Another potential new customer for A350:
www.ch-aviation.com/portal/news/58213-cyprus-cobalt-outlines-fleet-renewal-growth-plans"Cobalt (CO, Larnaca) has outlined its provisional fleet renewal and growth expansion plans as it gears up to reach break even in 2019.
Launched in June 2016, the Cypriot hybrid carrier currently operates a dry-leased fleet of two A319-100s and four A320-200s on scheduled passenger flights connecting Larnaca with eighteen destinations in Greece, Lebanon, the United Kingdom, Belgium, France, Israel, Switzerland, Spain, Iran, and Ireland.
In an exclusive interview with ch-aviation, Chief Executive Officer (CEO) Andrew Madar said Cobalt's immediate desires are to standardize its current fleet to an all-A320 fleet with dual-class seating. The A319s are seen as a mismatch for Cobalt's current model and are a relic of its early days when it had to grab capacity where possible, the CEO said. As it stands, Cobalt plans to standardize its business/economy class configuration across its fleet of A320s at the end of the current summer season with the A319s acting in a support role. They will also be used for the carrier's flourishing ACMI business, a consequence of Cyprus's seasonal market wherein demand plunges during the winter months.
According to Madar, should a deal be struck for the A319s' early withdrawal, Cobalt may even look at replacing them with A320neo that will come available through lessors from 2018/9 onwards. Cobalt plans to gradually phase out its older jets in favour of their NEO equivalents. It is also looking at placing a direct order with manufacturers approximately two to three years after its operations have stabilized. While there is a strong inclination towards Airbus (AIB, Toulouse Blagnac) given its after-sales support in the region and that the bulk of Cobalt's flight-crews are of ex-Cyprus Airways (1947) (CY, Larnaca) stock, Madar has not ruled out introducing equipment from other manufacturers including Bombardier (BBA, Montréal Trudeau) and even Embraer (São José dos Campos).
The CEO said that talks with the Canadian and Brazilian manufacturers have already taken place about the CS300 and E Jet-E2 respectively. The C-Series in particular, Madar said, is appealing from an operational as well as onboard product point-of-view. Its range and capacity are also "very interesting" and it will be seriously considered should Bombardier put forward a competitive offer. The same was said about the E Jet-E2 with Madar noting that Embraer had already undertaken route studies for Cobalt concerning the type's relevance.
"I want to switch us to completely new technology at some point," he said. "We cannot stay with this type of fleet [A320ceo Family jets] and compete with others which are switching to New Generation aircraft."
Though Chinese manufacturer AVIC has a stake in Cobalt, it has not pushed the C919 as an option, Madar said adding that this may change if and when the aircraft proves itself commercially. At present, the C919 does not feature in Cobalt's business plan.
In the short- to medium-term, Cobalt is not looking to dramatically expand its capacity, preferring instead to maximize the utilization of its existing fleet. This Madar said, was critical to avoid the perennial headaches of winter overcapacity. As such, over the next four years, Cobalt will operate a modest fleet of between six and nine narrowbodies on its short-haul network.
Concerning the airline's much-touted long-haul plans, Madar said he expects an intercontinental debut towards the end of 2018. At the moment, Cobalt is considering whether to use the A330-200 or A340-300 to help kickstart the project. One of the options being looked at is the use of two A340-300s initially before transitioning to A330-200s. Despite higher DOC and maintenance costs, A340s, if taken on short-term lease, are very cost-effective and would provide a good segway to the A330. In the longterm, Cobalt is looking at A330neo and even A350s and B787s. Though Airbus is heavily favoured given the current A320 Family in use, the possibility of B787s is strong provided Boeing (BOE, Chicago O'Hare) can get the numbers right. According to Madar, Boeing has also pitched B777s (deemed too big) and even B767s.
In terms of routes, Madar said China, India, and even South Africa would be the most likely maiden destinations. In China, AVIC will be able to assist Cobalt in gaining the requisite CAAC operation specifications as well as slots at airports such as Beijing Capital, Guangzhou, and Shanghai Pudong. Further down the line, Cobalt is also looking at serving Xi'an Xianyang, Chengdu, and Chongqing and is even talking to smaller Chinese regional carriers about codesharing and providing regional feed. Entry to the Chinese market will see Cobalt focussing on O&D leisure traffic i.e. luring Chinese tourists to Cyprus, as well as tapping into the East-West travel market which is currently dominated by the Middle Eastern hubs of Dubai Int'l, Doha Hamad Int'l, and Abu Dhabi Int'l.
While leisure travel to Cyprus currently constitutes the bulk of Cobalt's operations, it has begun connecting hub operations using its Larnaca base. Thus far, the carrier has seen particularly strong demand for travel to/from Beirut to France and Spain.
Recently inaugurated flights to Tehran Imam Khomeini, Iran, are also doing "very well". According to Madar, despite the geopolitical issues associated with serving Iran (flights typically transit states that are opposed to Iran resulting in occasional overflight traffic right issues), the market presents tremendous opportunities given it is almost year-round. The service to Iran forms part of Cobalt's strategy of tapping into niche markets that can help boost demand during winter. Persian New Year, as well as the Chinese New Year, present such opportunities, Madar said.
In terms of the local Cypriot market, Cobalt will base one aircraft out of the western town of Paphos with the onset of the 2017/18 winter season. According to Madar, compared to Larnaca, Paphos is both higher yielding and less susceptible to winter drops in demand. He attributed this to its higher population of mainland European retirees with greater levels of disposable income.
Lastly, Madar hinted at potential partnering with fellow Cypriot carrier Tus Airways (U8, Larnaca) in the coming months. Cobalt does not see TUS as direct competition, but as a valued partner to its operations, he said."
