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Lithuanian Airline-ACMI Provider Becomes Cautious After Growth

Brexit poses risks, and mechanic availability could be a challenge.

In just a few years, Avion Express has become the largest airline in Lithuania and says it is the largest narrowbody ACMI (aircraft, crew, maintenance and insurance) provider in the world, measured by fleet size. But Avion has a major stake in both global trends and in European developments. CEO Darius Kajokas is carefully optimistic about aviation prospects but is aware of economic risks, including MRO markets in which he must buy services for his airline and ACMI fleets.

Despite that jet-fuel prices have about doubled since January, carriers are not parking jets, Kajokas notes. Both demand for travel and problems with some of the new aircraft are keeping older aircraft in operation longer. Avion itself has increased its fleet 80% since 2016 and its passenger counts by 58%. It now operates 18 Airbus A320s.

Kajokas says it is too early to speculate on the impact of the UK’s Brexit on travel demand. Avion mostly serves Europe in the summer, but in the winter it is shifting to Turkey, Asia-Pacific and South America for a bit of natural protection against any slide in UK traffic.

Generally, the Avion CEO expects MRO to grow with the rest of the industry. However, “since we acquire maintenance services from other providers, we acknowledge some difficulties may arise,” partly due to maintenance labor shortages. “It takes five to six years to prepare a qualified (maintenance) specialist, as opposed to two years for pilots,” he says. To deal with any MRO constraints, Avion will have to “look deeper into the situation and concentrate even more on planning and fleet supervision.”

Kajokas is thinking about further expansion but acknowledges that the collapse of Air Berlin and Monarch Airlines in 2017 show expansion plans must be carefully considered. Meanwhile, he is ensuring Avion has pilots for itself and ACMI clients by introducing a cadet program and type-rating program.

TAGS: Airlines
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