market, you run into losses."

He said that CityJet hopes to conclude agreements in coming weeks with new airline partners that will see it feed their hubs.

Mr Oncken has also confirmed that CityJet and its Belgian subsidiary VLM are about to be formally separated.

VLM, which CityJet acquired in 2007, will focus on providing wet lease services, where its aircraft and crew are rented out to other carriers, and on charter flights.

"They will work with each other, but also be independent," he said.

VLM will be responsible for marketing its own capacity. CityJet will use it as a capacity supplier on an arm's length basis when required. VLM aircraft have begun to be painted in a new livery.

An image makeover of Cityjet is due to be unveiled in September, while a decision on a fleet renewal programme is also expected soon.

It's possible that CityJet may opt to plump for jets made by Brazil's Embraer, but it's also been assessing other jets.

CityJet is also facing competition on its key London City-Dublin route.

From the autumn, both FlyBe and British Airways are launching services on the route.

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