Founded over 20 years ago in Germany, Avanti Air is a well-known player within the ACMI charter market. The airline has operated turboprop aircraft since its inception but has recently introduced a first jet aircraft.
Max Oldorf talked with Managing Director, Stefan Kissinger about the current state of the charter market, the history of the company and their new Fokker 100 jet.
While Avanti Air has been an ACMI operator specializing in turboprop aircraft for the last two decades, you recently introduced your first jet aircraft – a Fokker 100. As such, how do you think the European wet-lease market for turboprops will pan out in the longrun?
The European aviation market has become a very tough environment making it very difficult to operate smaller aircraft as they require higher airfares. As a result, in recent years, many regional routes have either been discontinued or the equipment used has had to be upgauged. But despite this, there are still some niche markets, for instance in Scandinavia or between islands, where turboprop aircraft will remain in demand in the future.
However, the overall outlook is not good. Reacting to this trend, we decided to acquire a jet in order to help establish a second pillar for our business. In total, it took around eight months from the idea’s conception to the Fokker 100‘s entry into revenue service.
Did you consider any other aircraft beside the Fokker 100?
Besides the Fokker 100, we also considered the Embraer E-Jet.
While on one hand it definitely offers better fuel efficiency and lower maintenance costs than the Fokker, on the other its capital costs are obviously much higher.
Since we only intend to use the jet for ad-hoc and charter services, we won’t likely reach the required utilization that would make a Embraer E-Jet a better option. We therefore decided to settle on the Fokker 100.
The keyword you mentioned there is “utilization”. When would an Embraer E-Jet make sense?
The Embraer would be a better option if we were to ply minimum of around 2,000 flight hours per year. However, in the market we are targetting, it’s not unusual to be inactive for periods of four to six weeks in a row, making it nearly impossible to attain those 2,000 flight hours.
Another advantage of the Fokker 100 is that maintenance provider Contact Air Technik, which specializes in this aircraft type, is located in Saarbrücken which is very close to our home base.
Did you consider the Boeing 737 or the Airbus A320 as potential options at all?
We actually considered them in the beginning but we soon realized that they wouldn’t be viable options. You see, the market is flooded with Eastern European carriers operating those types of aircraft at very low costs. We, as a German airline, are simply not be able to compete with East European carriers offering ACMI rates for a B737-800 at less than €2,000 ($2,200) per hour.
Avanti Air recently underwent rebranding. Is it important to invest in a corporate identity as an ACMI/charter airline?
While it isn’t absolutely necessary, it is certainly valuable. Our website really needed an overhaul and our corporate identity was no longer up-to-date. So, we decided that alongside the acquisition of our Fokker 100, we would also refresh our image and look.
What lead to the establishment of Avanti Air more than 20 years ago?
Well, Markus Baumann (Avanti Air’s second shareholder) and I originally worked as pilots before we decided to go independent.
We started off in 1994 with a share capital of just 50,000 Deutsche Marks with a business model that offered aircraft management to aircraft owners – the first ones to do so in Germany at the time. Though we started off with a single Piaggio Avanti and one Beech King Air, we soon expanded our business.
Our customers mainly used the aircraft for internal factory shuttles and a big advantage for them was that they could save fuel tax due to legal loopholes.
And soon you expanded operations with a first aircraft operating your own venture…
Our aircraft management model developed quite quickly back then. Before long, it had reached its peak where we were then taking care of up to ten aircraft including Learjets and Hawkers.
We subsequently began to operate our own aircraft. The first one was a Beechcraft 1900C followed by a Beechcraft 1900D both of which were used by Phillips and other companies. We financed the planes through a bank loan.
A very important contract was the one from Britannia Airways. Back in those days, they were just entering the German market and did not operate any fixed bases which led to excessive crew downtime. They then engaged us to operate crew shuttles with our Beechcraft 1900 fleet. To satisfy the increased demand, we introduced another Beechcraft 1900D. All in all, we sold around 1,200 flight hours per year through the Britannia contract.
Furthermore we relocated from Frankfurt to Siegerland Airport where we were offered a hangar. Today, it is still used for minor maintenance work.
The heydays of the Beech 1900s are long gone and you have now transitioned to ATR aircraft. How did that come about?
The best time for the Beechcraft 1900 was during a brief period post 9-11 when a lot of companies tried to avoid scheduled services by arranging private flights for their employees. Back then, we flew almost exclusively for Microsoft and they paid very well. However, when all the hype died down, the market for Beechcraft 1900Ds began to slowly disappear and so during the early 2000s, we began operations with ATR aircraft.
Our first ATR was sub-chartered out to DAT Danish Air Transport and flew freight between Rönne, Copenhagen, and Aalborg from 2002 to 2003. After that contract ended, the ATR sat idle for six months. We were considering selling it off when finally we got another sub-charter contract – this time from Meridiana for flights out of Lampedusa and Pantelleria. The contract was soon extended, and so we acquired a further two ATRs of which the second was used for cargo flights between Paris and Warsaw on behalf of FedEx before it entered into service in Southern Italy as well.
In 2008, we won another ACMI contract in Italy – with FlyOnAir from Pescara. With the resulting growth in demand, we therefore had to acquire a fourth ATR.
However, in 2012, things began to change and our ATR ACMI business that had proven so successful in the years before slowed down dramatically with the loss of the Meridiana and FlyOnAir contracts. While we were able to secure new deals with Air Berlin and Darwin Airline for brief periods, we were not longer able to make use of all the capacity we had available. So, after having sold our Beechcraft 1900 fleet in 2007/8, we then began to dispose of our ATR fleet.
But, as luck would have it, we actually discovered that we had a knack for aircraft trading and so we moved to acquire more ATRs in order to resell them.
Has Avanti Air ever considered venturing into the scheduled services market on its own?
No. We have never offered scheduled flights and currently, have no intention of doing so for the foreseeable future.
A lot of people think that we did venture into the market in the early 2000s when we offered flights out of our Siegerland base, but in actuality they were operated on behalf of Rheinland Air Service and were supported by local subsidies.
However, two years ago we did give the move some consideration when a tender for scheduled services from Pantelleria and Lampedusa was flighted. As I mentioned, we had operated those flights for several years on behalf of Meridiana and were therefore very experienced with their operation. In addition, the increased subsidies made them a very attractive proposition but in the end, the tender was awarded to Mistral Air
Would you ever consider venturing into the ACMI market abroad, for example, on another continent?
We could imagine operating abroad but we would only accept contracts where the security of our aircraft and crew are guaranteed. Some of our competitors operate in Libya, South Sudan and Pakistan and while we too should be able to obtain contracts there, we do not apply owing to safety concerns.
Thank you very much!