Belgium’s newly independent regional carrier VLM Airlines is aiming to grow revenue by two thirds with the planned introduction of two Sukhoi Superjet 100s into its Fokker 50 turboprop fleet in 2015.
The Russian-built regional jet should pave the Antwerp-based ACMI and charter operator’s way to starting scheduled flights, but the balance between wet-lease, scheduled and un-scheduled services is not yet clear, says chief executive and majority shareholder Arthur White tells Flightglobal, shortly after completing his management buyout of the carrier from German turnaround specialist Intro Aviation.
VLM has signed a tentative lease deal with Ilyushin Finance for two long-range Superjet 100LRs that are to be delivered in April 2015, options for two additional aircraft, and purchase rights for another 10 of the type. Meanwhile, the airline is planning to reduce its 12-strong Fokker 50 fleet to 10 aircraft next year.
Europe’s further economic development will determine how many additional Superjets VLM will introduce and how far its scheduled network will be built up, says White. He expects turnover to grow from around €37 million ($46 million) in 2014 to somewhere in the €60 million-range next year. But beyond that, he says, it is “difficult to plan”.
Three to four routes from Antwerp airport have been earmarked for scheduled services with the 100-seat regional jet, says White. But he says there are “limited opportunities” as flights must not compete with VLM’s wet-lease and charter custom – which is to remain central to the airline’s business – and any budget or mainline carriers that could operate larger aircraft at lower costs. Thus the Superjets will also be used for ACMI and charter flights, particularly from airports in the Benelux region.
The aircraft’s capability to operate from Antwerp’s 1,500m (5,000ft) runway was a central requirement for the type’s selection. While it is a constraint, White says the short landing and takeoff capability must be employed as a means to find niche routes from small airports where low-cost carriers cannot operate with Airbus A320s and Boeing 737s.
VLM also considered the Bombardier CSeries, Embraer 190, Fokker 100/70 and – as an interim solution – the 737-500 for their fleet plans. The 737 was discounted as engine maintenance costs would have exceeded the powerplant’s asset value, says White. The under-development CSeries dropped out of the race as it will not be available in the required timeframe.
Meanwhile, the performance the of E-190 and Superjet were “very close”, he says. But the decision was finally made in the latter’s favour due to its “better passenger experience” – as a result of the Superjet’s wider fuselage versus the E-Jet – and “enthusiasm” by Ilyushin Finance, says White. VLM will be Sukhoi’s second Western customer after Mexico’s Interjet.
White concedes that VLM secured a cost discount that had “much to do “ with becoming European launch customer of the Superjet and its purchase price which, he says, is “far below” that of the CSeries. But he insists that the price reductions were only a “bonus” on top of the aircraft’s performance and passenger comfort levels.
Intro Aviation was not involved in the order negotiations, he says, even though the firm has also evaluated the Superjet as potential replacement for CityJet’s BAE Systems Avro RJ85 regional jet fleet. White says he decided to introduce Superjets based on available information, ahead of any formal sales campaign by any of the manufacturers under consideration.
Both firmly ordered Superjets will be delivered in standard configuration as the long-range variant has not yet been certificated by the European Aviation Safety Agency. White says that Sukhoi has made guarantees in the sales agreement, with EASA approval targeted for September 2015. The aircraft will thereafter be modified to LR configuration, which mainly covers software updates to the engine control computers.
White says Sukhoi made similar concessions to gain steep-approach approval for London City airport in the “relatively near future”. But both sides are still discussing the timeframe for the approval programme, which would involve City airport or another gateway with similar conditions.
The approval will be important for VLM as it wet-leases half of its existing fleet to CityJet, which uses the East London gateway as its network hub.
Meanwhile, VLM is in no rush to replace its Fokker 50 fleet, as there is no equivalent successor model for the 50-seat legacy type, says White. The twin-turboprops belong to the airline and generate low capital cost. Engine maintenance expenses could be a driver for the aircraft’s retirement, but he says this would “certainly” not be the case until 2017 with “good” engine management.
In airframe MRO terms, the landing gear is the main retirement driver with service life limit of 70,000 cycles, but this should cause no restrictions anytime soon, he says.
Flightglobal’s Ascend Fleets database shows that the 12 aircraft, which have been manufactured between 1987 and 1992, have accumulated between 32,000 and 51,000 cycles. If VLM were to opt for 50-seat ATR 42 or 70-seat ATR 72 turboprops as a potential successor, White says “we would just be another ATR operator, and there are many in Europe”.
Plans for the management buyout of VLM from Intro Aviation in October were made during three months, says White. Intro became the carrier’s sole shareholder, when it acquired Irish carrier CityJet from Air France-KLM in April; VLM was a wholly-owned subsidiary of CityJet.
While VLM was set up as a semi-independent ACMI and charter specialist straight after the CityJet acquisition – with Intro concentrating on the latter’s turnaround and fleet renewal plans – White insists there were no initial plans for a full separation. The strategy to grow wet-lease and charter activities had been already been developed since 2012, he says. But its implementation was delayed due to constraints when the airline belonged to Air France-KLM. This included requirements to provide up to three Fokker 50s as spare capacity, which could be not employed for charter customers.
There was no also sales staff to concentrate on marketing charter capacity. White says that VLM merely responded to external enquiries, if aircraft were available. Meantime, however, charter operations have doubled over the last two years.
The acquisition from Intro was made amicably. White says that working with Intro’s founder, veteran airline entrepreneur Hans Rudolf Wohrl, was “inspirational”.
Source: Cirium Dashboard
