Monday 18 December 2017

CityJet has been sold and now eyes flotation

Cityjet founder Pat Byrne
Cityjet founder Pat Byrne
John Mulligan

John Mulligan

Dublin-based airline CityJet has been sold by German owners Intro Aviation to founder Pat Byrne and a group of investors.

And in an exclusive interview with the Irish Independent, Mr Byrne said that CityJet is likely to pursue a stock market flotation in two to three years' time, as he predicted a reversal of fortunes for the carrier.

Mr Byrne declined to reveal precisely who his new co-owners in the airline are, or what price was paid to Intro Aviation, which had bought loss-making CityJet from Air France-KLM in 2014 for virtually nothing.

He said the new investors are "European experts in aviation finance".

Mr Byrne founded CityJet in 1992, and its first flight was in 1994. He resigned as chief executive in 2000, but had remained as non-executive chairman of the group until its sale to Intro in 2014.

Air France-KLM had acquired CityJet outright in 2000. The Irish airline has been heavily loss-making since 2008, having racked up hundreds of millions of euros in losses. But Mr Byrne said he's confident that CityJet will make a "modest" profit this year.

He also expects annual turnover to jump to about €300m within two years from the €177m it generated in 2014. It made a €22.7m loss that year.

Over the past 18 months, CityJet has worked closely UK-based aircraft leasing firm Falko, which facilitated the short-term funding of the airline through a sale and leaseback of CityJet aircraft last year.

Falko, which is owned by funds controlled by US investment giant Fortress, is still collaborating closely with CityJet.

Mr Byrne said that the acquisition from Intro Aviation was a "great feeling".

"I always thought there was a huge, latent talent in CityJet and I just felt that if I could provide the leadership for that there would be a lot of possibilities," he said.

Mr Byrne added that he now has a significant minority shareholding in the airline. It's understood to be less than 15pc.

A stock market listing is "the ideal way to go", he said.

"I think it's two-and-a-half or three years away. You have to have momentum and forward contracts. A listing is probably more likely than a trade sale."

CityJet, which carried just over two million passengers last year, has been active in the past seven months ordering new aircraft, and now has orders placed for more than €1bn of jets that will be used to expand its operations.

It's focusing on expanding its wet lease business, where it operates routes for other carriers using CityJet's aircraft and staff, but branded under the client's livery. CityJet secured a contract with Scandinavian carrier SAS last year to operate short-haul services using former SAS subsidiary Blue1, which the Irish airline bought as part of the deal.

Full interview, p5

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