United Airlines has secured external investors for its new Avolar business jet operating subsidiary as it strives to cut capital expenditure in the face of huge losses following the 11 September terrorist attacks. Star Alliance partner Air Canada, meanwhile, has launched a charter unit, AC Jetz, targeting sports teams and corporate clients.
Reporting a third-quarter net loss of $542 million before special charges, United chief financial officer Jake Brace told analysts the airline had struck a deal for external investors to take over Avolar's "future financial obligations". Details of the arrangement have not been revealed.
Avolar says bringing in external investors "was always part of the game plan, but after 11 September the milestone was moved forward". United made an investment of $250 million to launch the venture, which will encompass fractional ownership, corporate shuttle and charter operations, and has placed orders and options with Dassault and Gulfstream for 157 business jets worth well over $4 billion.
Avolar has 12 Gulfstream IV-SPs and Vs on firm order, plus 23 on option, and last month signed a contract with Dassault for 46 firm and 76 option Falcon 2000s, 2000EXs and 900EXs. The company plans to begin fractional operations next April, with 22 aircraft scheduled to be in service by the end of 2002.
Air Canada's new venture is more modest. Initially AC Jetz will use three, and then possibly four, Boeing 737-200s which are surplus to mainline requirements as a result of service reductions after 11 September. The aircraft are being reconfigured to all-business-class seating for 48 passengers. The airline says it has already signed agreements with a number of sports teams.
Source: Flight International
