Silver Airways signs LOI for up to 50 ATR-600 series turboprops

Fort-Lauderdale, Florida-based Silver Airways took significant steps toward a long-term goal to become a major US airline by announcing its intention to purchase up to 50 ATR-600 series turboprops, valued at a potential $1.1 billion if all options are taken.

Silver’s initial order is for 20 ATR 42-600 aircraft, the 46-50 seat model; the letter of intent (LOI) signed Aug. 1 provides Silver the ability to upgauge to the larger 68-78 seat ATR 72-600 model. The firm 20 ATR 42-600 aircraft will be lease-financed by Silver, the company said.

Silver will be ATR’s first North American customer for its -600 series turboprops. ATR will conduct Silver’s crew training on its -600 series full-flight-simulator at ATR’s new training facility in Miami.

Silver plans to take delivery of up to four of the new ATRs in the fourth quarter of 2017, following regulatory approvals. Delivery of the remaining 16 aircraft should be completed by first-quarter 2020, the company said. The new aircraft will gradually replace Silver’s existing fleet of 21 34-seat Saab 340B Plus turboprops “over time,” the company said.

Concurrently with its LOI announcement, Silver said it has entered into negotiations with San Juan, Puerto Rico-based Seaborne Airlines to explore commercial cooperation and a potential “combination.” Seaborne provides connections throughout the Caribbean via its San Juan hub; the company is majority-owned by Philadelphia-based investment firm Versa Capital.

Silver also announced the appointment of new CEO Steven Rossum, effective Aug. 8. He succeeds Sami Teittinen, who is leaving the company for personal reasons. Rossum has been serving as Silver’s external general counsel and fleet transactions advisor and has had an extensive career in aviation legal and financial management at Pinnacle Airlines, Air Tran Airways, DHL Airways, among other airlines. Additionally, Silver also promoted EVP-commercial and CFO Jason Bewley to president and CFO of the company.

“The momentum of our airline, as demonstrated by the order for new ATR-600 series aircraft [and] the potential for Caribbean expansion … were the key reasons I decided to join Silver,” Rossum said. “[We] are fully focused on safety, reliability, growth and working toward fulfilling Silver’s promising future.”

“This aircraft acquisition is a monumental leap forward for Silver … and will allow us to expand our network with greater reach, including further into the Caribbean and the southeastern US,” Bewley said.

“Silver’s detailed evaluation vindicates our belief that the ATR 42-600 is the obvious aircraft … to upgrade older 30-50 seat regional fleets,” ATR CEO Christian Scherer said. “The traveling public in the US will discover that … flying on board a modern prop-jet bears no comparison to the regional aircraft of yesteryear.”

Silver Airways is a codeshare partner with New York-based JetBlue Airways, Chicago-based United Airlines and Colombian carrier Avianca. Silver also has interline agreements with Dallas/Fort Worth-based American Airlines, Atlanta-based Delta Air Lines, Air Canada, Alaska Airlines, Bahamasair, Germany’s Hahn Air, Azul Brazilian Airlines and Japan’s All Nippon Airways.