City Bird, Belgium's low-cost start-up airline, aims to raise $40 million from a public listing to help fund ambitious expansion plans designed to make it the "major long-haul operator" from its base at Brussels Airport.
The airline began operations in March with a Boeing MD-11, targeting long-haul scheduled services to major US cities and Mexico City. It has also developed a charter business to Mexico and the Caribbean through links with NUR Tourisitc, an arm of the German travel giant Karstadt, which holds nearly 40%of the Belgian tour market.
A second MD-11 arrived on lease from World Airways in June, although this will be replaced in 1998 with another new MD-11. Two Boeing 767-300ERs will also be added as the route network expands to cover Canada and South America.
The airline believes that is will need to build a fleet of ten wide-bodies by 2002 to fuel the projected levels of growth, possibly including two further 767s. There are also, as yet undefined, plans to launch a cargo service in 1999 with at least one MD-11F freighter.
To help fund the expansion, City Bird plans to have its shares listed on EASDAQ, Europe's equivalent to the USNASDAQ electronic share dealing system, by the end of this month. Low-cost start-up Debonair became one of the first UK carriers to seek a listing on the exchange earlier this year.
City Bird, which was founded in August 1996, is 59%owned by the Brussels-based City Hotels group, which launched EuroBelgian Airlines, which was eventually sold to Richard Branson to form the basis of Virgin Express.
The airline expects to end 1997, its first full year of operations, with sales of around BFr2.3 billion ($65 million)and losses of BFr400 million, as start-up costs continue. The airline aims to bring losses down to BFr20 million in 1998, however, and start trading at a profit from 1999.
Chris Avery, aviation analyst at Banque Paribas, which is jointly managing the listing with Belgium's Generale de Banque, estimates that the carrier could be turning healthy profits on sales of close to BFr10 billion by the year 2000.
He adds that City Bird has held unit costs to only ó4 per available seat kilometre (ASK), making it among the lowest in the world. Major US airlines have been averaging around ó6/ASK, while European flag carriers are in the ó8-10 range.
Source: Flight International
