CityJet has placed an option to take delivery of six more Sukhoi Superjet aircraft with a $210m (€192m) list price as the Dublin-based carrier advances talks with two European airlines to operate regional services for them.
CityJet founder and executive chairman Pat Byrne told the Irish Independent that the airline is also likely to execute an existing 10-order option for the Russian-built Superjet. In October, CityJet announced that it had placed a firm order for 15 of the aircraft, and the 10 options, at a list price of just over $1bn (€914m).
The airline is acquiring the jets on foot of an agreement with aircraft financing firm Falko, which buys the jets and then leases them to CityJet. The jets are being used to replace CityJet’s current fuel-hungry Avro fleet.
Mr Byrne said CityJet will probably decide whether or not to exercise all its options by the third quarter of next year.
He also revealed that the airline is eyeing more services from Dublin and Cork, possibly to Italy and Scandinavia.
The scale of the planned fleet renewal and expansion at CityJet comes after it delivered strong performance in 2015. It has endured years of losses under the ownership of Air France-KLM.CityJet, controlled by Germany’s Intro Aviation since last year, has also recently won a contract from SAS to operate a regional service on behalf of the Scandinavian airline.
As part of the agreement, CityJet acquired 100pc ownership of SAS subsidiary Blue1.
The Irish airline also placed an order for up to 14 Bombardier aircraft that will be used to operate the service for SAS. Under the so-called wet lease arrangement, CityJet supplies the jets and crews, and also paints the aircraft in SAS livery.
“We’re shaping up well for 2016,” said Mr Byrne. “Winning the SAS contract, ordering the Superjets and Bombardiers means we’re now in implementation mode. We’re absorbing Blue1 and it forms the base of our Scandinavian operation.” The operation for SAS will have bases in Stockholm and Helsinki. A third might be added.
“We’re burning cash doing that. We’re carrying Blue1 through the winter because they’re not doing any flying because everyone’s being retrained. That will cost us about €5m, but it has to be done. And the SAS contract has massive expansion capability. We’re starting with eight aircraft, but that contract could grow into a really substantial earner for us.”
He said that CityJet’s strategy is to be eventually generating between 60pc and 70pc of its revenue from contract services. CityJet still has five aircraft on contract with Air France until the end of 2017, and Mr Byrne said that he would like to see that contract continue.
He said that having ordered the Superjet, CityJet has received enquiries from mainline carriers interested in inking wet lease arrangements with the airline to operate regional services. “We’re tracking two airlines. I’d expect to have some kind of traction on one of those during the first half of 2016.”
Independent.ie
CityJet chooses Sukhoi Superjet for Avro RJ replacement
MOSCOW/DUBLIN (Sputnik) — CityJet, an Irish regional airline, said Tuesday that it had opted to buy at least 15 SSJ100 planes in a 98-seat configuration from Superjet International to renew its aircraft fleet.
“CityJet has agreed to take four aircraft in 2016 with the delivery of an additional 11 throughout 2017. The airline has also taken options on an additional ten aircraft,” the company said in a statement.
“We are very excited to be the very first airline in Europe to order this “game-changing’’ aircraft that delivers a level of comfort, plush interior design and cabin capacity that is far superior to all of its competitors,” CityJet Executive Chairman Pat Byrne said.
The Russia-produced SSJ 100 is the first aircraft in its class to offer five abreast seating combined with a cabin height of over 2 meters.
According to Byrne, the “versatile new generation jet” will fulfill the company’s requirements to operate at smaller airports such as the London City Airport and offer “significant advantages” in fuel efficiency, emissions ratings and noise reduction.
The airline intends to introduce the SSJ100 on charter activity in 2016.
Sputnik News
Sukhoi Civil Aircraft (SCA) and Irish European regional airline CityJet have signed an agreement on 15 firm orders for delivery SSJ-100 plus an option for 10 more, SCA said in a press release.
“The deal is worth more than $1 billion at the aircraft’s contract price, including options and related services. The deliveries are due to begin in Q1 2016,” SCA said. Four should be delivered in 2016 and the other 11 by the end of 2017.
“CityJet plans to use the SSJ-100 instead of the Avro RJ85 for flights to Europe, including London City Airport. The SSJ-100 will be certified to fly to London City by the end of 2016,” SCA said.
SCA is also in talks with EgyptAir to supply an initial 12 SSJ-100 with an option for 2 more.
Russia Beyond The Headlines
SAS Scandinavian Airlines sells Blue1 to Cityjet
SAS begins collaboration with Cityjet on regional jet services. As part of this collaboration, Cityjet is also acquiring 100% of the shares in SAS subsidiary Blue1.
SAS’s strategy is to offer frequent travelers a broad network with frequent flights to, from and within Scandinavia. To adapt the size of the production to traffic flows SAS utilizes hired capacity, known as a wet lease, with smaller regional jet and turboprop aircraft.
In line with this strategy, SAS has entered into an agreement with Cityjet on the wet lease of eight new Bombardier CRJ900s. SAS already operates twelve regional jet aircraft of this type through its subsidiary, Cimber.
“We are looking forward to working with Cityjet to further expand our regional route network and thereby strengthen SAS’s offering to frequent travelers. The eight brand new CRJ900s from Cityjet will provide us with efficient and flexible production of regional flights that will complement SAS’s production on the larger traffic flows,” says Rickard Gustafson, President and CEO at SAS.
The new aircraft, which each have 90 seats and are painted in SAS colors, will be put into service from March 2016 on routes and at times when there is a need for smaller aircraft. The wet lease agreement is for three years and covers eight Bombardier CRJ900s with an option on a further six aircraft.
“This is a fantastic opportunity for Cityjet to work with a leading airline such as SAS. We are looking forward to a long-term cooperation, where we will deliver a high level of quality in terms of efficiency and customer service for SAS passengers. We are also keen to benefit from the experience and knowledge of the Nordic airline industry that the acquisition of Blue1 will give us,” says Patrick Byrne, Chairman of the Board at Cityjet.
As part of this collaboration, Cityjet is acquiring 100% of the shares in SAS subsidiary Blue1. The sale of Blue1 will lead to a marginal impact on SAS’s income before tax, cash and net debt. The Group’s income after tax during Q4 2014/2015 will be negatively impacted of around MSEK 90, primarily due to write down of capitalized loss carry forwards. The sale and the new wet lease agreement are expected to increase cost efficiency and flexibility.
SAS Scandinavian Airlines