CityJet proceeds with ‘clean balance sheet’

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Irish regional carrier CityJet has restarted with a “clean balance sheet” after its sale by Air France to German turnaround special Intro Aviation, says the chairman of Baron Financial Services, which facilitated the takeover.

Eric Kohn also reveals that Air France was “kind enough” to sign a wet-lease agreement with CityJet for the continuation of a number of regional routes from the mainline carrier’s hub at Paris Charles de Gaulle airport. That deal will expire in October 2017.

The transaction in which Nuemburg-based Intro acquired CityJet was completed on 30 April after nearly two years of negotiations.

Citing filings with Ireland’s Companies Registration Office, the Irish Independent has reported that CityJet received €41 million ($57 million) from an Air France finance unit last December – when Intro submitted its takeover offer – and another €22 million in April.

Kohn did not deny the two payments during a CityJet media briefing in London on 1 May. But he says the two transactions disclosed under statutory regulations did “not necessarily” reflect cash payments.

Without incurring any debt, CityJet and its Belgian subsidiary VLM Airlines were able to take with them their respective BAE Systems Avro RJ85 regional jet and Fokker 50 turboprops fleets. While about half of CityJets 19 Avros are owned by the group, VLM owns all 12 Fokker 50s.

A source at French pilot union SNPL told Flightglobal in March that Air France would transfer the airline to Intro without any debt and thus help Intro to newly set up CityJet on a “blank sheet”.

While the deal’s financial details have not been revealed, Air France booked a €122 million loss associated with the sale.

But Intro founder and chairman Hans Rudolf Wohrl has indicated that his patience was tested by the negotiations with Air France. He left the discussions to younger colleagues, and says: “I am sure I would have stepped out of the door and said [to Air France] ‘Keep your airline’.”