Silver Airways announced several strategic developments that will enable its continued growth.
Silver announced a historic agreement by signing a letter of intent to renew and expand its fleet with up to 50 new ATR-600 series aircraft. This is a significant strategic accomplishment for the airline and a transaction valued at up to $1.1 billion. The initial order is for 20 ATR-42-600 aircraft and the agreement also provides Silver the ability to upgauge to the larger series ATR-72-600s. With this deal, Silver becomes the first fully independent U.S. regional airline in more than 20 years to sign a new aircraft deal of this magnitude. The firm 20 aircraft will be lease financed by Silver.
“Thanks to our incredibly dedicated and hardworking team, this aircraft acquisition is a monumental leap forward for Silver, our team members, and our passengers, and will allow us to expand our network with greater reach, including further into the Caribbean and the Southeastern United States,” said Jason Bewley, Silver Airways’ President and CFO. “As the world’s leading regional aircraft, new ATRs will provide Silver’s passengers unparalleled experience and reliability and our pilots the industry’s most advanced cockpit. Silver is honored to partner with ATR as its North American launch customer for these technologically advanced aircraft.”
Christian Scherer, ATR’s Chief Executive Officer declared: “Our thanks and congratulations go to our new customer Silver Airways. Silver’s detailed evaluation vindicates our belief that the ATR42-600 is the obvious aircraft of choice to upgrade older 30-50 seat regional fleets. We are excited that the travelling public in the U.S. will discover that, when they are onboard an ATR -600 series, flying on a modern prop- jet bears no comparison to the regional aircraft of yesteryear – it is as comfortable and affordable as regional flying gets!”
Silver will take delivery of up to four ATRs this year starting in the fourth quarter following receipt of regulatory approvals. Remaining deliveries of the first 20 aircraft are expected to be completed by the first quarter of 2020. Crew training will be conducted by ATR at its new training facility in Miami, which is home to a new Full Flight Simulator (FFS) for the ATR-600 series aircraft.
The new aircraft will replace Silver’s existing fleet of 21 Saab 340B Plus turboprop aircraft over time.
Concurrent with the announcement of its upgraded fleet, Silver also has named Steven A. Rossum as its new Chief Executive Officer, effective August 7, 2017. Mr. Rossum replaces Sami Teittinen, who has decided to leave Silver for personal reasons. In addition, Jason Bewley, presently Executive Vice President of Commercial and CFO, has been promoted to President and Chief Financial Officer of Silver in recognition of his valuable contribution to bringing the company to this stage of development.
“Although it was a very difficult decision to leave Silver as it enters this exciting new phase of growth, it has been a privilege to lead Silver for these past four years and to see many tangible results of our efforts,” said Silver Airways President and CEO Sami Teittinen. “I leave knowing that Silver is in the right place both strategically and tactically to continue to execute its plans under the leadership of Steve, Jason, and the team. Most importantly, I have complete confidence that the Silver brand and our 700 team members will continue to grow and thrive as the Company enters this exciting new chapter.”
Mr. Rossum, who most recently served as a Partner at Smith, Gambrell & Russell, LLP, and as the Chief Executive Officer and a Managing Director of that law firm’s aviation consulting business, is an experienced aviation executive with a proven track record of leading improved operational and financial performance at regionally focused airlines. He has been serving as Silver’s external general counsel and fleet transactions advisor and he was a senior executive at Pinnacle Airlines in connection with its successful restructuring and emergence as a subsidiary of Delta Air Lines. He also was General Counsel of AirTran Airways, Reno Air, and DHL Airways and held Chief Financial Officer and other senior financial management positions at AirTran, National Air Cargo, and ASTAR Air Cargo. He holds B.A. and B.S. degrees from the State University of New York at Binghamton and a J.D. degree, with distinction, from Emory University School of Law.
“Silver is at an exciting and very promising point in its ongoing strategic plan, and I am very pleased to have the opportunity to join this excellent team of aviation professionals,” said Mr. Rossum. “The momentum of our airline – as demonstrated by the order for new ATR-600 series aircraft, the potential for Caribbean expansion, and our amazing team members – were key reasons I decided to join Silver. The Company has made great strides over the past year, and we have more good things in store as we continue to upgrade our company across the board for the benefit of our passengers, employees and stakeholders. I look forward to working closely with the Silver team that works so hard for our passengers.”
“We want to thank Sami for his leadership and wish him the best with his future endeavors,” said Gregory Segall, Silver Airways Chairman and CEO of Versa Capital Management, LLC, whose affiliates own Silver. “And we welcome Steve to the team. He has been an important contributor to Silver’s recent accomplishments in a key advisory capacity, and he’s the right person to lead the company forward. Working in partnership with newly named President and CFO Jason Bewley and the rest of Silver’s management, we have a great team for the future.”
Finally, Silver announced today that it has entered into negotiations with Seaborne Airlines (“Seaborne”) to explore commercial cooperation including potentially a combination in support of its long-term goal to become a major U.S. airline. Seaborne is a San Juan, Puerto Rico-based air carrier serving destinations throughout Puerto Rico, the U.S. Virgin Islands, and other countries in the Caribbean. Seaborne provides connections throughout the Caribbean via the carrier’s hub in San Juan, while also serving as the most critical link between St. Croix and St. Thomas with the carrier’s seaplane operation. Versa Capital is the largest creditor of Seaborne as well as its majority owner.
Seaborne’s experienced and dedicated employees, portfolio of markets, and business partnerships could help facilitate Silver’s route network’s expansion into a variety of highly attractive flight destinations. Further updates will be provided as the evaluation of Seaborne progresses.
Mr. Rossum concluded: “My new colleagues and I are fully focused on safety, reliability, growth and working toward fulfilling Silver’s promising future. I am looking forward to working with the hardworking men and women of Silver as we take delivery of our new ATR-600 series aircraft, explore opportunities with Seaborne, and execute on a number of other strategic growth initiatives across the Company. This is truly an exciting time for our employees, passengers, and the communities we serve – I’m confident we’ll have more good news to share down the road.”
Consummation of the ATR fleet upgrade and certain transactions involving Silver with Seaborne remain subject to certain conditions including receipt of requisite regulatory approvals.