EBACE Convention News

Mustangs galloping to Russia

 - May 20, 2008, 11:40 AM

Cessna Aircraft announced yesterday an order for 20 Citation Mustang very light jets from Russian charter operator Dexter and 24 Citations by Austria’s Jetalliance. Dexter is owned by two Russian private equity firms, Industrial Investors and Kaskol. Industrial Investors is the company behind AAI Acquisitions, which bought the assets of bankrupt Adam Aircraft Industries in April for $10 million dollars. Dexter CEO Eugene Andrachnikov didn’t comment on why the company is ordering Mustangs given that its sister company is planning to revive the Adam A700 program.

Andrachnikov said he visited all the VLJ manufacturers last year to evaluate which model to buy. This included a visit to Adam Aircraft, at which time the Russian investors got acquainted with the now-former Adam Aircraft team members who are part of the AAI Acquisition effort.

Dexter’s Mustangs should start delivering after the VLJ receives Russian certification in 2010. Meanwhile, the company already operates four Pilatus PC-12s of a 25-airplane order that is scheduled to be completed in 2011. The PC-12s are averaging 65 hours a month each, according to Andrachnikov. As the company’s fleet grows, Dexter will eventually offer nationwide charter service covering all of Russia.

Dexter’s business model is simple, offering PC-12 charter anywhere it can fly for 130 Russian rubles ($5.50) per kilometer carrying up to eight people and no additional costs unless the customer wants VIP services at a destination FBO. Customers do not pay extra to reposition the airplane. Russia is a growing market, Andrachnikov said, with 9,500 city pairs 1,000 kilometers apart, and aviation is generally the only way to get between these city pairs efficiently. As the Mustangs are added to Dexter’s fleet, Andrachnikov plans to charge the same amount per kilometer, but that will depend on what costs are like in 2011.

Jetalliance, a 12-year old charter, management, leasing, financing and maintenance company based in Oberwaltersdorf near Vienna, added another 24 Cessna Citations to its existing order, bringing the company’s total remaining orderbook to 88 Citations. The company’s 50-airplane order for 2008 includes four Mustangs, seven CJ2+s, 11 CJ3s, three CJ4s, 10 XLS+s, seven Sovereigns, four Citation Xs and four Columbus, all worth about $570 million. Last year Jetalliance sold 66 airplanes worth $560 million, said managing director Lucas Lichtner-Hoyer.

“Jetalliance is opening markets for Cessna all over Europe,” said Roger Whyte, Cessna senior vice president of sales and marketing.

In these markets, which include Western and Eastern Europe as well as Russia and CIS countries, travelers are looking for turnkey solutions offered by companies like Jetalliance, said Lichtner-Hoyer. “They don’t want to get involved in all those little details.” During the next 10 years, he added, demand for travel in countries like Ukraine, Romania, Bulgaria and others is going to grow, but especially for smaller jets that cost less to own and fly. The problem is going to be finding the needed pilots and maintenance technicians, which is why Jetalliance expanded its Vienna maintenance base recently and is adding more Citation simulators in that city, as well as planning satellite maintenance bases as its fleet grows.