Finnish carrier Finncomm spends EUR 100 million to buy eight airplanes
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Finnish Commuter Airlines (Finncomm) announced on Monday the purchase of eight ATR 42-500 turboprop aircraft worth over EUR 100 million in total.
The deal was revealed at a press conference held at the Paris Air Show. The contract signed with the Italian-French manufacturer ATR also includes an option on eight further ATR-500 series planes in the future to meet the anticipated traffic growth.
"This is a fairly substantial investment", comments Finncomm CEO Juhani Pakari.
Finncomm will finance the acquisition through a bank loan. The financing arrangements have been agreed in such a way that the deal will definitely materialise.
Pakari describes the arrangements as "extremely complicated". Finncomm is currently taking offers from various banks. According to Pakari there has been a great deal of interest towards the deal. "We will see which way the scales tip."
"The first plane will arrive in October-November 2005", Pakari explains. ATR should deliver the last of the fleet by the end of 2007.
According to Pakari there are two main reasons for the purchase. Firstly, Finncomm needs to increase its carrier capacity, which - at least on some routes - has started to trail behind the mean demand.
Finncomm supports the Swedish carrier Golden Air in its Finnish domestic operations. With its 34-seater Saab 340 planes, Finncomm flies to 11 cities in Finland. The new ATR planes will accommodate 48 passengers each.
The second argument is purely economic. Finncomm has calculated that owning new planes makes better business sense than paying for the maintenance of rented aircraft that are already near the end of their service lives.
Last year Finncomm carried more than 300,000 passengers in Finland. Its share of domestic passenger air traffic in Finland was around ten percent. The company's operating profit was approximately EUR three million, while net sales reached EUR 14.9 million.
The net sales figure describes poorly the extent of Finncomm's operations. This is because the Swedish carrier Golden Air is judicially responsible for the Finncomm flights and owns most of the planes used on the Finncomm routes. The ticket sales and turnover are also handled through Golden Air.
Finncomm, in turn, plans and produces the air traffic in its entirety by using its own staff. "Last year, we produced services worth over EUR 40 million", Pakari says. Golden Air pays Finncomm for these services.
This payment shows as Finncomm's operating profit.
Finncomm's ownership is divided between seven private investors. The company is completely independent, but it collaborates with Finnair.
For one thing, Finncomm's domestic flight schedules have been fitted to mesh with and support Finnair's international services.
Pakari believes the 10 to 15-year investment in the ATR planes is worthwhile. "I have been involved in the domestic air travel business for 17 years. I pretty much know what this is all about." Caption: ATR 42-500 airplanes are built by Avions de Transport Régional (ATR), an aircraft manufacturer based in Toulouse, Southern France. ATR is an equal partnership between the multinational EADS and the Italian Alenia Aeronautica. Finncomm airlines http://www.finncomm.com/english/index.html ATR http://www.atraircraft.com/ Golden Air http://www.goldenair.fi/english/frontpage.html
The deal was revealed at a press conference held at the Paris Air Show. The contract signed with the Italian-French manufacturer ATR also includes an option on eight further ATR-500 series planes in the future to meet the anticipated traffic growth.
"This is a fairly substantial investment", comments Finncomm CEO Juhani Pakari.
Finncomm will finance the acquisition through a bank loan. The financing arrangements have been agreed in such a way that the deal will definitely materialise.
Pakari describes the arrangements as "extremely complicated". Finncomm is currently taking offers from various banks. According to Pakari there has been a great deal of interest towards the deal. "We will see which way the scales tip."
"The first plane will arrive in October-November 2005", Pakari explains. ATR should deliver the last of the fleet by the end of 2007.
According to Pakari there are two main reasons for the purchase. Firstly, Finncomm needs to increase its carrier capacity, which - at least on some routes - has started to trail behind the mean demand.
Finncomm supports the Swedish carrier Golden Air in its Finnish domestic operations. With its 34-seater Saab 340 planes, Finncomm flies to 11 cities in Finland. The new ATR planes will accommodate 48 passengers each.
The second argument is purely economic. Finncomm has calculated that owning new planes makes better business sense than paying for the maintenance of rented aircraft that are already near the end of their service lives.
Last year Finncomm carried more than 300,000 passengers in Finland. Its share of domestic passenger air traffic in Finland was around ten percent. The company's operating profit was approximately EUR three million, while net sales reached EUR 14.9 million.
The net sales figure describes poorly the extent of Finncomm's operations. This is because the Swedish carrier Golden Air is judicially responsible for the Finncomm flights and owns most of the planes used on the Finncomm routes. The ticket sales and turnover are also handled through Golden Air.
Finncomm, in turn, plans and produces the air traffic in its entirety by using its own staff. "Last year, we produced services worth over EUR 40 million", Pakari says. Golden Air pays Finncomm for these services.
This payment shows as Finncomm's operating profit.
Finncomm's ownership is divided between seven private investors. The company is completely independent, but it collaborates with Finnair.
For one thing, Finncomm's domestic flight schedules have been fitted to mesh with and support Finnair's international services.
Pakari believes the 10 to 15-year investment in the ATR planes is worthwhile. "I have been involved in the domestic air travel business for 17 years. I pretty much know what this is all about." Caption: ATR 42-500 airplanes are built by Avions de Transport Régional (ATR), an aircraft manufacturer based in Toulouse, Southern France. ATR is an equal partnership between the multinational EADS and the Italian Alenia Aeronautica. Finncomm airlines http://www.finncomm.com/english/index.html ATR http://www.atraircraft.com/ Golden Air http://www.goldenair.fi/english/frontpage.html
Helsingin Sanomat