Avia Solutions Group increases its ACMI* market share
The Baltic business airline KlasJet will start ACMI activities from this autumn. As a result, the current fleet will be expanded considerably. “By the end of this year, five Boeing 737NG aircraft in an economy class configuration of 189 seats will be added to our fleet. There should already be 15 by the end of 2023. These new aircraft are destined for wet lease operations,” said Rita Domkute, CEO of KlasJet. “In addition, KlasJet will also continue to offer VIP private charter services. The KlasJet fleet currently consists of seven VIP aircraft. The luxury fleet will be expanded to 10 aircraft by 2023.”
The Boeing 737NG is an aircraft type that has not yet been included in the ACMI offer list of Avia Solutions Group, which also includes KlasJet. “I am confident that our experience with VIP charter services and the ACMI expertise within Avia Solutions Group, will enable us to smoothly enter the ACMI market and offer quality services from day 1,” said the CEO of KlasJet.
In Benelux, it has so far been sports teams that call on the services of KlasJet. Last year, during the European football championship, Belgium’s Red Devils travelled in a KlasJet VIP Boeing, and recently the Royal Antwerp FC team flew from Antwerp airport with the Baltic business charter provider. A few months ago, KlasJet also provided the transport of the official Belgian delegation following the state visit of the royal couple to Greece.
Ever-growing ACMI market
In 2021, the ACMI aircraft market was estimated to be around 4.2 billion US dollars. It is expected to reach more than 8.8 billion US dollars by 2030, i.e. an annual growth rate of no less than 8.49 percent from 2022 to 2030. The ACMI world market is characterised by seasonal influences and various demand peaks during the year. In 2019, for example, 650 million passengers out of a total of 1.15 billion passengers who took the plane were carried from June to October. That is about 31% more passengers than during the winter season. On the other hand, demand in South America, Asia-Pacific and Africa is just opposite to that in Europe.
To meet the growing demand for ACMI capacity from major airlines, KlasJet is joining the airlines around parent company Avia Solutions Group, and the business airline is expanding its portfolio with ACMI passenger services.
Avia Solutions Group is active on almost all continents and has long maintained good relationships with airlines, ACMI operators, MRO companies and providers of training services. The group’s fleet (including SmartLynx Airlines, Avion Express, Bluebird Nordic and Magma Aviation) currently numbers 140 aircraft.
Several major legacy carriers indicated in their updated strategic plans that one of the tools to increase efficiency is the use of third-party ACMI services. In this way, the seasonal demand can be met and the capacity can also easily be reduced during the low season. It is generally believed that one ACMI aircraft per season, depending on the region and the business and revenue model of the airline concerned, can fetch between 1 and 3 million US dollars.
“Lenders, shareholders and governments have been demanding greater efficiency from airlines since the Covid pandemic. For the past 19 years, airlines have generated an average of 1.57% profit per year. There are not many opportunities to increase efficiency. However, closing ACMI contracts for the peak season is one of them,” said Rita Domkute, CEO of KlasJet. “Avia Solutions Group is the largest capacity provider in the world and we want to be part of its continued growth.”
* An ACMI contract (also known as a wet lease agreement) is a lease agreement between two airlines in which one company (lessor) provides an aircraft, crew, maintenance and insurance (ACMI = aircraft, crew, maintenance, insurance), while the lessee provides (lessee) generally assumes all other operational costs (kerosene, airport taxes…) and obligations. The lessee is also responsible for sales and marketing, and also supplies the flight number, and pays the lessor a fee per hour or per month.
