ISTAT Jetrader - Autumn 2021 - 22

PERSPECTIVES
we grabbed. The first one was for
Dublin Aerospace when the former
Flybe maintenance facility in Exeter
in the U.K. came up for sale by the
administrators to the business. They
have about seven hangar bays for
turboprop and regional jet overhauls,
and we had been looking for some
time for opportunities to expand our
business outside of Ireland, so this
seemed like the ideal opportunity. It's in
the U.K., which is a separate currency
economy where a lot of our customers
live and where we have no natural
hedge, and there is no significant
maintenance presence in the U.K. for
the overhaul of the De Havilland Dash
8 or the ATR 72 turboprops. And also
with the Embraer ERJ 170/190 series,
we would have liked to get into that
aircraft, but not in Dublin, where we
focus just on the Airbus 320 and the
Boeing 737 families. So, we decided
we'd buy that, and then we took leases
on the hangars, and we built Exeter
Aerospace under the Dublin Aerospace
flag. Today, we have about 50 people
working there. We're quite excited
about the prospects of that business,
and we're particularly delighted with
the quality of the team we've hired.
There's a super pool of experienced
aviators in the Exeter region. That's
really the attraction for us more so
than the tools and the hangars and
everything else; you can acquire them
anywhere and move them, but if you
can get a group of the right people
together, that's the real key. Last
month, we turned our first profit there.
The other opportunity, of course,
was Emerald.
Jetrader: Tell us about Emerald
Airlines. How did it come about?
CM: Aer Lingus serves more gateways
out of Dublin than most major cities in
Europe. Pre-COVID-19, Dublin ranked
as the No. 6 transatlantic gateway
even though it's No. 17 in terms of
population size in Europe. And that's
growing all the time, especially with
Aer Lingus' acquisition of the Airbus
2 2 * THE OF F I C I AL PUBL I CAT I ON OF ISTAT
A321LR and A321XLR. They will now
be able to serve a lot of secondary U.S.
cities. They have a regional franchise
called Aer Lingus Regional that serves
a lot of the provincial cities in the U.K.
They get a phenomenal amount of
feed from those cities into their Dublin
hub. Those people fly here, they clear
U.S. Customs and Immigration here
in Dublin, and then the aircraft takes
off from Dublin and lands in North
America where passengers literally
just walk through as a domestic U.S.
passenger; they've already cleared
all the formalities in Ireland. That's a
particularly important strategic asset
for Aer Lingus. They announced last
year they were going to advertise the
franchise for 10 years, and they ran a
competition. About five entities went for
the franchise, and in May 2020, I pulled
an experienced team together, and we
put a business plan together for an
all-ATR 72 operation on that network.
We pitched to Aer Lingus, and we were
awarded the preferred bidder status.
In February 2021, we signed a binding
MOU for the franchise, and we're just
finalizing the legals this month. It's
been exciting. Interestingly, there's
about a 90% overlap of the Emerald
route network and the routes that we
operated from Aer Lingus Commuter
back in 1991. Talk about coming full
circle! Our first aircraft deliveries are
due in August, and our intention was to
start flying in 2022 with a full cut over
to the Aer Lingus franchise in January
2023. But recent events such as the
grounding and liquidation of Stobart
Air, the incumbent, means we may be
asked to " tog out " in our Aer Lingus
jerseys a little bit earlier, at least for
next summer, so that we can offer
those services.
Jetrader: Why did you choose the
ATR 72-600 for Emerald?
CM: It's the latest model of ATR 72, and
we've configured them all in a 72-seat
configuration, which is a very efficient
configuration. It's a single class, but it
allows for enough baggage capacity for
the transatlantic connecting passengers
I mentioned. It keeps things simple; it
keeps our inventory simple; it keeps our
crews all trained on the one type; and
the 600 is a super reliable machine. It's
got very good modern avionics; they
last a long time; they're very reliable;
the Pratt & Whitney 127 engine is an
absolute workhorse of an engine. It's
very well proven. On top of all of that,
with the green agenda being pretty
large, even throughout COVID-19, as a
green aircraft, it's quite an attractive
proposition, burning 40% less carbon
than the equivalent jets.
Jetrader: What are the unique
challenges/opportunities for a
regional/commuter airline?
CM: When you have a crisis like this
in aviation, and we've all seen how
COVID-19 has fast-forwarded the
contactless payment business, for
example. And there are many other
similar examples around the world of
things that were about to break through
but they hadn't yet reached that critical
point. Suddenly, with COVID-19, there
was no more messing. Now it's kind of
mandatory that you have contactless
payments. With the aviation business,
there's huge opportunities, for starters,
to make your journey contactless. You
can check in yourself, you can check
your own bag in, you can put your own
bag on the belt, you can get through
boarding and security without ever
having to exchange documents - so
that's all positive; it helps to make
aviation more seamless. As technology
improves, it'll help with things like facial
recognition, etc. It'll help people to get
processed much easier. But once you've
moved them away from the manual side
of things, that all gets a lot easier.
The other thing that it's enabled us
to do is, for the last 10 years, we've
seen a steady creep in costs and a
reduction in efficiency. We've seen
airlines find ways of charging the
customer more. In the U.S., there's
a classic example of the capacity
pinch where a lot of the majors were
ISTAT Jetrader - Autumn 2021

Table of Contents for the Digital Edition of ISTAT Jetrader - Autumn 2021
