Andrew Doyle/NUREMBERG
Eurowings is reining in capacity to bolster its bottom line ahead of an initial public offering (IPO),aimed at helping finance a $1 billion fleet renewal. The carrier could order up to 40 new regional jets before the end of the year.
Dortmund-based Eurowings is to replace most of its 27 ATR 42 and 72 turboprops and its 10 British Aerospace 146s. It wants to take delivery of up to 40 new 50/100-seat regional jets from 2002 and is evaluating Fairchild Aerospace's 728JET family, Embraer's RJ-145 and RJ-170/190 and BAe's proposed RJ-X range.
The Bombardier Canadair Regional Jet is also a candidate for the 50-seat segment of the order, expected to be decided first and to involve around 15 aircraft. The 70- and 90/100-seat requirements are for 15 and 10 aircraft, respectively.
The airline could finalise a deal this year, but says it needs a partial flotation by 2002 to finance the acquisition because it will not be able to raise enough cash privately. The carrier is one of seven BAe 146/Avro RJ operators to have been offered the re-engined RJ-X, as BAe aims to secure commitments for a September launch.
Eurowings will retain 10 of the latest ATR 42-500 variant, of which five have been delivered. Its four Airbus A319s - which will grow to seven by 2002 - will be kept for charters.
The German regional's net profits fell by more than 40% to DM5 million ($2.66 million) last year because of soft demand for its 24% extra capacity, coupled with a DM3.5 million exceptional charge relating to the installation of satellite navigation systems in its BAe 146s. It forecasts a net profit of over DM13 million for this year.
"We are going to stop the strong growth to improve the results and get the right balance for an IPO," says Eurowings chief executive Richard Santner. Chairman Albrecht Knauf owns 94% of the Eurowings Group and is likely to retain a majority stake. The airline is a member of the Wings Alliance, but it remains unclear whether partners KLM and Alitalia would buy shares.
Source: Flight International
