Sirio (SIO, Milan Linate) is looking to expand internationally and attract more aircraft owners beyond its traditional customer base among the Italian business community, chief executive Tom Engelhard told ch-aviation on the sidelines of the EBACE conference in Geneva. The company is also looking for more charter-friendly aircraft to increase synergies with sister operator Flexjet.

"Our vision for the future is that we want to move beyond Italy because the business model that we have in Italy works for other international clients as well. We don't necessarily only need clients in Italy. Our director of aircraft management is now based outside of Italy, promoting our business model to these international clients. We will soon be able to officially announce several additional aircraft joining our fleet, all from international clients. The pipeline has started slowly to turn into planes," Engelhard explained.

The operator's first non-Italian customer is currently moving its aircraft from another European AOC, which Engelhard considers proof that the model can work. Nonetheless, Sirio is only at the beginning of its internationalisation drive.

Despite the growth plans, Sirio does not want to expand too fast and intends to remain a boutique aircraft management company. This allows it to be selective with prospective customers and maintain a personal, tailormade approach. It is in talks with existing aircraft owners looking to move their aircraft to Sirio's AOC and prospective first-time buyers. However, Engelhard stressed that Sirio is only interested in long-term partnerships.

Appeal of the Italian AOC

The Milan Linate-based aircraft management company still retains an exclusively Italian customer base. This is now changing.

"After the pandemic, we did see more requests for aircraft ownership. On an increasing but low level - in Italy, there's a limited number of clients that already have their aircraft or think about owning one. Interestingly enough, Italy’s recently adopted flat tax regime attracted quite a number of foreigners. We had a few foreigners taking up residency in Italy asking us to bring their aircraft onto our fleet," Engelhard revealed.

The flat tax rate allows high-net-worth individuals who move to the country to pay a fixed amount of EUR100,000 euros (USD108,500) on all their foreign income per year.

All of Sirio's commercially operated aircraft are currently on the Italian I- register. Engelhard explained that for Italy-based owners, having aircraft registered in the country is a preferred choice.

"Our Italian clients never thought twice to have it somewhere else, they just register their aircraft in Italy," he said. "Is there a point in the future where we'll decide to have an AOC somewhere else? Could be, but at the moment we don't see a reason to do it."

While he conceded that bureaucracy is a burden in Italy, he said that this is no different in many other countries. Sirio has a good working relationship with the Civil Aviation Authority (Ente nazionale per l'aviazione civile - ENAC), so this is not noticeable for the owners as the operator handles the bureaucratic processes.

Fleet strategy and charter outlook

The majority of prospective new customers already have an aircraft, but Sirio is also in talks with clients who are only planning to buy one. The management firm aims to remain independent of any specific OEM and does not directly advise customers to buy any particular type - rather, it often puts them in touch with specialists in this regard.

"We don't really want to say 'buy this, buy that' due to the danger the customers might think we are biased or get a commission," Engelhard pointed out.

Sirio currently has 15 aircraft on its Italian AOC, namely one Challenger 350, two Global Express XRS, one Global 5500, one Falcon 2000LXS, one Falcon 2000, three Falcon 2000LX, three Falcon 7Xs, and three Gulfstream G550s. Engelhard said the firm was trying to "stick to do what we do well" and will prioritise super-midsize to large jets for its growth.

However, smaller aircraft would be an option if the owners were open to chartering them out. While some of Sirio's customers avail of their aircraft for charter to some degree, the company is now looking to grow in this segment. It would focus predominantly on similar types operated by sister company Flexjet (Directional Aviation owns both), specifically Praetor 600s and Gulfstream G650s.

"We would take on a smaller aircraft if it's charter-friendly. We got asked about managing light jets in the past and we do have clients with their long-range aircraft in our fleet that, every now and then, would like to charter a smaller aircraft. It'd be nice to be able to cover that in our fleet, whereas right now we give it to a partner," Engelhard explained.

Maintenance and the Linate base

The operator tries to keep the necessary services for its operations - including CAMO, training, and maintenance - in-house. Engelhard stressed that this has been Sirio's philosophy since its launch in 1984. The emphasis on maintenance increased after the 2018 acquisition by Directional Aviation to support the Flexjet fleet, as this synergy was one of the critical elements of the transaction. To ensure the highest possible dispatch rate for its sister company, Sirio just launched a dedicated maintenance team for the Flexjet fleet, which will be working seven days a week.

Engelhard said that currently the maintenance workload was split roughly 50/50 between Sirio's and Flexjet's fleets, with a limited number of hours dedicated to third-party customers, especially clients with long-term contracts.

Given the widespread and persistent supply chain issues, Sirio is "still one of the luckier" operators as it has a large spare parts warehouse in its facilities at Linate. Engelhard stressed that the operator always advises owners to stockpile crucial spares ahead of time, which is now bearing fruit as they do not have to wait months to procure them.

"Sometimes things break that don't break too often, and you don't have the spare available and then you rely on the OEM to find one. And then it's getting more complicated," he conceded.

Sirio leases three hangars at Linate, which allows it to offer premium services at an airport that not only caters to the wealthy region of northern Italy but is also conveniently located to quickly reach most of the other European business aviation hotspots.