CityJet agrees merger with Spanish carrier
Dublin-based CityJet has struck a deal with Spain's Air Nostrum, which the companies said would create Europe's largest regional airline group.
The tie-up is aimed at having the scale to win a greater share of the so-called wet-lease market - where airlines operate regional routes on behalf of bigger operators.
Air Nostrum set up an Irish unit last year, Hibernian Airlines, with an eye on rival Stobart's contract to operate the Aer Lingus Regional service when it comes up for renewal.
CityJet CEO Pat Byrne has also previously said he would be interested in tendering for the franchise contract.
The merged businesses will have a combined fleet of close to 100 aircraft, and annual revenues approaching €700m.
Air Nostrum, which is controlled by building materials group Nefinsa and Spanish bank Caja Duero, and CityJet signed what they described as 'heads of terms' to bring the airlines under a new holding company.
The breakdown of ownership and proposed corporate structure were not announced, and the deal will require regulatory approval at EU level.
Air Nostrum employs 1,450 people, and is best known as the regional operator in Spain and Africa for Iberia - a sister company to Aer Lingus.
It has a fleet of 50 aircraft, including 30 Bombardier CRJ1000 regional jets, and provides wet-lease services for Lufthansa, SAS, and Croatian Airlines.
CityJet employs 1,250 people in nine European countries and operates wet-lease contracts with Air France, Brussels Airlines and SAS. Its fleet of over 40 aircraft including 22 new Bombardier CRJ900 regional jets.
Mr Byrne, who returned to the business in 2016, having founded it back in 1993, said the deal with Air Nostrum will provide a "very solid financial base", underpinning confidence for contracting airlines.
"By coming together, we believe we will be in a position to respond to the specific needs of customer airlines through our flexibility in the provision of safe, dependable and quality assured operations.
"Our respective proven capacity and asset management expertise in acquiring aircraft for new wet lease contracts is also a significant added benefit we can provide to our airline customers," he added.