City Jet sell-off?

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  • Anonymous
    Guest

    MarcusUK
    Participant

    AF/KLM have a “2015” Master plan, which is currently being implemented to reduce costs, maximise income, and return to profit by 2015.

    http://www.euronews.com/business-newswires/2047752-air-france-mulls-cityjet-sale-to-german-investor-partner-says/

    Cityjet, which runs flights mainly from LCY & Dublin, is Not part of those plans, so clearly a plan to dispose of its loss making impact on the main group.

    KLM is in fact returning profit at this time, but it appears AF drags it down.

    Decisions were to be made by Feb, then May, but it could be close to one now. Various Internet searches indicate this, and AF/KLM have No plans to keep Cityjet.

    What will KLM do with the busy LCY – AMS, or AF’s LCY – Orly flights?
    I hope they take them back and run them with their own crews & fleet. Recently Cityjet have been going downhill, ageing aircraft and not very clean inside, it appears from the weekly flights i make.
    I would prefer KLM’s Embraer 190 fleet / KLM City Hopper to take it over

    What will happen to the slots at LCY if CityJet come out of Skyteam, but continue to function as a different Airline, or will AF / KLM take some of the routes to their hubs back? The traffic in and out is an important feed into Schiphol for KLM for eg…

    Any Info or thoughts on this BT readers?


    AMcWhirter
    Participant

    Hello Marcus

    It would make sense for KLM to take over the LCY flights. It used to operate these itself with F27s in years past. But I wonder if KLM has the capacity to do the job ? KLM runs a tight ship.

    Unsure of LCY-ORY. But this service provides a good alternative to Eurostar for those passengers wishing to arrive in a different area of Paris. So it would be a pity were it to be axed.

    Not sure how far north of London you reside but note that Darwin will be flying from Cambridge next September. The intention is for Darwin to interline with KLM so that passengers can through check to destinations beyond Schiphol.

    http://www.businesstraveller.com/news/four-new-european-routes-at-cambridge-airport


    dutchyankee
    Participant

    As a resident of Antwerp and across the border into The Netherlands, there has been news of late that the old `VLM` could be resurrected as CityJet itself might be broken up once sold by AF/KL Group. It was a sad day in Antwerp when VLM was sold as it was a very popular home grown business. Sentiment aside, I wonder if this would be a possible outcome as well.


    MarcusUK
    Participant

    Hi Alex. Thanks for your interesting comments.
    I am in an outer North London Borough, so LCY or LHR STN are better for me.
    I did look at these Cambridge flights but they were very expensive adding on all the extras.

    It seems a confusing arrangement of AF with Cityjet, saying they are Partners, yet they own them and want to sell them off. They do lose money, dragging the AF/KLM Company down, when their planes are pretty full.

    I hope KLM preserve the route and put on their own Embraers, many leisure and business people fly on from Schiphol on this feeder route. KLM used to fly the Fokker 50’s, and you could use VLM.
    So i wonder what the strategy is with KLm on this route, and if Cityjet are bought out, will the investor merely remove and asset strip the Company from LCY?
    They have the largest amount of slots…
    Any way of asking KLM /AF?

    However, Cityjet they have got run down recently, poorly cleaned, dirty windows always inside, dry un-appealing food despite changing caterers twice.

    KLM have flights London -Amsterdam from £99 return ( made a trip on the Embraer 190 from LHR today with them), and Cityjet LCY from £99.
    But no bag or FF credits anymore at the base price of City Basic, unless you go to Value fare which used to be the base fare of over £140.
    This has just changed, so AF Cityjet basically have 4 levels of fare now.

    I see little point in paying £40 more for 1/4 of the Miles for Flying Blue, So with LHR offering premium check in, fast track security, Skyteam Lounge (superb), and all the other priority Boarding and baggage perks, I am choosing LHR/KLM.

    So City Jet have got worse in standards, no perks at LCY at all, and are charging much more. I have no problems seeing them leave, but wonder what the strategy is in 2015 Plan of KLM / AF?

    Unsure if KLM would fly out of the UK to another country other than NL. But the market would be wide open for all their routes that are profitable, such as Rotterdam, Antwerp and Edinburgh, to name a few.

    A decision seems imminent, though this is late being settled…


    AMcWhirter
    Participant

    Hello Marcus

    I would say that AF/KL would not provide a meaningful answer. It’s too commercially sensitive. Yes, BA will continue to ply the LCY-AMS route but of course pax lose the advantage of keenly priced through fares onto the KLM network.

    But it would be logical for KLM to retain a presence on the route even if only a 4 flights a day service timed for connections over Schiphol.

    With AF cutting yet more staff I am sure the airline doesn’t have a plan yet for 2014, let alone 2015.

    http://uk.reuters.com/article/2013/07/30/uk-airfrance-jobs-idUKBRE96T0VQ20130730

    Interesting how EK is expanding at AMS. It was believed that it would be difficult for any airline to sell F class in the Dutch market seeing as KLM itself (who controls the bulk of the market) does not offer a similar product.

    But EK has defied critics and seemingly has found a ready demand for F class. Maybe its A380 has helped ? Or maybe EK is doing some clever marketing ?


    MarcusUK
    Participant

    Indeed Alex.

    Interesting also that Etihad also now has a partnership with AF / KLM in almost direct competition with EK, and their taking PAX onwards to Asia and Australasia. But they are “Alligned” with Skyteam, but I do not see the close match of the FFP’s yet.
    Also, the strategy of Etihad to economically invest take stakes in other Airlines, then influence them for their own strategies. Emirates merely bursts in, with large new Aircraft, and undercuts existing Airlines on their routes, with no partnerships or investment in others. they have done this to every major city in Europe almost!

    I am sure this will affect the Middle East routes as well as further on, for other Airlines from Schiphol.

    Still, to the subject, I certainly hope that with Cityjet leaving the AF/KLM group, and presumably Skyteam, that KLM will retain some flights into LCY. They have ordered new Embraers i see also, now KLM Cityhopper, only retaining a few Fokker 70’s to replace, then the entire fleet will be only new Embraer 190’s. Interesting. 100 seats a time, and much better economy, with less fuel, so part of the reducing costs side of the 2015 strategy.

    I am sure some of these, could ply the LCY -AMS route, and keep the KLM staff busy with an established route. I doubt AF itself would run their aircraft into AMS from LCY, even though it would keep some of their staff with jobs!

    They surely must have an idea of what they will do when CityJet is disposed of on this route?


    AMcWhirter
    Participant

    Good morning, Marcus.

    Ever since KLM was founded in 1919 it’s been one of the world’s smartest airlines. So it surely has a plan for if or when CityJet ceases plying LCY-AMS.

    As you know, KLM cannot survive without 6th freedom traffic so it’s in KLM’s interest to operate feeder flights. KLM is famed for taking on routes which others neglect … you need only look at the KLM route map to see how many interesting airports it serves in the UK and Scandinavia.

    The Embraers can use LCY (but technical modifications may have to be carried out on KLM’s models because of LCY’s steep approach path) and so can the F70.

    I remember years ago taking one of AF’s F70s (it was actually operated by a regional subsidiary) out of LCY into CDG. Also Austrian used to operate the same plane for its short-lived LCY-VIE service.

    As for Etihad, yes it is interesting how it has invested in JAT to use Belgrade as a springboard into Europe. It’s rather like the situation where Korean Air has invested in Czech Airlines.

    I read today that Gulf aviation showed the world’s best growth in the month of June.

    http://www.arabianbusiness.com/gulf-airlines-post-12-1-passenger-growth-in-june-512175.html


    connorJohnson
    Participant

    i like ba to buy city jet’s routes, they could buy more A318 to fly to other places in america for example Washington, Chicago etc.what do you think?


    Shearer
    Participant

    There’s no reason why CityJet could not continue acting as a codeshare partner to AF/KL is there?

    (Notwithstanding ambitions of new owners who may take them in a different direction.)

    I thought AF had agreed to sell CityJet to a German company?


    MarcusUK
    Participant

    Air France remains in negotiations with “a German Trun Around specialist”, as the link in my opening post indicates. but they have been trying to sell Cityjet and “pending” announcements most of this year.
    recently crews on Cityjet told me they were supposed to finalise it and they would be informed in May, which did not happen.

    The 2015 transform strategy of KLM / AF does Not include Cityjet, this is why AF is trying to sell them off. then they would have no control over them. I doubt if AF would do this and then still retain their link with Skyteam, so doubtful they would be aligned anymore.

    That is if, the new owners do not simply sell the slots at LCY, and the planes, or re-locate the planes, as it losing a lot of money currently.

    I wonder if AF/KLM still owns any slots? if so, they may not travel with the sale of the Airline?
    In which case, KLM and AF can do as they wish at LCY.


    MarcusUK
    Participant

    Seems that Cityjet is to be sold off, with dates for October set now?

    How each route will be going forwards, who knows as it seems unclear.

    “27JUN2013: Cityjet to terminate Air France franchise agreement from October
    Cityjet (WX, Dublin Int’l) will cancel its franchise agreement from a final date in October 2013 yet to be established and will then operate all of its flights currently operated under Air France (AF, Paris CDG) flight numbers on a franchise basis under its own commercial responsibility using its WX code. This is one of the steps required to make Cityjet available for a potential sale by Air France-KLM to a third party, expected to be Germany’s Intro Aviation. This will include flights from London City to Amsterdam, Antwerp, Avignon, Brest Guipavas, Brive-la-Gaillarde Vallée de la Dordogne, Deauville, Dresden, Dublin Int’l, Dundee, Edinburgh, Florence Peretola, Luxembourg, Münster/Osnabrück, Nantes, Nuremberg, Paderborn/Lippstadt, Pau, Paris Orly, Rotterdam and Toulon as well as from Amsterdam to Brive and Perpignan and from Dublin to Brest. The routes from Paris Orly to Nantes and from Paris CDG to Dublin, Edinburgh, Florence, Newcastle, Turin and Zagreb currently operated on a wet-lease basis for Air France are not affected, although it is widely expected they will be transferred to one of the HOP! (A5, Paris Orly) subsidiaries.”

    http://www.ch-aviation.ch/portal/airline.php?cha=WX


    MarcusUK
    Participant

    It seems the sell off could be close to completion.

    http://www.independent.ie/business/world/air-france-set-to-sell-irishbased-cityjet-to-german-firm-29329156.html

    But still no news on whether CJ will be run as it is, with the same routes and aircraft. I wonder how much a slot is worth at LCY, to count those as assets to repair the losses?

    I cannot see how it could be, making such a loss, when the service is so poor, and cutbacks have been made.
    Better if the slots and routes were given to other Airlines, and KLM took the AMS route back at least.


    AMcWhirter
    Participant

    Just thought we’d update you with developments at City Jet.

    The carrier will withdraw from the LCY to Edinburgh route from the end of October. City Jet’s CEO says that LCY to Dundee and Edinburgh to Paris CDG will continue.

    http://www.businesstraveller.com/news/cityjet-to-close-lcy-to-edinburgh-route


    MarcusUK
    Participant

    Thanks Alex.

    I read this a few moment ago.
    I am sure many other routes will go, or slots be transferred back to AF / KLM (i hope!)

    Be interesting to see what the plans are for the Airlines in all it’s elements of assets, routes, slots aircraft, when they get sold.

    Losing £ 8.1Mil. last year, it clearly cannot run the way it is now without major changes, and further cuts, ( which i think have been made already to the maximum).

    Keep us posted!

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