GetJet Airlines (GW, Vilnius) founder and chairman Aleksandr Celiadin says he has no interest in setting up AOCs outside the pan-European market, as current certification allows the airline to operate worldwide.
Speaking exclusively to ch-aviation, Celiadin says he's turned GetJet into a successful ACMI operator in a market where others have failed because the company is focused on the basic principles of hiring the right people, focusing on the right assets, managing contractual risks, and staying customer- and market-oriented.
"We were one of the first to dive into ACMI leasing [in 2014], and what matters is how you do the job," he said.
GetJet Group holds Lithuanian and Latvian-issued AOCs, with the Lithuanian AOC supporting 13 aircraft including seven A320-200s, one A321-200, and five B737-800s. The smaller GetJet Airlines Latvia (GJ, Riga) has a single A320-200 - plus one of the B737-800s wet-leased in from its Lithuanian sibling airline.
The right size to serve the ACMI market
"I think we are just the right size," said Celiadin. "In the past, we've experimented with scaling up to 25 aircraft, then downsized to ten, and now we've found our magic number. I firmly believe that the key ingredients for successful ACMI services are stability, efficiency, reliability, quality, and safety. It's a significant challenge for large competitors that rapidly expand their fleets every year, often while constantly changing management and simultaneously launching new start-ups. This leads to fleet transitions across continents and the complexities of training crews with diverse licences, nationalities, and aircraft registrations. Managing seasonality and market corrections adds further complexity. While I admire their efforts to sustain this model over the long run, I wouldn't envy their position."
GetJet has four A320-200s placed with Air Serbia (JU, Belgrade Nikola Tesla) and four with Vueling Airlines (VY, Barcelona El Prat). Other aircraft in the group have been on short-term coverage missions flying this year on behalf of Wizz Air, airBaltic, Marabu, Transavia Airlines, TUI, and Freebird Airlines, among others, as well as on a long-term year-round charter contracts from Vilnius with tour operators.
"Smaller, independent ACMI airlines will persist and continue to emerge, as the demand for flexibility, efficiency, and reliability remains the top priority for ACMI customers," said Celiadin. "The global nature of the industry assures me that airlines worldwide will increasingly rely on ACMI services for immediate problem-solving, rapid scalability, and flexibility, even in five or ten years."
"We've earned a reputation as a well-regarded crewed aircraft leasing company, known for our ability to quickly mobilise and adapt our resources to meet the industry's demands. Unlike large ACMI companies, which move like freight trains, powerful but constrained to fixed tracks and slow to accelerate, we operate like a sports car or, as we internally liken ourselves, a Formula 1 team. We're capable of rapid acceleration and nimble turns, quickly adapting to the dynamic conditions of the aviation market."
A preference to focus on existing markets
Celiadin notes that GetJet isn't focused on competing for size but on service quality and agility, along with a disciplined approach that enables it to address client needs promptly and efficiently. "When someone, somewhere, requires a crewed narrowbody aircraft, we are here to deliver," he says.
However, he would rather concentrate on existing markets than try to service every market effectively. "We are somewhat sceptical about applying the one size fits all model," he said. The existing markets offer significant opportunities for the company, whether it's wet leasing, engine leasing, or aircraft sales. But GetJet holds certifications and approvals that allow it to service clients worldwide, and Celiadin says the airline is continually exploring opportunities to expand its operational reach through audits and additional certifications.
"A recent milestone for us in this regard is achieving Part 129 Operation Specification approval from the US Federal Aviation Administration for GetJet Airlines Latvia," he said, adding that this "opens up new possibilities for us to operate in the United States."
While Celiadin is pretty comfortable with his market position right now, he acknowledges some challenges. Last year, crew shortages were a significant issue for GetJet. This year, delays from OEMs have impacted product sales. There are also ongoing engine issues and other disruptions in the supply chain.
However, many of his competitors are in a more problematic position, he thinks. "Many of our major competitors are currently grappling with extremely pricey aircraft lease extensions as short-term, favourable pandemic lease term contracts expire," he said. "This gives us a huge competitive advantage. Additionally, numerous client airlines are vying for the same types and vintages of aircraft as ACMI operators, which shifts our focus from merely selling our services to sourcing reasonably priced aircraft for our own fleet. Fortunately, we managed to secure most of our aircraft long before the surge in lease rates."
GetJet sources its aircraft from AerCap (two A320s + two B737s), Willis Lease Finance (one A320), World Star Aviation (four A320s + three B737s), and Magnetar Capital (one A321).
Playing a different game to competitors
GetJet's chairman says many competitors have flooded the market with aircraft to serve struggling airlines. "It's important to remember that this situation isn't guaranteed," he said. "Every ACMI operator must uphold fairness with lessors, crews, and major aviation suppliers by making long-term commitments and clearly outlining how they plan to fulfil them in the coming years. This includes addressing high lease and reserves rates, maintenance costs, engine risks, and redelivery costs."
"Currently, it seems that few are taking these factors seriously, perhaps influenced by the get-out-of-jail-free cards and Chapter 11 strategies that the pandemic era provided to many in the industry. GetJet never played those games. We only make commitments when we can fulfil them over the long haul. That's probably the reason we have sustained the best premium product in the market for so many years."
"I'm confident that we'll see less significant competition in the future because I don't think the too-big-to-fail strategy can effectively sustain itself in our industry."
Celiadin says that, ultimately, customer airlines will always dictate ACMI prices, and it's up to supplier airlines like GetJet to be agile and efficient enough to respond. In May, GetJet posted its 2023 financial results, reporting a 70% increase in revenue to EUR176 million euros (USD190 million) and a 400% growth in profit to EUR28 million (USD30.2 million). At the time, CEO Rūta Kulvinskaitė said its agility and ability to supply aircraft at short notice when other competitors could not gave it a competitive edge had contributed to the financial performance.
"I think it's important to never forget where you come from," said Celiadin, who attributed the outcome to his employees, who he calls "the essence of the company." He highlights a focus on core business principles, such as focusing on the mission and delivering value, as well as strong asset and risk management practices, as important factors in GetJet's results. He also thinks it is important not to get too wrapped up in things, saying you can be professional without taking yourself too seriously. "At the end of the day, we're worth a few hundred million euros," he said. "Some people spend that on buying a yacht."
Editorial Comment: Opening paragraph edited for clarification - 17Jun2024 - 05:27 UTC