Cimber Sterling to withdraw 737s in strategic shake-up

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Danish carrier Cimber Sterling is to withdraw its Boeing 737 fleet, effectively ending its unsuccessful effort to build a new carrier to replace collapsed Sterling Airlines.

The carrier is to revert to domestic and regional services, as a result of its tie-up with Swedish regional operator Skyways, which will see the fleet simplified to two aircraft types.

Cimber Sterling adopted its brand name after an ambitious effort to take over some of the assets of Danish operator Sterling after its bankruptcy three years ago.

The airline introduced 737s and broadened its network, before undertaking an initial public offering.

But the timing of the IPO proved disastrous and the company has struggled to contain heavy losses, which have threatened Cimber Sterling's survival.

Its latest financial figures, for the second quarter of 2011-12, were "highly unsatisfactory" and the carrier is expecting much deeper full-year losses, up to DKr200 million ($35 million) - more than treble the previous estimate.

The performance "underlines a need that has existed for some time for adopting a new strategic direction", it said.

Under a new investor, Mansvell Enterprises, Cimber Sterling is to collaborate closely with Sweden's Skyways.

The route network will concentrate on domestic Danish and regional Scandinavian services, while the fleet will be simplified. Cimber's six 737s will be phased out over the next "couple of years", said the carrier, in favour of a single jet and single turboprop type.

"With a homogeneous fleet we will have the best platform for operating a sound and competitive regional airline," said chief executive Jan Palmer.

"By pooling our efforts with Skyways, we can achieve better purchasing agreements, plan better route structure and generally design a better and more comprehensive commercial platform."

He said Cimber will focus on profitable and strategically-important routes.

"We have already closed down several unprofitable routes to southern Europe, but we intend to remain on the leisure market with an increased number of international and domestic flights from selected provincial airports," he said.

"That will enable us to provide an important offering to the many customers outside Copenhagen, the capital region, and also achieve the best possible utilisation of our capacity."