CobaltAir to launch end-Q1 2016
CobaltAir, the new Cyprus-based airline that plans to launch full commercial operations by the end of the first quarter of next year, has already rented premises, hired 22 staff and leased an Airbus A320, with more aircraft expected to be added to the fleet.
The low-cost airline’s CEO, Andrew Pyne, with long international aviation experience, said that the initial motivation to start the company was because of the vacuum created by the demise of former national carrier, Cyprus Airways (CAIR).
“It’s bad for the economy when the country does not have a flag carrier,” he said in an interview, adding that since he and his associates arrived on the island at the end of January, their intention was to develop Cyprus as a strong hub.
“We have initially leased a 180-seat A320 and plan to expand the fleet to include A330s to take advantage of commonality, pursuing a number of aircraft initially on lease, while future purchases also depend on the completion of the capital raising, presently underway,” he said.
Of the staff hired so far, 90% are local recruits, some from ex-Cyprus Airways, but hired on new terms.
By the time of the launch at the end of Q1, staff numbers should rise to 100 with a route network of 5-6 destinations, added Chief Commercial Officer Mike Hayden.
“Securing the Air Operator Certificate (AOC) is almost 90% complete, with the main outstanding issues being the inspection of the facilities and approving the flights,” said CEO Pyne.
The fleet expansion depends on the development of markets and in a year after the launch, by the end of 1Q 2017, the plan is to have a network of 8-hour flight routes, reaching out as far as Asia and Africa.
For now, the company, New Age Airlines Holdings Ltd., is based in Nicosia, but plans are to move to Larnaca.
“After the demise of CAIR, fares have gone up and consumers deserve better deals,” Pyne said, adding that they will be marketing ‘value for money’.
Despite the high costs involved in operating the lucrative Cyprus-Russia route, he said that “we understand the high cost structure of the Russian routes, but we also plan to develop the off-season market, with the promotion of antiquities, inland resorts and the mountains, “not just bucket-and-spade holidays.”
Cyprus needs more aggressive promotion, in cooperation with the Cyprus Tourism Organisation, to target “traditional” markets such as Germany, Scandinavia and Ireland, to name a few.
As regards airline alliances, CEO Pyne said these “tend to undermine the low-cost model, as the cost is staggering in terms of system integration, up to 30 mln euros, adding that the plan is to develop relationships and “intraairline” cooperation.
CCO Hayden said: “I prefer to get my loyalty awards upfront, with a good deal on the fare,” adding that Cobalt, that takes its name from the deep-blue colour identified with the Mediterranean, will also be looking to serve the business traffic.
“It is unlikely that our fares will be at the lowest end of the low-cost operators, but it will be within the rules of a level playing field,” Pyne said, explaining that airlines such as Ryanair get Cyprus government subsidies to operate certain necessary routes.
The ‘fifth freedom traffic rights’ allocated to other airlines has not given out all of CAIR’s rights to other carriers, making it more suitable for these to be allocated to a genuinely Cypriot carrier such as Cobalt.