Max Kingsley-Jones/LONDON
BWIA International Airways will undertake a major fleet expansion programme in 1999, funded by a soon-to-be-unveiled initial public offering (IPO). The move follows the successful implication of a restructuring plan earlier this year by chief executive Conrad Aleong, as the airline prepares for the first profit in its 58-year history.
The Port-of-Spain, Trinidad-based airline has completed the prospectus for its IPO, which Aleong expects to take place in the first quarter of 1999. "We aim to raise $50-60 million, about 70% of which will be used to fund our new fleet," he says.
BWIA is in final negotiations with Airbus Industrie and Boeing over an order for five 154-seat aircraft, either A320s or 737-800s. "We expect to finalise a selection by the end of the year, and take delivery of the first two aircraft next July and October," says Aleong.
The other three aircraft are expected to be delivered to the airline in 2000.
They will be used to supplement, and eventually replace, some of BWIA's five Boeing MD-80s on regional Caribbean services and on routes to Miami and New York.
The airline will also next year enhance its regional network by acquiring two new Bombardier Dash 8-300s for feeder flights, plus two options.
BWIA is linked with incumbent West Indian regional airline LIAT through a 29% shareholding, and may adopt the carrier as its regional partner if a recent restructuring programme is successful. "Otherwise, we will add more Dash 8s to boost our own network independently," warns Aleong.
Although BWIA is not yet in a position to replace its long-haul fleet of four Lockheed L-1011 TriStar 500s, it is planning a major refurbishment of the 16/18-year-old aircraft. This will be part of a major brand relaunch next April.
Two of the TriStars will early next year be equipped with new two-class interiors, while a third will be fitted with a new higher density one-class cabin for the newly created BWIA Vacations division. The fourth aircraft will be returned to the owner.
The three remaining TriStars are all now leased until 2001/2002, and a decision on the long-term fleet strategy will be taken nearer that time, says Aleong. BWIA's long-haul strategy is being evaluated, and an expansion of its European network is being re- examined. Introducing the charter-configured TriStar could provide the opportunity for this growth.
The next item on BWIA's agenda is to tie down a US airline partner to boost its US feed and enable it to compete more effectively with American Airlines. "We are talking to Continental and Delta," says Aleong, and although the former appears to be the front-runner, a final decision has not been taken.
Aleong headed BWIA in the run-up to its privatisation in 1995 and then left. He was reappointed chief executive in February and immediately implemented a restructuring programme which provided a better business and operational focus, and improved yield management systems.
During the first six months of this year the airline recorded a profit of $3.2 million, and Aleong is confident that the full-year profit will be even greater.
Source: Flight International
