Published on September 6th, 2015 | by Jim Lee0
Rebranding at CityJet completes a range of changes at the airline
On 4th September, the Minister for Transport, Tourism and Sport, Paschal Donohoe, officially unveiled CityJet’s new brand, at a low key event held in CityJet’s Dublin Airport hangar. Speaking at the event the Minister said: “I am delighted to learn of the investment by CityJet in jobs in Ireland and air routes that play such a valuable and important role in helping business thrive and our tourism industry reach record levels. The launch of the Cork route in a few weeks will be a major boost to Cork and the south west. I wish the airline, its management and dedicated staff well as it embarks on a new period which offers significant potential.”
The Minister’s reference to new jobs, followed confirmation that the airline will open a new call centre in Dublin, initially creating 15 jobs, with effect from March next year. Since becoming independent of Air France ownership in 2014, CityJet has developed significantly in the market and now employs almost 500 staff, with over 300 based at its headquarters in Swords, Co. Dublin, and at additional crew bases in London and Paris. In the past three months it has hired almost 60 additional staff, including 24 new pilots and 30 cabin crew and four executive officers. The new branding represents a further step forward as an independent airline, following CityJet’s acquisition by the holding group INTRO Aviation, which was officially completed on 30th April 2014. It comes at an exciting time of change for CityJet and follows significant restructuring and management changes.
At the event, the new branding was unveiled on Avro RJ85, EI-RJT, an aircraft that is just over 15.6 years old, having first flown on 10th February 2000. The aircraft was delivered on 1st March of 2000 to Mesaba Airlines, (who operated Northwest Airlines’ regional airline service as Northwest Airlink), as N532XJ. Following withdrawal from service, the aircraft was put in storage in September 2006. After the retirement of the Avro RJ85 fleet and beginning in July, 2009, the Northwest Airlink trade name too was phased out. All 23 of the ex-Mesaba aircraft were acquired by CityJet from BAE Systems and US-based financial underwriters and securitisation specialist MBIA, in an investment that the airline valued at the time at $221 million (around €198.2 million). N532XJ arrived in Norwich on delivery on 16th September 2006. It was registered as EI-RJT on 21st April 2007. It entered a period of storage, being withdrawn from use on 28th May 2012, and was ferried to Norwich on 8th October 2013, where it remained in storage until returned to service on 10th June 2014. It was selected for the rebranding and entered Eirtech’s Hanger 3 at Dublin Airport for repainting but unfortunately there was a fire in the hangar on the morning of 26th August. Although the fire put the hangar out of commission and the aircraft was in the hanger at the time, no damage or injuries were reported. As a consequence, the aircraft departed to Rome-FCO as the BCY043P at 15:04 on 28th August, for completion of the repainting. It returned just in time for the launch as BCY061P at 02:46 on the morning of the 4th September. The new logo retains the diagonal CityJet titles, but changes the font and colours, while there is a new wavy cheat line in tan and sand along the fuselage.
On 25th February, CityJet announced that its chief executive Christine Ourmieres-Widener was leaving the airline “with immediate effect”. She had been CEO since 2010, when she was appointed to run the airline by then owner Air France-KLM. She had previously worked directly with Air France-KLM and she and deputy chief executive and chief financial officer Michael Collins, each took a 7.5% stake in CityJet, as part of the takeover of the airline by Intro Aviation. Her departure came just a few months after Mr. Collins also suddenly resigned. There was no comment on the reasons for the resignations, at the time, by the airline and it was also unclear whether the two former executives, would retain their shareholdings in the airline. In its statement the airline merely noted that her tenure “sees the organisation positively reshaped, with strong shareholders, improved financial position with a new board and management team in place”.
Earlier that month, it was confirmed that airline’s founder Pat Byrne, had replaced Mr. Peter Oncken as chairman, although Mr Oncken remains on the board. Having founded the airline in 1993, Mr. Byrne was chief executive for seven years until CityJet was sold to Air France. He remained as chairman after the Air France takeover, and was still chairman when CEO Geoffrey O’Byrne-White resigned at the end of August 2010. He took over as interim CEO pending the appointment of Ms. Ourmieres-Widener. In a comment he said he was “delighted to return CityJet at the most exciting time in its development,” while Mr Oncken said it had been “a great pleasure to chair the board of CityJet the last nine months,” adding the restructuring after the separation was, “on track and the recent refinancing deal signed before Christmas put the airline in a unique position to take advantage of new opportunities in the regional market.” Mr. Jeremy Barnes, CEO of Falko Regional Aircraft, formerly BAE Systems Asset Management based in Hatfield. also joined the board as part of that restructuring, further details of which are given below. More recently on 20th August, CityJet’s Head of Marketing and Communications, Martina McDermott Hurley, was appointed to the board. She joined the airline last November, having previously worked as head of strategy and planning at Bank of Ireland. She has also held senior management positions in Eircom and Publicis D Healthcare.
On 27th March, CityJet, announced two other significant changes to its commercial management structure, with the appointment of Cathal O’Connell as Commercial Director and Patrick Lukan as VP-Sales & Distribution. Mr Lukan, who held the position of Chief Commercial Officer from May 2014, will in his new role oversee CityJet’s sales and distribution activities from the airline’s new London offices, re-establishing an on-the-ground presence for the airline in the UK. Cathal O’Connell joined CityJet with 35 years’ experience in the Irish and UK aviation industry, including roles with Aer Lingus, Aer Arann/Stobart Air and Eastern Airways and more recently as Chief Executive of bmi regional. As CEO of bmi regional, he oversaw the airline’s transition from a subsidiary of the bmi Group, into a fully independent regional airline and established it as a leading operator in the UK and European markets.
A significant part of this restructuring was announced on 14th January, when CityJet confirmed that it had completed, ‘a sale and leaseback agreement’ for seven Avro RJ85 aircraft. The sale and leaseback package involved its main lessor, Falko Regional Aircraft Limited. Falko was formed in July 2011 when funds managed by Fortress Investment Group completed the purchase of BAE Systems Asset Management and its associated aircraft portfolio. Fortress Investment Group currently has over $60 billion (around €53.8 billion) of funds under management. This refinancing programme was designed to place the airline in a strong position to fund its restructuring and its growth strategy, which it said at the time, was progressing ahead of schedule. It also stated that it continued to experience improving trading conditions. This ongoing restructuring was necessary due to its legacy of having been part of the Air France Group, which it said, “left it with an infrastructure which was inappropriate for an independent regional carrier”.
The restructuring programme, which commenced the previous autumn, was designed to deliver a sustainable and competitive cost base and corporate infrastructure. It included 30 voluntary redundancies, with the aim of reducing its cost base by between €1 million and €1.25 million. The management team is now fully focused on delivering on a business plan to further develop the airline from a solid financial position and operating base.
Looking to the future
With the changes already made, CityJet can now embark on plans for future expansion, investment and job creation. Speaking at the rebranding event, Executive Chairman Pat Byrne noted that this was a special day as “we bring CityJet forward with a new dynamic branding, which I would refer to as inside-out branding as it based hugely on what our staff across the airline determined it should be.” “We are also at an advanced stage in investment in our fleet and hope to be in a position to make an announcement in the coming weeks. “It’s very close,” he said. “We have been in negotiations with competing manufacturers for the last few months, it’s been a very intense competition and it’s now a matter of weeks” he added. Mr Byrne said the airline plans to acquire 15 new aircraft to replace its existing 90-seater Avro RJ85s and predicted that the cost of them would run to more than $300 million (around €270 million). Falko will purchase the new aircraft and lease them to the airline. The partnership means that neither the carrier nor its parent, INTRO Aviation, will have to fund the purchase directly. However this works out at only around €18 million per aircraft barely enough to fund second hand Embraer 190 aircraft or perhaps cut price Sukhoi SSJ 100-95s. In a previous comment by the founder of parent INTRO Aviation, Hans Rudolf Wöhrl he noted that the Embraer aircraft were considered too “old”, the SSJ 100-95s had not proven themselves capable of London City operations, while Bombardier’s C-Series had yet to even enter commercial service (and were presumably the more expensive option). Given Mr, Byrne’s comments and the fact that in 2014 Falko apparently signed letters of intent for up to 24 Bombardier C-Series, the CS100 model which was mentioned at the time could come back into play although it must be stressed that no firm order has been signed.
He went on: “We will carry over two million passengers this year on our own scheduled services network, on our wet lease programme for Air France and on our charter services. We are seeing continual growth across our network as awareness of CityJet increases. CityJet is a pan-European airline, with over 70% of our passengers travelling between London and mainland Europe. Our flagship Dublin to London City route has seen a 40% growth in the last six months whilst advance bookings for our new Cork to London City service, which commences on 1st October, are strong. We look forward to introducing CityJet – and the ease of travel through London City Airport – to business and leisure passengers in Munster in a few weeks’ time.”
According to Mr Byrne CityJet also plans to step up its wet leasing business. Ultimately, its business would be 60% wet leasing and 40% on its own routes. The company is close to agreement with a number of major European carriers to provide these services, he said. It already wet leases aircraft to its former parent, Air France.
“The opening of our new call centre in Swords will provide our customers with an enhanced service offering. We are also concurrently investing in developing our technology and customer loyalty services to ensure CityJet continues to provide excellent facilities to all customers and in the coming months it will roll out its new brand and livery on all its aircraft. It will shortly also unveil its new aircrew and ground staff uniforms. The carrier is also launching new on board catering as part of an overall upgrading of its product” he concluded.