Tuesday, January 24, 2017

CityJet acquires Cimber; orders up to 10 CRJ900s

Irish regional airline CityJet is to acquire Scandinavian Airlines’ (SAS) Danish regional subsidiary Cimber and has signed a conditional purchase agreement for six Bombardier CRJ900s, plus four options.

Dublin-headquartered CityJet already operates eight CRJ900s on wet-lease to SAS from Stockholm and Helsinki, as part of its October 2015 acquisition of Finland-based Blue1 from SAS.

SAS is now also disposing of Cimber so it can focus mainline operations on larger traffic flows, operated by a more uniform aircraft fleet, delegating thinner routes to regional partners.

“The divestment of Cimber is in line with our strategy to simplify and focus on SAS’s own production platform. Thanks to synergies between CityJet and Cimber, the production cost for Cimber production will be further reduced, creating the conditions to maintain and develop regional routes,” SAS president and CEO Rickard Gustafson said, announcing the agreement Jan. 24.

CityJet will take control of Cimber on Jan. 31. CityJet will then add Cimber’s SAS wet-lease activities to its own contract with SAS, which has been extended from three to six years effective Jan. 31.

The Irish carrier will continue to operate Cimber’s Copenhagen network – covering 30 European destinations – for SAS using Cimber’s current fleet of 11 CRJ900s, which will ultimately be replaced by the provisional aircraft order announced in tandem with the acquisition.

Bombardier valued the agreeement—which is expected to be firmed on Jan. 31—at $280 million, potentially rising to $467 million if the options are firmed.

CityJet is a relatively new CRJ operator. The eight aircraft it already operates will be joined by a further four that were previously ordered in early 2017, taking its existing fleet to 12 of the type. The 11 Cimber aircraft will give CityJet to a total to 23 CRJ900s, but those 11 aircraft will be sold between February and mid-2017 and replaced by the six CRJ900s and four options announced Jan. 24. The replacement aircraft will be delivered from the second half of 2017 through to the beginning of 2018.

The CRJ900 fleet will be operated exclusively on behalf of SAS, in SAS colors and crewed by CityJet staff. In total, SAS will contract 22 CRJ900s from CityJet through this transaction.

“This new SAS contract and the growth delivered by the acquisition of Cimber advances CityJet’s stated strategy of building its role as a provider of regional jet capacity to airlines across Europe and follows our successful inauguration of services on behalf of SAS in March 2016,” CityJet executive chairman Pat Byrne said.

SAS acquired full ownership of Copenhagen-based Cimber in February 2015 to secure “more focused and flexible regional production.” SAS will take a SEK20 million ($2.3 million) hit from the sale during the first quarter of 2016-17.

CityJet, which is active in scheduled flying, wet-lease work and ad-hoc charters, has been through several transitions over the last few years. Air France sold the airline to German investor Intro Aviation, which in turn sold CityJet to the airline’s original founder Pat Byrne and a consortium of private investors in March 2016.

The Irish carrier was previously in talks to acquire UK regional Stobart Air, but these negotiations ended without agreement.

Beyond the CRJs, CityJet has 17 Avro RJ85s and is also a Sukhoi Superjet operator, with 15 SSJ100s coming on lease and options on an additional 16. In late 2016, Byrne said he expected to firm half of the SSJ options in 2018. 

(Victoria Moores - ATWOnline News)

No comments: