Irish City Jet and Spanish Air Nostrum join forces and when merged under a holding company it will emerge as the largest regional airline in Europe.
The consolidation of airlines in Europe is going forward
With the news on July 17th about City Jet and Air Nostrum to merge, it is a clear sign on size matters for airlines. Also, it is worth noticing that same type of airline gets attracted to each other, in the case of City Jet and Air Nostrum, both airlines are specialists in the wet-lease market.
In February Ryanair in a surprise move, bought 24.9 percent of Vienna based low-cost carrier Laudamotion, with option to increase its stake to 75 percent. Ryanair’s Michael O’Leary has stated he is prepared to invest in failing airlines as high oil price and pressure on airfares will take its toll.
Qatar Airways bought 49 percent of Sardinia based Meridiana in 2017 and quickly renamed it Air Italy. Already this airline has a fleet of 14 aircrafts, nine Boeing 737’s, two Airbus A330 and three Boeing 767s, though the 767’s are due to be retired soon. 20 Boeing 737 Max’s will be added to the fleet by the next three years, the fist Boeing 787 will be delivered in 2019 and by 2022 Air Italy will operate 50 short, medium and long-haul aircrafts. The owner Qatar Airways will have an airline where it can reposition used and brand-new aircrafts to Air Italy’s base in Milan. It is not unlikely Air Italy will challenge Italy’s ailing national carrier Alitalia.
French Aigle-Azur teamed up in 2017 with Brazilian low-cost carrier Azul Airlines, who also owns the majority of TAP Portugal, the CEO of Azul, David Neeleman has a good track record of building airlines, he started-up U.S based low-cost carrier Jet Blue.
What is the upside of the City Jet and Air Nostrum merger
It will create the largest regional airline in Europe with more than 100 aircrafts of various types, 2700 employees and an annual revenue of Euro 700 million. By combining its forces under a new holding company, the new company will be an even more attractive partner in the wet-lease market than today where City Jet flies for SAS and Air Nostrum operates for Iberia and SAS among others.
Pat Byrne, CEO of City Jet said: “By coming together, we believe we will be in a position to respond to the specific needs of customer airlines through our flexibility in the provision of safe, dependable and quality assured operations. Our respective proven capacity and asset management expertise in acquiring aircraft for new wet lease contracts is also a significant benefit we can provide our airline customers.