Irish

Tuesday 29 July 2014

Securing new investor is preferred option for troubled Cityjet -- owner

John Mulligan

Published 09/11/2012|05:00

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CITYJET owner Air France-KLM is still mulling outside investment or a trade sale of the loss-making Dublin-headquartered subsidiary, but probably won't make a decision until early next year.

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Cityjet chief executive Christine Ourmieres confirmed at a London travel trade show that discussions on the regional airline's future are ongoing.

She told Bloomberg news agency that securing a new investor for Cityjet remains the preferred option. However, with Cityjet the single biggest customer at London City Airport, a trade buyer could also emerge, she hinted.

London City Airport is currently headed by former Dublin Airport Authority boss Declan Collier.

"It's a very dynamic process," Ms Ourmieres said. "London City is a very attractive position. So we will see."

Cityjet made an €8.8m loss in the nine months to the end of 2011, with turnover at €238m. It made a €55m loss in the 12 months to the end of March 2011, when turnover was €316m.

Ms Ourmieres has conceded that the carrier may not make a profit this year.

Last month, Air France-KLM chief financial officer Phillipe Calavia said that Cityjet is still not at a breakeven position and had recorded a "slightly negative" operating result in the three months to the end of September.

Sweeping

The parent group's own earnings for the period beat expectations, delivering a 27pc jump in operating profit to €506m.

Air France-KLM is engaged in a major transformation project designed to bring the group back to firmer financial ground. It also involves sweeping changes to its organisational and management structure.

Meanwhile, British Airways owner IAG, which is headed by Willie Walsh, yesterday made a formal offer to buy the 54pc of Spanish low cost carrier Vueling that it doesn't already own.

IAG owns 46pc of the carrier through Iberia and has offered to pay €113m to buy the rest.

The offer came just as IAG is poised to reveal plans to lay off as many as 7,000 staff at Iberia, as the airline struggles to cope with Spain's debilitating recession.

Irish Independent

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