AVIATION: A new Irish airline has reached a ground-breaking partnership deal with the Russian state airline, Aeroflot, which will open up new European airports for Irish travellers.
Skynet, the first indigenous Irish airline since Cityjet was formed in 1993, is based at Shannon, Co Clare, and will begin a direct service to Amsterdam early next month. With the millionaire Irish-American, Tom Kane, owner of the Adare Manor Hotel in Co Limerick, as a major shareholder, the airline is taking three-year leases on three Boeing 737s and so far employs a staff of 65.
New services connecting Shannon and Dublin with Warsaw and Vienna will follow, all of which will operate on the new code-sharing agreement with Aeroflot, meaning that tickets and flight numbers will be interchangeable and ongoing connections to Moscow and other international destinations co-ordinated. Skynet's chief executive, former Aer Rianta consultant Mr Dick Healy, is bullish about the potential. "We would see ourselves in profit within a year."
At the moment the company is "haemorrhaging" €150,000 a month. "You have all the costs without any of the income." He says Dublin will become part of the network when the second and the third aircraft are leased in late October. In 2003 he expects to lease a further two and within three years, to have 20 aircraft.
A call centre, with Aeroflot as a possible partner, is also planned at Skynet's new offices in the Shannon Free Zone industrial estate. Skynet is a unique project, Mr Healy says. "As a start-up carrier, we are going in with an already established major airline as a partner.
"That is a cushion for us and our whole route structure will be built around working with Aeroflot around Europe and into Moscow." So far, $7 million (€7.55 million) has been invested in the project. The investors include two of the company directors; Carl Phorfziemer, a US citizen, and Paul Williamson, a US-based Irish businessman.
"The concept had developed here because of the local business interest so it was natural that it would be a Shannon base," said Mr Healy. Apart from the sort of deep pockets needed at the best of times, Skynet has also had to deal with a downturn in the global aviation industry. Mr Healy left Aer Rianta on September 30th last year, three weeks after the terrorist attacks on the US, to take over Skynet the next day.
"The downturn can work to your advantage in that the cost of leasing aircraft has come down substantially since September 11th. You have benefits there for a few years while we get started," he says. The airline has also benefited from the availability of trained staff. Mr Healy says two-thirds of his 24 cabin crew are ex Aer Lingus. His ground operations director, Mr Michael Minogue, is ex Transaer and his technical director, Noel Madigan, and chief pilot, Frank Kennedy, are also ex Aer Lingus. Their cabin crew manager, Jennifer Rayner, who worked for British Airways, designed the cabin crew uniform.
"Each of the departmental heads have also, in the past, been part of start up programmes for new carriers so they bring a wealth of experience." The company will be offering a business and economy class service, with a special inauguration price of €220, plus taxes. The business class fare will be €899 with a day return for €599.
Mr Healy began his career in Aer Lingus, joining the company in Shannon in 1958 and is "steeped in aviation". He also worked for TWA, setting up their Dublin office in 1973, and returned to Shannon to work for Northwest Airlines in 1979, staying with them for 10 years.
Aeroflot, which is 51 per cent state-owned, has been quietly shedding its shabby Soviet image since it was taken over by new management four years ago. It hired the consulting company, McKinsey & Co, in an advisory role, turned a profit for the first time in 2000 and, this year, hired the British brand consultancy, Identica, to take a fresh look at its image and hammer and sickle logo. On March 29th Aeroflot banned smoking on flights.
Mr Healy, who has worked with the airline through their 20-year use of Shannon as a refuelling stop on transatlantic routes, has worked up a close relationship with its management.
He cites the 2,000 flights which passed through Shannon annually at one time, their new fleet of Boeing 737s, 767s and 777s, and Airbuses and their long years of experience. "Personally, I have been dealing with them for the previous12 years. I would like to think I understand the way they operate."
Aeroflot has been trying for some time to get the access to European airports allowed under EU regulations through the part-purchase of an EU-based airline. It briefly looked at the now defunct Virgin Express Ireland, the Shannon-based Sir Richard Branson-owned subsidiary of Virgin Express.
The Shannon connection to Amsterdam's Schipol Airport, a major European hub airport, will be the first leg of the new partnership agreement. "Eighty per cent of the aircraft beyond Amsterdam will be allocated to Aeroflot's requirements. We will be selling a limited Shannon-Moscow. We will be trying to maximise the Shannon-Amsterdam quota because that is all ours."
Mr Healy is optimistic about the new services business and tourism appeal. "Declan Power of Aer Rianta made it quite clear for the last number of years that he was very keen on an Amsterdam service. They had very, very positive traffic flows on it, people who were connecting either through Dublin using Aer Lingus or going by Heathrow.
"We think Amsterdam, besides being a good destination, will also be a great airport for transferring and hubbing." Mr Healy is also a strong believer in Warsaw, outlining its established Irish businesses and saying it will surprise people with its potential.
