CityJet (WX) was founded in 1992 by Irish Businessman Pat Byrne and pioneered scheduled services between London City Airport and Dublin with a five times daily flight commencing January 12, 1994. Initially, the route was flown under a franchise with Virgin Atlantic as ‘Virgin CityJet’ and later expanded to include flights from Dublin to Amsterdam and Brussels using a fleet of British Aerospace (BAe) 146s with leather seats, free champagne and orange juice. The partnership continued until July 1997 when CityJet terminated the franchise, at a cost of €950,000, after Virgin entered the European short-haul market with low-cost carrier Virgin Express.
In its formative years the carrier failed to make a profit, losing €38 for every passenger it carried and so in January 1997 a rescue plan was announced, with creditors writing off £6m debts. Malmo Aviation of Sweden went on to purchase a 42% stake. But less than 12 months later their shareholding was sold to private Irish investors, following disagreements over the future of the company.
UK cargo operator Air Foyle made a successful bid for CityJet in April 1999. It was hoped that the deal would return the airline to profitability by developing its burgeoning relationship with Air France, for whom it had already undertaken flights on a franchise basis between Dublin and London City, to their hub in Paris (CDG).
In May 1999 the French flag carrier took a 25% stake in return for a £2m loan and subsequently assumed complete control of the airline in February 2002.
Now marketed as ‘CityJet for Air France’ they continued to focus on the London City market and connecting European cities to the Air France hub in Paris, with a fleet of six BAe 146s and two Saab 2000s.
In March 2007 ScotAirways joined the ‘CityJet for Air France’ franchise, operating its existing services from London City to Edinburgh and Dundee with Air France flight numbers, as well as adding new services to Belfast City Airport, Strasbourg and Eindhoven from London City on behalf of CityJet. The agreement ended on December 31, 2010.
On December 24, 2007 Air France-KLM group purchased rival regional carrier VLM. In order to improve cost synergies, they decided to merge its operations with CityJet. By June 1, 2010 their fleet of seven Fokker 50 aircraft had been repainted in CityJet colours.
In a bid to cut costs Air France-KLM put CityJet up for sale, with German specialist airline investor Intro Aviation acquiring the loss making carrier in May 2014. VLM, who had retained its own AOC, was later de-merged and sold in a management buyout.
The new owners set to work establishing CityJet as a competitive, stand alone regional airline, turning its focus from poorly performing routes and building a suitable network, focused on the needs of the market.
SPREADING ITS WINGS
Free from the restraints of operating under Air France, the airline began to implement changes to its network and commercial strategy. This included the launch of new services from Cardiff and Cambridge Airports during 2014. However, due to ‘shifting customer demand’ this operation was short lived, with Cambridge flights ceasing after just four months and Cardiff flights ending on June 29, 2015.
In 2014, CityJet started a new codeshare with Guernsey based airline Blue Islands, after the latter ceased flights on a number of its European routes. Blue Islands would operate flights from Jersey to London City, and passengers would the board a CityJet operated flight to a European destination. Rob Veron, Managing Director of Blue Islands commented at the time: “Our codeshare with CityJet will transform travel to and from Jersey to Europe. Passengers will immediately have access to three new European cities on our network together with Amsterdam and Paris, significantly more frequency, and greater flexibility, and all bookable with Blue Islands.”
Founder Pat Byrne rejoined the airline board in February 2015 as Executive Chairman and steered the company during this period of expansion and strategic development. This included a complete rebranding, unveiled in September 2015 to reflect the companies new independent spirit.
In October 2015 the airline signed the first of their new wet lease agreements with SAS Scandinavian Airlines and as part of the deal, purchased Finnish operator and SAS subsidiary Blue1.
Describing how the Blue1 deal gave CityJet the chance to build a Nordic operation, the airlines then Chief Commercial Officer Cathal O’Connell told me in 2017: “What they gave us was a core infrastructure in Helsinki, Finland. We took on their pilots and cabin crew and converted them on to the CRJ900 and took on new pilots because of the scale of the operation which now has 12 aircraft operating on behalf of SAS”.
Almost 25 years after founding CityJet, it was announced on March 24, 2016 that Pat Byrne would lead a group of investors in purchasing the airline from Intro Aviation. The plan was to continue to expand their wet-lease business while maintaining some of its own scheduled flying.
BUILDING AN ACMI BUSINESS
For many years in the United States, smaller airline operators have flown sub-100 seat aircraft on behalf of mainline carriers. In Europe, this has predominantly been handled by the larger companies themselves, often to the detriment of their finances. Over the past few years there has been a shift in strategy here in Europe and ‘legacy’ operators are starting to look to smaller carriers to take on these thinner routes at a much lower cost.
“Our intention going forward, is that we will develop CityJet into the best ACMI provider in Europe, but also, we see it as important that we maintain scheduled flying in our own right as well,” explained O’Connell at the time.
The ACMI operation now became the airlines main focus: “We see the ACMI market in Europe as a growing market and therefore we believe in the forward strategy of the company as being one which entails becoming a major ACMI carrier in Europe”.
In a further expansion of their Nordic operation it was announced on January 24, 2017 that CityJet had acquired Danish carrier Cimber. “Cimber was relatively similar to Blue1” O’Connell explained, “We acquired the company and they already had an existing relationship with SAS, so in purchasing Cimber we acquired the infrastructure to offer even more high quality ACMI capacity to SAS”.
The existing agreement between CityJet and SAS was subsequently extended from three to six years following the acquisition. The Irish carrier also announced the purchase of six Bombardier CRJ900 jets, with an option on four more, in a deal making them Bombardier’s largest European CRJ900 customer.
Talking about the aircraft order O’Connell said “We see the CRJ900 (and SSJ100) as aircraft that are perfect for the ACMI platforms for EU airlines and will continue to build our fleet around these aircraft going forward”.
ENTER THE RUSSIANS
In October 2015 CityJet shocked the aviation world by becoming the first European operator to order the Sukhoi Superjet 100 (SSJ100), intended to replace its ageing Avro RJ85 fleet which has an average age of 18 years. The first of these 98-seat aircraft, EI-FWA (c/n 95102) was handed over on May 24, 2016.
“We recognised the risks from the outset”, revealed O’Connell. “If you look at our delivery profile with the first three jets arriving in the second half of 2016 and the rest staggered during 2017/2018, we deliberately began using the SSJ100 in a relatively low utilisation environment, in that we allocated out first units to our ad-hoc charter market. There was a huge learning curve with the Superjet. It’s not an aircraft where we can go out and recruit trained crew because they don’t exist. So we had to plan the delivery of the aircraft slowly as we develop and train the crew”.
Superjet International, the makers of the SSJ100, were keen to showcase their aircraft in Europe through CityJet, in the hope that this may of translated in to orders from other carriers.
Indeed, since joining the fleet, CityJet’s SSJ100s have operated for Finnair during August and September 2016 on European routes from Helsinki and also bmi regional, with EI-FWB (c/n 95108) providing extra capacity from their Bristol hub during March 2017.
But the biggest boost for the Russian Jet was the two-year wet lease deal with Brussels Airlines, which commenced in April 2017. A total of four SSJ100s (EI-FWD/FWE/FWF/FWG) were operated on behalf of the Belgian flag carrier as the airline retired their remaining Avro RJ100 jets.
Speaking about the SSJ100 O’Connell said “The Superjet has given us a fantastic aircraft. Our passengers love it and the wet-lease airlines we place the aircraft with have also been very impressed. Right now we have the three aircraft with Brussels Airlines and its working really well”.
But the initial fan fare around the jet was short-lived. Fast forward to January 6, 2019 and Brussels Airlines terminated its contract with CityJet due to ongoing technical problems with the Irish carriers SSJs, mainly caused by a lack of spare parts affecting the aircraft’s maintenance schedule and resulting in aircraft being unavailable, sometimes for days at a time. The last flight operated by the Russian jet happened on Monday January 7, from Billund (Denmark) to Brussels. CityJet then replaced the SSJs with five Bombardier CRJ900s, leased from Spanish regional carrier Air Nostrum but this contract was also terminated in April 2020 due to the COVID-19 pandemic.
KLM and CityJet also extended their existing codeshare agreement, with the lease of two RJ85 aircraft from May 15, 2017. The agreement saw CityJet operating four of the eight daily services between London City and Amsterdam, as well as a number of other UK routes on behalf of KLM Cityhopper. This agreement ceased on October 28, 2018.
In February 2017 it appeared that CityJet’s long standing agreement with Air France had come to an end, following the announcement that the French carrier would take its Dublin to Paris (CDG) route back in house. However, a reprieve to their franchise was announced in May 2017. This agreement was subsequently cancelled by the French flag carrier when the coronavirus began to impact the industry.
After a number of years of contraction at London City Airport the airline officially withdrew its own scheduled passenger services on October 28, 2018. The only scheduled route the airline now operated from the facility was to Dublin on behalf of Aer Lingus. However, this too was cancelled in May 2020, after Aer Lingus chose to end its agreement due to the dramatic fall in passenger numbers on the route due to the coronavirus crisis.
In July 2018 at the Farnborough Air Show, it was announced that CityJet and Air Nostrum would merge “with the aim to bring about closer co-operation between the two airlines under the umbrella of a new holding company” as Pat Byrne explained. In January 2020 the proposal was finally given the green light by the European Commission (EC) to create Europe’s largest regional airline. The new airline group, would carry more than 6m passengers a year and have annual revenues of almost €700m, plus an array of wet-leasing contracts—providing aircraft, crew and services—to bigger European carriers such as Iberia and Air France.
However, the merger has since been put on hold and on April 27, 2020 it was announced that the High Court of Ireland had put the airline under ‘Examinership’ an Irish form of protection from creditors for up to 100 days.
CityJet has generated revenue of more than EUR220 million in each of the past three years. It was profitable in 2017, but made losses in 2018 and 2019. It has debts of EUR500 million and balance sheet liabilities exceeding its assets by EUR186 million.
The examinership means that CityJet now has 100 days to restructure its business and comeuppance with new arrangements with creditors to then be approved by the Irish court. Plans are to cut 1,000 staff from its workforce and cut its fleet from 32 down to 17 aircraft.
It is the carriers ongoing partnership with Scandinavian Airline System (SAS) that is now CityJet’s main hope for the future and the basis for the High Court’s agreement that CityJet has a reasonable prospect of survival.
For now the airline remains in a perilous situation. With the COVID-19 pandemic severely impacting the global aviation industry, it is likely that consolidation of airlines is likely to be accelerated. Therefore the proposed merger with Air Nostrum seems a viable option in the long-term survival of the carrier, something the management are keen to press ahead with.
(Parts of this article first appeared in the September 2017 edition of Airliner World)
© Jet Back In Time by Lee Cross.