CityJet to make Avro replacement decision by year-end

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CityJet will make a decision on the renewal of its BAE Systems Avro RJ85 regional jet fleet this year as it plans to retire the type by the end of 2016, but finding a replacement for the Fokker 50 turboprops flown by its Belgian subsidiary VLM Airlines will be more difficult, says the carrier.

The Irish regional airline has just been sold by Air France-KLM to German turnaround specialist Intro Aviation. The transaction was completed on 30 April, leaving the carrier in a “unique” position to restart its business as an independent operator without any debts, chief executive Christine Ourmieres said during a media briefing in London on 1 May.

The 95-seat Avros need to be replaced because their fuel consumption and maintenance expenses are “far beyond” any sustainable cost level, says Intro partner and chief executive Peter Oncken.

Engine maintenance costs, in particular, will significantly increase when the current power-by-the-hour agreement with Honeywell expires in 2017. As the manufacturer is to discontinue its flight hour-based service programme, operators will have to switch to time-and-materials contracts. This would be too costly for continued operation of the Avros, says Oncken.

However, the choice between alternative, similarly sized aircraft that fulfil the steep-approach and stringent noise requirements at London City airport is “effectively limited” to the Airbus A318 and Embraer 190, he says.

Oncken discounts the Bombardier CSeries as a candidate, saying “nobody knows” when it will enter service. However, the greater obstacle is that CityJet is unlikely to be in position to finance new aircraft.

Sukhoi’s Superjet 100 could be an alternative, says Intro founder and chairman Hans Rudolf Wohrl. He praises Russian aircraft engineering, saying the type combines the nation’s legacy for leading-edge aerodynamics with Western co-produced components and engines. This could make the regional jet a “really attractive” option if Sukhoi makes a competitive offer, Wohrl says.

But while a potential order for new aircraft is not yet off the table, Oncken says CityJet will more likely employ used equipment to replace the Avros. Without large investors or external partners, banks will not give a medium-sized company such as Intro low-interest credit to finance a new aircraft fleet, creating excessive capital costs, he says.

As aircraft leasing is no long-term solution for regional carriers, Oncken says used aircraft will likely be chosen. A decision will be made in 2014, with the fleet roll-over due to follow by the end of 2016, he says.

CityJet plans to operate 17 Avros this year and not to reduce the fleet size until phase-out. About half of the aircraft are owned by the airline. But the airline is set to grow in future, says Oncken, with the successor fleet to comprise “around 20” aircraft.

Dublin-based CityJet has 19 Avros while VLM operates 12 Fokker 50s, Flightglobal’s Ascend Online database shows.

Finding replacement for the ageing turboprops will be a challenge, however. VLM wants to exploit as far as possible the remaining service life of the aircraft, because there is “not really a replacement” for the legacy type, says VLM managing director Arthur White. “If you cannot make money with Fokker 50s, it is not possible with anything else,” he says.

While the ATR 42 has a similar capacity to the Fokker 50, using the former “doesn’t make any sense” because of its higher capital costs, says Wohrl. The ATR 72 offers “nearly” as good economics as the Fokker 50, but its capacity could not be fully utilised because it cannot operate from London City with more than 45 passengers, adds Wohrl.

Keeping the cabin interior of the Fokker 50 up to date and avoiding excessive MRO costs is a challenge. This will ultimately determine the type’s retirement. White says VLM is renegotiating its power-by-the-hour engine maintenance agreement and has also reduced the number of cabin crew from two to one flight attendant to compensate for the growing MRO costs. But he adds that there the type will not be retired soon as there is “nothing on the horizon to replace the aircraft”.