Aer Arann chief Paul Schutz is aiming to maintain the carrier's fleet and headcount, insisting it needs financial rather than operational restructuring during its spell in creditor protection.
Although Aer Arann has lost €12 million ($15 million) over the last two years, Schutz tells ATI that a cost-cutting programme, redundancies and a new Aer Lingus franchise agreement had placed it on track for "a reasonably good year".
Schutz says he has "no doubt" that, without the Icelandic volcanic ash crisis in April, the airline would have avoided entry into examinership, the Irish equivalent of bankruptcy protection.
"We were ahead of budget and forecast until 'volcano day'," he says.
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On 8 September Aer Arann was formally placed under examinership, which it hopes to exit within 50 days. Under the process, Aer Arann's management retains control of the company. Schutz says the carrier is conducting "business as usual".
Since 2008 Aer Arann has cut its fleet from a peak of 15 aircraft down to 13 and made 60 positions redundant, leaving it with a total of 320 staff. It deploys five aircraft under Aer Lingus Regional branding, generating 40% of its revenues.
But the airline's cashflow was crippled by the ash crisis, which Schutz estimates racked up €4.5 million in direct and indirect costs, pushing it to the brink. "If we didn't get examinership, it would have been time to off the lights. It was that close," he says.
He explains that while the airline might have been able to weather the initial six-day airspace closure, it was stung by the series of intermittent closures which caused uncertainty and drastically shorted its booking profile, drying up its cash reserves.
Aer Arann's future activity will depend on its future investors, which are expected to be identified by mid-October, but Schutz says: "We see a deepening of our relationship with Aer Lingus and other potential franchise partners. We see that growing and, as we go forward, we will add aircraft to that [franchise] side of the business."
He adds that Aer Arann will stick with its own niche flying and that its business plan is essentially unchanged. The airline will continue to operate a 13-strong fleet and there are no plans for further redundancies.
Source: Air Transport Intelligence news
