Monday 27 March 2017

Byrne praises turnaround as CityJet slashes losses to €10m

Cityjet executive chairman Pat Byrne
Cityjet executive chairman Pat Byrne
John Mulligan

John Mulligan

Dublin-based airline CityJet slashed its losses last year to €10m from €30m in 2014, marking a significant change in its fortunes.

Speaking to the Irish Independent, executive chairman Pat Byrne described it as a "phenomenal turnaround" for the carrier, which was acquired earlier this year by Mr Byrne and aviation industry backers from German firm Intro Aviation.

Turnover at the airline fell to €165.1m in 2015 from €179.7m in 2014. That decline came as CityJet revamped its network, dropping some routes, and refocused the business towards a different long-term model.

Mr Byrne, who founded CityJet in 1992, said that turnover in 2016 will be up about 30pc on the 2015 figure. He said the airline will also record a loss this year, but it will be better again than the €10m loss notched up in 2015.

CityJet had been owned by Air France-KLM before it was sold to Intro Aviation in 2014. But Intro struggled to devise a strategy to revitalise the loss-making Irish airline, and agreed to later agreed to sell it back to Mr Byrne and his backers.

Since he returned in an executive capacity to CityJet last year, Mr Byrne has set about revamping the carrier's fleet, placing a more than $1bn order for Sukhoi SuperJets, and also buying Bombardier aircraft that are being used by its Scandinavian subsidiary, formerly Blue1.

CityJet acquired Blue1 from Scandinavian carrier SAS for €1.4m in November last year. CityJet now operates a regional service for SAS on a wet-lease basis, providing the aircraft and crew.

Had Blue1's operations been included for the whole of 2015, it would have added €29.2m in revenue to the CityJet group and resulted in it making a €7.7m operating profit.

Mr Byrne said that since 2015, CityJet's group staff numbers have risen from 550 to 950. The latest set of accounts actually show that CityJet's headcount fell last year, but that was largely due to the disposal of now defunct Belgian carrier VLM.

CityJet ended 2015 with 17 aircraft and will have 26 at the end of 2016. Next year, its fleet size will grow considerably, partly due to the addition of nine new aircraft.

But CityJet is also in the process of buying Aer Lingus Regional operator Stobart Air. Mr Byrne declined to comment on the sales process. However, it's thought the acquisition could be sealed by the end of the year.

Stobart Air currently has a fleet of 17 ATR turboprop aircraft that fly mainly between Ireland and the UK, funnelling transit passengers on to the Aer Lingus north Atlantic network.

Industry sources say it's likely that CityJet will utilise a mix of jets and turboprop aircraft on the Aer Lingus Regional routes once it acquires Stobart Air.

Mr Byrne also declined to comment on speculation that it is close to buying SAS subsidiary Cimber, but there is speculation that deal is close to completion.

CityJet carried 930,000 scheduled passengers last year and will handle 950,000 this year.

The long-term aim for the carrier is to have 80pc of its business derived from wet lease operations. Half its fleet is now assigned to wet lease operations, compared to 30pc a year ago.

The chairman said that he welcomed an upcoming Labour Court hearing regarding a pay dispute involving about 20 Dublin-based CityJet pilots who had threatened to strike.

Irish Independent

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