Dominican start-up Flycana plans to finalise its capitalisation and recertification processes by year-end, as it targets an operational start in early 2020 and a 32-strong jet fleet by 2025.
Chief executive Frederik Jacobsen says the airline has selected a US-based investment bank to place Flycana shares worth $80 million with both international and Dominican private and institutional investors.
"We will announce a lead investor soon," Jacobsen says. "Our capitalisation will be sufficient to stem the financial burden of quickly growing to a fleet size with a critical mass for a highly profitable ultra-low-cost business model."
Jacobsen was brought in earlier this year to oversee Flycana's launch after original chief William Shaw had been headhunted to lead Mexican carrier Interjet.
Flycana's new chief previously turned around Tampa Air Cargo before its sale to Avianca and was co-founder and chief of low-cost carrier Viva Air Colombia, now controlled by Irelandia.
He works alongside Flycana's founder, Dominican businessman Victor Pacheco, and former Wizz Air finance chief Mike Powell, who was responsible for raising the start-up capital for Argentina's first low-cost carrier Flybondi, of which he is still executive chairman.
"Flycana founder Victor Pacheco is bringing in his charter airline Dominican Wings into the new company, which means that the recertification process to become a scheduled carrier will be quick and easy," says Jacobsen.
In reference to the fleet, he notes: "We have to take a decision soon and of course we are evaluating all options. While Dominican Wings has already experience with the Airbus A320, the Boeing 737 Max 8 is certainly an attractive aircraft."
But he adds: "I also learned to appreciate the A320 as a power workhorse for low-cost operations with Viva Colombia... We might want to start with used and quickly available A319s to minimise trip and capital costs during the start-up period [and] later prioritise the fuel efficiency of the A320neo or even the range of the A321LR."
Flycana's core network will serve destinations in North, Central and South America, but Jacobsen describes the A321LR as "a game changer, which could eventually allow us to offer flights to Europe without assuming the risk of a dedicated fleet and the cost of a widebody operation".
Jacobsen hopes to be able to launch flights in the first quarter of 2020 with an initial fleet of three aircraft, receive five more by the end of that year, and grow the fleet to 32 aircraft by 2025.
Santo Domingo Las Americas International airport will be Flycana’s home base.
"Despite launching as an ultra-low-cost airline, we will offer a number of services such as allowing connections between our flights, effectively establishing a hub operation in Santo Domingo," says Jacobsen.
He notes "a lot of support" for Flycana from the airport and a government which "is really keen to help Flycana to become the Dominican Republic's national airline".
Flycana has identified a number of US destinations with sizeable Dominican communities which currently lack nonstop services, but which "represent a clear opportunity". While acknowledging that low-cost competition from Spirit and JetBlue will be tough, he says "75% of the US-Dominican Republic traffic continues to be transported by legacy carriers offering high fares, particularly on connecting tickets".
Jacobsen promises "fast connections" to "destinations in the Caribbean region and important cities throughout South America, including Brazil's northeast, where we see demand for new and better connections with the USA", Jacobsen says.
He targets "the lowest cost of any airline in the region", or a cost per available seat-kilometre (CASK) of less than $0.04. "We will achieve this by offering a reliable service with new aircraft and the leanest corporate structure in the region," he vows.
"We will be a technology-driven airline operating from an ideal location with typical trip lengths of three to five hours, which will reduce capital and maintenance costs because of low cycle numbers and high aircraft utilisation."