The future of Skytrans

In this exclusive interview, Gytis Gumuliauskas, the new managing director of Skytrans under Avia, walked Australian Aviation through the company’s vision of Skytrans’ future.

AA: Can you give us an idea of what Avia Solutions Group does?

GG: Avia Solutions Group is recognised as the biggest ACMI provider in the world in terms of consolidated figures of aircraft among several AOCs and several airlines. When I say several, it’s really not “a few”. There are more, such as SmartLynx, Avion Express, BBN Indonesia, AirExplore, etc. All of them are mainly narrow-body operations, with some Airbus A330 operations for wide-body. With the recent acquisition of Skytrans in Australia, we’ve accumulated 212 aircraft, I believe. Skytrans has brought in turboprops and Cessna Caravans, but the rest of them are Airbus A320 family and Boeing 737s in terms of size.

Apart from ACMI, the group has, in general, 17 business lines, mainly in the aviation industry, starting with MRO organisations – maintenance and repair, line maintenance, and base maintenance. BAA is a pilot and cabin crew training company with full flight simulators and several offices in Vietnam, Vilnius, and Barcelona. We also have ground handling and fuelling activity, so we cover all aviation areas except catering.

AA: Why did Avia believe now was the time to expand into Australia?

GG: It’s an organic development. It’s not about why exactly now – it’s about the development of AOCs and the development of covering different parts of the world. One of the last AOCs was in Jakarta, Indonesia, which I believe was obtained by the end of August 2023. Later on, the decision was made to expand into Brazil with a local AOC, and Australia was also one of those locations. It was just part of organic growth covering different parts of the world and developing the ACMI, including later on the possibility to switch workers between different seasonalities and continents depending on the job in each market at different times of the year.

AA: What specifically about Skytrans appealed to Avia?

GG: Among other options, it made the most sense. Before developing or creating an AOC, you’re evaluating options to start from zero, establish a new entity, collect personnel, and do the job, or acquire an existing AOC. So, we were considering several options, and we found that Skytrans would be a good fit for us in terms of the company size and how big they are. What exactly they’re doing is not our portfolio, meaning that RPT operations are an existing base, but at the same time, it generates activities in existing operations, generates revenues, has certain clients, it’s known as a known brand in the market. Also, you’re saving time when you have an existing AOC because it’s not the beginning, so you will potentially lose less time for induction of a new aircraft type.

AA: What has Avia planned for Skytrans?

We’re planning for Skytrans to develop ACMI activities to be an independent ACMI provider. In the existing market, you can find ACMI business and ACMI opportunities, but there are not many that cover this part of the market. For example, a well-known carrier with existing ACMI, charter and FIFO operations has a limit of about 100 seats. You need to find and look around for the rest. We’re coming here to cover that part, on average: 135, 140, 145 seats and above.

So, the core business is to develop ACMI activities and charter operations. We’ll maintain existing Skytrans RPT operations at the level of what we have. Sometimes, there are some routes or tenders for routes with the potential to operate with less competition – that would be our path for the existing operations. But RPT generally doesn’t see it as a big development because it’s not our core business. We are an independent ACMI provider – we don’t want to compete with regular operators. We want to be a solution for them.

AA: In essence, you’re keeping the RPT side of the business but are not particularly looking to add many new routes.

GG: That’s right – we are willing to keep and maintain, at least for now, existing RPT operations here in Far North Queensland but not expand these routes any further in the rest of Australia because it’s not our core business. If there’s sustainable business from existing operations here in this part of Australia, it may continue as it is. Is there a chance of discontinuing RPT operations in the future? At the moment I’m not able to answer because, as I said, we are focusing on the development of ACMI with jet operations. Potentially, there is an option to develop turboprop ACMI operations, but that depends on the market needs, which we’re now analysing and studying and talking to potential customers – but it would be a side business potentially to add on top of jet ACMI operations.

AA: What aircraft will Avia be bringing in, and how many?

GG: The main vehicle and initial aircraft will be A319s. We have a plan for those, but depending on the market needs, A320s can also be brought if there is a job for them. A321s are also something to consider because there are certain potential routes the existing carriers are flying. We’re here to supply the capacity for airlines to work around, for example, delayed aircraft deliveries, maintenance works, shortages, crew, peak seasons, and so on – or development of existing operations, selling a few more tickets.

Within three to five years, we’re willing to develop up to 20 aircraft for now, but it’s not written in stone: it depends on what the market needs. It can be more or a bit less, but it’s roughly between 18 to 20 units. That’s what we are foreseeing at the moment. First aircraft to be arriving in October, three units by the end of 2024, and adding five to seven units during 2025, then varying in the following years to grow by three to five units each year. That’s organic growth, how we’re building a business case. A lot depends on customer needs – if there is a bigger demand, we can bring them in quicker. If it’s less, we will continue to grow.