Irish-headquartered air travel services business Avia Solutions is in the final stages of expanding into new markets to boost revenue during seasonal slowdowns in a key European business.
Avia leases aircraft and crews to fly routes for European airlines during the busy summer season, but this business slows in winter as demand slides by around 40 per cent, according to Gediminas Ziemelis, the group’s chairman.
The company has been acquiring airline licences, known as air operator certificates (AOCs), in territories including Australia and South America that will allow it to offer similar “wet-leasing” services, as the provision of aircraft and crew is called, to airlines in those regions.
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Mr Ziemelis noted that what he dubs this “countercyclical” move will enable Avia to use its aircraft and generate revenues during the slower winter period in Europe.
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Avia has, or is in the process of getting AOCs in Canada, Brazil, India, Indonesia and Malaysia, while it is in the final stages of getting one approved in Mexico.
Its existing licences cover Europe, Australia, much of southeast Asia and give it access to Canada.
“We have been working on this for seven years,” said Mr Ziemelis. “Everything in aviation is slow and expensive.” He added that “every AOC costs at least $25 million [€22 million].
Taken together, he believes that those new air travel markets combined will be on a similar scale to Europe’s, which is the world’s largest, with 1.2 billion passengers a year.
The big difficulty with Europe for an operator such as Avia is the seasonal bias towards summer, when everyone travels at the same time, said Mr Ziemelis.
Clients in Europe include Eurowings, part of German group Lufthansa, Ajet, which is Turkish Airlines’ low-cost carrier, Transavia and Volotea.
It aims to recruit the likes of Viva Aerobus in Mexico, and Gol and Azzul in Brazil as it expands, along with carriers in southeast Asia.
Avia has ordered 40 Boeing 737 Max passenger jets from Boeing and has an option to take a further 40. The company was the first to place an order with the US manufacturer after the end of a long strike last year, according to Mr Ziemelis.
Both Boeing and Airbus, its main rival in the commercial jet market, have struggled with delayed production since the end of the last decade.
Mr Ziemelis believes the US aerospace giant will have dealt with these problems by the time his company’s order is due for delivery in 2030 and that Avia should get its new aircraft on time.
The group is used to operating across multiple jurisdictions as it has a presence in more than 60 countries worldwide. Its businesses include a large maintenance arm, FL Technics.
The company’s head office in Dublin is home to some treasury and back-office operations, said its chairman.
Mr Ziemelis is a shareholder in the group. Other investors include Certares, the New York-based private equity business founded by Greg O’Hara.
