BLUE FOX EVALUATES AIRLINE PARTNERSHIP & FINANCING OPTIONS
Blue Fox Executive Airlines is counting among its financing options the possibility of a partnership with an established carrier in addition to growing interest from various investors keen to get involved in the UK start-up.
Speaking from the Paris Air Show, Blue Fox president Michael Lord-Castle says that two airlines have approached the company about potential partnerships with the Stansted based carrier.
One of the unnamed airlines made an offer to assist Blue Fox, he says, while a second well-established carrier opened up the opportunity of a partnership with funding. Airline interest in Blue Fox follows recent news that United airlines, Virgin Atlantic airways and British Airways are all planning all business aircraft services.
Lord-Castle comments: “the other airlines are seeing the advantage at this stage of working with us. They see the benefit of what we are doing.”
He says an airline partner could help feed passengers into the all-business class transatlantic service that Blue Fox plans to being operating from March 2002 between London Stansted and New York JFK.
Besides an airline partner, Lord-Castle says the carrier is looking at various investor options that could raise the estimated £65 million ($91 million) needed to cover starting up operations as well as leases for a fleet of seven Boeing 767-300ERs and all other costs that are part of the three-year plan.
He says he plans to make an announcement about the airline’s financial support in six weeks’ time. Blue Fox has hired financial advisor Stoy Hayward to prepare a prospectus, due to be published in a few weeks.
At the Paris Air Show, Blue Fox received its first bit of financial support from GE-IAI Aviation Services International. The spares service provider is providing its service at a discounted price and is making available a £10 million spares inventory in a ten-year contract with the airline to support the proposed 767-300ER fleet.
Lord-Castle says the deal secures GE-IAI’s involvement in Blue Fox and shows its confidence in the airline. He points out that the contract helps to lower the overall price tag for the three-year plan by £8 million.
Additionally, Lord-Castle says, the airline has been approached by two separate organisations that could each cover all the costs anticipated by the carrier. He says that one in particular is willing to bring in $500 million in equity so that Blue Fox would buy all the aircraft on order instead of leasing them, as was its original plan.
He claims Blue Fox has already raised support among 200-300 small investors willing to put up some of the money needed, but Lord-Castle comments that “they would need a clear exit strategy”, and as a result he would consider taking the airline public as an option.
Meanwhile, the company is trying to win business for its proposed transatlantic service through independent travel agencies. In May, he says, Blue Fox secured an agreement valued at $10 million in flight bookings with a New York-based travel organisation that handles 400 US companies.