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Aviation History
1987
1987 - 0592.PDF
Estimated 1987 turnover estimated profit 1987 employees pax carried 1987 (estimated) fleet on order capital shareholders Hispania N/A $5 million 265 800,000 3 x 737-200 2 x 737-300 3 x 737-300 $63-5 million internal 86 external 800 approx Air Europa $83 million $5-5 million 350 400,000 5 x 737-300 3 x 757 2 x 737-300 N/A 25% ILG 49% Banco de Bilbao 26% Banco de Vizcaya were planned to start for the winter 1987 season, but spring 1988 now looks more likely. Its domestic charter flights are regular enough almost to amount to scheduled services to the extent that some 20 per cent of passengers are business travellers. It would like to start a genuine scheduled domestic service eventually, but will have to co-operate with Iberia and go through the painstakingly slow process of getting Government approval. Hispania will stay small, Capt Irizar says. In ten years' time it will probably have a fleet of between six and eight aircraft. Its present line-up is three 737-200s and the two 737-300s which arrived last month. A third -300 is due for delivery next year, and a fourth and fifth in 1989. The aircraft are all on lease from Transavia, GPA, and Aer Lingus. Hispania fancies the proposed 100-seat model, the 737-1000. "We are seriously considering it. It is an aircraft that the market needs," says Capt Irizar. Air Europa Although it works on the same prin ciples of new aircraft and a high standard of service as Hispania, and is roughly the same size, fellow Majorcan Air Europa is an ambitious beast. Its offices in Palma Airport's new Terminal B still smell of paint, and are spacious compared with Hispania's dark converted flat in a resi dential block downtown, which spills over into the bar across the road. Air Europa started operations last November flying a 737-300 between London and the Canary Islands. "Everything is going according to plan. We planned to develop the company to five aircraft within one year and to ten aircraft in three years," says managing director Tomas Cano. Contracts have come from ILG's in- house tour operator Intasun, naturally, from the huge German tour companies Neckerman and Tui, and from Italian, Swiss, Spanish, Austrian, and Scan dinavian companies. The advantage of being based in the holiday destination is enormous. "A UK carrier has a potential market of 60 million passengers. We have a potential one of 300 million," Cano says. Turnover for the first full year to March 1988 should be ptas 10-5 billion ($83 million)—$5 • 5 million of it profit, exclud- opposite below, is subcharter operator ing the start-up cost of $2 • 3 million. Net profit for 1988/89 is expected to be $18 million. "It was a big help to use the colours and reputation of Air Europe," Cano says. The company's official name is Air Espana, but because of the reputation of Spanish charters in Europe the new outfit decided to latch on to Air Europe's image, he explains. The backing then looks more solid in the eyes of tour operators and passengers. ILG approached Cano with the idea of starting up a new airline last year, just after he had left his position as managing director of Hispania. Legally ILG could own only a quarter of the company, so two Spanish banks put up the rest of the capi tal. "It was not easy to find a bank partner. They are not really enthusiastic about airlines," Cano says. Eventually the Banco de Bilbao put up 49 per cent of the capital and another Basque finance house, Banco de Vizcaya, provided the remaining 26 per cent. ILG lent its experience and Air Europe 26 FLIGHT INTERNATIONAL, 30 May 1987
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