View Full Version : AOM/Air Liberte - future assured?

30th Jul 2001, 15:57
BBC reports that:

"A French tribunal has ruled out the break-up of loss-making airline AOM/Air Liberte, instead approving a takeover bid led by a former Air France pilot. The Holco group, led by Jean-Charles Courbet, beat off a rival bid from AOM managing director Marc Rochet.

The decision obliges Swissair, which owns nearly half of AOM/Air Liberte, to provide 1.3bn French francs ($174m; 122m) to give the airline a new start.

The decision "concludes Swissair Group's orderly withdrawal from our airline participations in France," Swissair chairman and chief executive Mario Corti said in a statement.

In early trading in Zurich, Swissair shares were up nearly 6% on the news.

AOM/Air Liberte's future has been uncertain since last month when it was put in the hands of administrators.

Last year, the airline lost 3bn francs.

The dominance of state-owned Air France has squeezed margins on AOM/Air Liberte's domestic routes. This has sparked concern that AOM/Air Liberte may never prove viable.

But strong government pressure for a rescue bid - prompted by the need to ensure competition on routes between France and its overseas territories - has raised hopes that the firm may benefit from state support. The government has already voiced approval of the tribunal's decision.

On top of the 1.3bn francs cash contribution to the restructuring of AOM/Air Liberte, Swissair will refund 200m francs for outstanding tickets, and will also bear the costs of cheaper lease conditions for four Airbus 340 planes by subsidiary Flightlease.

Holco plans to keep 3,000 of the current 5,000 employees, more than under any serious competing bid.

Earlier this year, AOM/Air Liberte's schedule was severely disrupted by a series of strikes in protest at a management-led restructuring plan, which could have led to 1,300 job losses."

30th Jul 2001, 20:08
I hear that fleet rationalization is expected soon. Not too surprising - AOM/Liberte operates too many aircraft types. What does surprise me is the initial report that the "revamped" fleet will focus on MD-80 and DC-10 aircraft. The A340s, FK100s and any A320s on order would disappear...

Why do you want gas and maintenance-intensive aircraft like those in your fleet? Sure, rent is probably cheaper in the short-run... but the long-term maintenance requirements will hurt the bottom line much more.

Here is my proposed fleet plan (but must first gain creditor approval for funding):

Long-Haul: Mix of A340s and A330s (already have experience on A340s)
Medium-Haul: A320s
Medium-to-short: High frequency CRJ and CRJ-70s for domestic

Cross train/qualify all Airbus pilots on long and short-haul operations. Operate high-frequency domestic routes (if appropriate slots exist) to compete with encroaching TGV service. Focus on both cost "containment" and yield-management on the revenue side. Cut chronic loss-making routes.

Best of luck to all AOM/Air Liberte employees!


31st Jul 2001, 03:03
It will not be an easy task to redress AOM/Air Liberte.... The most difficult will be to motivate the old employees of the company.

I think that new Airbus belong to flightlease (a Swissair company) and it's much more expensive to lease an airplane than to own one.