Two of Europe’s biggest regional airlines, Air Nostrum and CityJet aim for closer cooperation , with a combined fleet of 88 aircraft and up to Euro 700 million in revenue from wet lease and franchise contracts they are out to conquer the regional market in Europe? Yet they are both over dependent on 1 major customer each for their survival, CityJet on SAS and Air Nostrum on Iberia Regional, they both have a large fleet of what I call “loser” aircraft programs as CityJet has 7 (+8 on order) of the 95 passenger Russian Sukhoi SSJ100’s, the ONLY operator in Western Europe, and only the 2nd western airline to operate it commercially (after Mexico’s Interjet), its cheap and it is about to get the boot from LH’s Brussels Airlines for poor dispatch reliability! Air Nostrum has 27 of the 60 delivered (just 68 ordered in 8 years of production) 100 passenger CRJ1000’s (a 18.2 meter stretch of the 1970’s CL-600 Challenger business jet), that airlines just don’t want or need, it is a very long tube from the back, and noone is buying it, airlines know best as to what is good and bad, it is why aircraft orders say novels about any aircraft no matter what an OEM says or thinks!

Read my regular Articles and Posts on LinkednIN:  https://www.linkedin.com/in/tomas-chlumecky-3200a021/

July 17, 2018

100 passenger CRJ1000 of Air Nostrum (Spain)

95 passenger Sukhoi SSJ100-95 of CityJet (Ireland)

Tomas’ Comment:

Interesting development, but no surprise, CityJet has been looking to buy other other operators as it looks for M&A to grow.

In October, 2015 it bought Finish operator Blue1 from SAS and then got a nice contract to fly for SAS, and to add to that they bought Danish Cimber Air in January, 2017 and took over the operation of 11 x CRJ900’s for SAS as well, which was right after they failed to buy UK regional Stobart Air in December, 2016 .

They are the only Western European operator for the 95 passenger Russian SSJ100, with 7 in service and 8 on order, they got a ‘sweet’ deal, but I have always said its a rotten deal, flying Russian aircraft should be a no-no for all EU airlines in these times, when the Cold War is back on and we Eastern Europeans fear the Russian and want little to do with their aircraft.

CityJet operates 44 aircraft  (7 x SSJ100’s, 15 x ARJ86’s for AF/KLM and 22 x CRJ900’s all for SAS), in fact Cityjet is very vulnerable to these wet lease contracts, it also flies 5 x SSJ100’s for Brussels Airlines (LH subsidiary), but they are going to be released early, due to poor dispatch reliability, no surprise! you get what you pay for.

So with more SSJ100’s coming to CityJet, I say NYET to the SSJ100 with European airlines, this is no time to support the Russian military-industrial complex! such operations should be boycotted by EU nationals that have a ‘history’ with Russia.

Meanwhile Air Nostrum, operates 44 aircraft (27 x CRJ1000’s a 100 pax rare bird, just 60 delivered out of 68 ordered in 8 years, a commercial disaster, 4 x CRJ900, 7 x CRJ200, 5 x ATR-720600 and 1 x ATR-42-500), and its whole existence is pretty much secured by flying for Iberia Regional, with 36 of its aircraft (82%) dedicated to Iberia Regional.

The remaining 8 aircraft, all CRJ1000’s are split between 2 to Lufthansa, 2 x SAS, 2 x Croatia Airlines and 2 for Binter Canarias).

While both airlines are a success, they are very dependent on SAS and Iberia for the vast majority of their flying, and little to no flying on their own anymore, all contract flying these days.

So I am not buying the BS of a big ACMI flying, the SSJ100 is a “dubious” aircraft to try and sell to big airlines from a PR perspective, the CRJ-1000’s a stretch too far (12 seat Challenger business jet stretched from 20.9 meters to 39.1 meters, yes 18.2 meter stretch), its a long long tube looking from the back!

We shall see, but I don’t see it, I think both have the wrong equipment in my opinion, SSJ100’s and CRJ1000’s and neither is a commercial success, in fact both are commercial disasters for a reason! airlines just DON’T WANT or NEED them! order books do not lie.

—————————————————————————————————————————–

Airline Economics Daily – July 17, 2018

On Day Two of the Farnborough airshow, Air Nostrum and CityJet announced that they have signed a heads of terms with the aim to bring about closer co-operation between the two airlines under the umbrella of a new holding company. Subject to the normal approval process, the  merger of these two regional airlines would create the largest pan-European regional airline group.

Air Nostrum is the regional operator for Iberia under a longstanding franchise agreement flying to more than 60 destinations within Europe and Africa, with a fleet of 50 aircraft, including 30 CRJ1000s. Air Nostrum is also active on wet lease services for customers across Europe, including Lufthansa, SAS, Binter or Croatian Airlines.

CityJet operates an extensive regional network of services under wet lease contracts with Air France, Brussels Airlines and SAS with a fleet of over 40 aircraft based in nine locations across Europe. This fleet includes 22 new CRJ900s acquired specifically for wet lease services.

The two airlines are coincidental of very similar age, having been founded in 1993 (CityJet) and 1994 (Air Nostrum), both now being close to their 25th year of operation.

Carlos Bertomeu, President of Air Nostrum said: “Europe is experiencing substantial expansion of wet lease contracts, otherwise known in North America as Capacity Purchase Agreements, as established airlines pursue a strategy of outsourcing their regional flying programmes.

By CityJet and Air Nostrum finding a formula for combining their respective resources in terms of aircraft, crew and support services, this will undoubtedly result in a far more comprehensive and cost effective option for leading airlines in Europe to outsource their regional networks with confidence in the strength of this proposed new entity as an ideal partner for such activity”.

Pat Byrne, CEO of CityJet said: “There are so many things we have in common with Air Nostrum, especially the fact that we both operate large fleets of Bombardier CRJ 900 and CRJ 1000 aircraft which we believe is a robust and economic platform and ideal for wet lease contracts. Our combined fleets would represent a total fleet strength close to 100 aircraft.

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.”

The consolidated annual gross revenue of Air Nostrum and CityJet would be circa €700 million, derived from a portfolio of wet lease and franchise contracts throughout Europe. In the official release, the two companies said that this provides “a very solid financial base in which prospective contracting airlines can have confidence in terms of the proposed new regional airline group’s capacity to deliver exceptional service on optimal economic terms”.