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Investing in a vision for VLM

Arthur White had the opportunity to lead a management buy-out at a small European airline subsidiary. He now plans to turn the soon-to-be Superjet 100 operator into a profitable and growing brand in its own right.

5 August 2015 5 min read
<p><img alt="WW - 2015028 - Arthur Smith" src="/getasset/d2dd5227-cf1d-4d3e-9b56-39faf7f848de/" /></p>

<p>Arthur White had the opportunity to lead a management buy-out at a small European airline subsidiary. He&nbsp;now plans to turn the soon-to-be Superjet 100 operator into a profitable and growing brand in its own right.</p>

<p><img alt="Arthur Smith - WW 20150428" src="/getasset/b9089789-26d0-4c81-a36e-3466689ef247/" style="line-height: 20.7999992370605px; width: 250px; height: 206px; margin: 0px 10px; float: left;" /></p>

<div><strong>How did your career in the&nbsp;aviation industry begin?</strong></div>

<p><em>Like a lot of young lads, I was very&nbsp;interested in aircraft and always&nbsp;wanted to be a pilot. I was fortunate&nbsp;enough to go through pilot&nbsp;training and qualify as a commercial&nbsp;pilot by the age of 20. I’ve&nbsp;flown over 14,500h with a variety&nbsp;of airlines, and have also trained&nbsp;as an instructor and examiner. I&nbsp;then progressed to flight and safety&nbsp;management, where I gained a&nbsp;lot of experience in managing&nbsp;industry relationships. Then&nbsp;came the opportunity to invest&nbsp;in VLM Airlines.&nbsp;</em></p>

<p><strong>Tell us about your current role&nbsp;</strong></p>

<p><em>My role as chief executive and&nbsp;majority shareholder came about&nbsp;through a very unusual situation,&nbsp;as the airline was previously&nbsp;owned by Air France-KLM.&nbsp;</em></p>

<p><em>When the parent group decided&nbsp;to sell CityJet, of which VLM had&nbsp;been a part, I saw a chance for a&nbsp;management buy-out and the opportunity&nbsp;to rebuild VLM Airlines&nbsp;into a successful mediumsized&nbsp;regional airline. Starting up&nbsp;what is effectively a new airline&nbsp;is far more inspiring than closing<br />
one down.</em></p>

<p><strong>What challenges does a small to&nbsp;medium-sized airline face&nbsp;within a consolidating market&nbsp;like Europe?</strong></p>

<p><em>There are three functions or elements&nbsp;you have to focus on to&nbsp;build a successful business: cost&nbsp;control, revenue generation and&nbsp;staying liquid. A lot of the cost&nbsp;control was done before I bought&nbsp;the company. Revenue generation&nbsp;is key, and starting new&nbsp;scheduled services – while keeping<br />
as much aircraft, crew, maintenance and insurance (ACMI)&nbsp;and charter presence as we can –&nbsp;means we are actively generating&nbsp;revenue. Also, starting from a position&nbsp;of not having significant&nbsp;debt means we can grow and expand&nbsp;without having to look for&nbsp;financial investment.&nbsp;</em></p>

<p><strong>Why did you select the Sukhoi&nbsp;SuperJet 100?</strong></p>

<p><em>We selected the SSJ100 LR for its&nbsp;passenger comfort, flexibility in&nbsp;short-to medium-range destinations&nbsp;and low operating costs.&nbsp;We looked at a number of aircraft&nbsp;types in the 100-seat category&nbsp;and the SSJ100 LR won hands<br />
down. It is a wide aircraft that&nbsp;can seat five abreast and has the&nbsp;capability for a full business&nbsp;class&nbsp;configuration.</em></p>

<p><strong>What does your working week&nbsp;look like?</strong></p>

<p><em>Horrendous is the word that&nbsp;comes to mind! It’s only been a&nbsp;few months since I bought the airline&nbsp;and it has been a transitional&nbsp;year. A standard week starts early&nbsp;on a Monday morning and generally&nbsp;runs until late on Friday afternoon,&nbsp;with the occasional call&nbsp;and email at the weekend. </em></p>

<p><em>I’m a&nbsp;strong believer in a chief executive being present at the company&nbsp;headquarters and making sure&nbsp;your presence is felt on a day-today&nbsp;basis. However, I do have to&nbsp;visit airports and suppliers,<br />
which often results in one or two&nbsp;days out of the office each week.</em></p>

<p><strong>What do you enjoy most about&nbsp;your job?</strong></p>

<p><em>The creative element – it allows&nbsp;me to see that in the next 12-18&nbsp;months, the company can be&nbsp;transformed from having been&nbsp;part of a large&nbsp;international air&nbsp;group to becoming a credible regional&nbsp;airline. The other thing I&nbsp;enjoy is the growing confidence&nbsp;of the people who work at VLM&nbsp;Airlines. They are starting to believe&nbsp;in the bright future I see for<br />
the airline.&nbsp;</em></p>

<p><strong>What is your vision for VLM over&nbsp;the next five years?</strong></p>

<p><em>I would like VLM Airlines to be&nbsp;highly profitable because, at the&nbsp;end of the day, that’s why we’re&nbsp;all in business. I also anticipate&nbsp;having a fleet that is a mix of jet&nbsp;and turboprop aircraft used&nbsp;across our three markets. Lastly,&nbsp;I would like to see growth in the&nbsp;number of aircraft in the fleet,&nbsp;with some 100-seat jets, along&nbsp;with a fleet of around 10&nbsp;turboprops.</em></p>

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