Leading Europe's No1 ACMI airline – SmartLynx Airlines CEO Edvinas Demenius

Riga-based SmartLynx Airlines, one of the leading EUbased ACMI, charter, and cargo operators on Airbus A320, A321, A321F, A330 and Boeing 737 MAX8 aircraft, has a new CEO, Edvinas Demenius, but after having been a board member and Chief Commercial Officer of the airline for more than seven years, he hardly is new in the company. “SmartLynx has experienced massive growth over the past  years, and I am proud to be a part of the team. While in the journey with SmartLynx, I have experienced numerous moments that filled me with pride for our collective achievements,” E. Demenius, the CEO, told The Baltic Times Magazine.

By now, you must know all the nitty-gritty within the company. What do you believe are the most remarkable accomplishments of SmartLynx Airlines over the years? And was there anything you believed could be improved?

Thank you! Since my journey with SmartLynx began more than seven years ago, I have experienced numerous moments that filled me with pride for our collective achievements. At SmartLynx, we embrace a culture of continuous improvement and relentless pursuit of the next milestone, always pushing ourselves to reach new heights.

Reflecting on our journey, the resilience and unity we showed during the Covid-19 pandemic stand out as particularly praiseworthy. This period highlighted our agile business model and our ability to adapt swiftly—a vital asset in the ACMI sector. 

The rapid expansion of our fleet from 12 in 2020 to 49 in 2022 presented an immense challenge, enriching our experience and teaching us valuable lessons. These significant events have not only strengthened our resilience but also confirmed our leadership status in the global ACMI market, deepening our determination and commitment.

Thanks to the growing demand for ACMI passenger services in Europe and the company’s strategic efforts, in 2023, SmartLynx Airlines reported a record year, conducting 48 percent more flights carrying 53 percent more passengers than the year before. Is only the general positive trend in the ACMI sector behind the growth or the strategic decisions made by SmartLynx?

The increase in demand is due to a combination of factors. Since the pandemic restrictions were lifted and people slowly returned to their normal lives, naturally people wanted to continue traveling. At the same time, technical issues forced many airlines to ground their fleets, making them seek capacity management solutions externally. This combination, along with our strategic improvements in technical operations and fleet management, resulted in a record-breaking year for us. Looking ahead, we are committed to continuing this trajectory into 2024.

When taking over the reins of the company, you said this quote: ‘my focus will remain on improving operational performance to drive the company's growth and continue the expansion of counter-seasonal operations.’ Please elaborate more on this.

Over the past few years, our fleet has seen remarkable growth, expanding to as many as 70 aircraft. Moving forward, we aim to continue this growth in a steady and sustainable manner. While the aviation industry typically experiences its peak season from the end of March to the end of October, we have successfully achieved counter-seasonality, maintaining a busy schedule throughout the entire year.

Since we have developed a strong fleet, we can focus on shaping the processes to enhance technical reliability to maximize performance. While we intend to grow our fleet, such expansion will be aligning with aircraft availability and market demand.

As leaders in the ACMI sector, we are defining an industry benchmark for the product we offer. Our commitment to delivering the highest quality products to our clients is unwavering. Despite focusing on essential aviation services, we are driven by a relentless pursuit of excellence in all we do.

In 2023, the airline increased its fleet from 49 to 67 aircraft and is planning to continue the expansion to reach 100 aircraft by 2027. Are you acquiring them or leasing them? Will you have to depend on a bank loan to make it happen? 

Smartlynx is generally planning to continue fleet expansion, but in the next 2-3 years it will be very much driven by aircraft availability, which is restricted. Given OEM (original equipment manufacturer) delivery delays and general supply chain issues, there is a substantial aircraft shortage in the market. In these circumstances, SmartLynx is more focused on finding the right opportunities at the right level, rather than going to a pre-set fleet number. A 100 aircraft fleet is still the ultimate target, but when that could be achieved, will be very much driven by external factors. As of now, Smartlynx only leases aircraft and does not keep those on the balance sheet. All aircraft leases are financed from the operating cash flow.

What type of aircraft are you using? Some of the carriers in the region have made drastic changes to the composure of their fleet. Did you follow their suit? If not, is this something you may consider?

In ACMI, it is not healthy to have too complex a fleet composition, as it creates many additional costs and challenges. The aim is to keep the current fleet composition as we have a very strong ground now. SmartLynx was the first ACMI carrier to add Boeing aircraft to their fleet. We have 13 Boeings in our fleet, and it has allowed us to reduce fuel costs and noise levels, thus expanding our operations and geography.  Looking into the future, we are looking for opportunities to expand our Boeing MAX's fleet as well as looking into Airbus 320neo's.  

The local ACMI market is limited, so you must be setting your sights on international expansion?

Our goal is to expand and strategically plan our operations for the long term, yet we remain agile, seizing business opportunities as they arise. If the capacity will allow us and there is a good opportunity, we will go for it. Currently we see a potential in expanding our services – both ACMI and Cargo – in Southeast Asia and Africa, the Caribbean and other regions.  

What will be the defining moments for the ACMI sector in the short-term and long-term?

The growth of ACMI services is closely tied to the overall situation of the airline industry, reflecting a strong correlation with the aviation market's challenges. If the market maintains its growth and the economic climate remains stable, ACMI services will become a more integral component of our clients' long-term strategic planning. The last couple of years have taught us that we all, including aviation, must be able to adapt to various fluctuations, recognizing that predictability is never absolute.

How is SmartLynx Airline addressing objectives of sustainability, diversity and equality?

ESG principles are crucial to any business, especially in the aviation industry. At SmartLynx, diversity and inclusion are at the heart of our operations, with team members representing up to 85 different nationalities. Our global team embodies our dedication to recruiting specialists purely based on their expertise and experience, giving an equal opportunity to aviation talents worldwide. We're also proud to have achieved a gender balance of 40/60 in our company and to participate in the #IATA25by2025 initiative, which seeks to enhance the representation of women in various aviation roles.

A key sustainability milestone for us has been the incorporation of Boeing MAX aircraft into our fleet. These modern, narrow-body planes are celebrated for their fuel efficiency and extended range, marking a significant step forward in our commitment to environmental responsibility. Additionally, we have focused on the cargo sector by introducing A321F freighters, which boast a 30% reduction in fuel consumption compared to the 757-200 PCF, further underlining our dedication to sustainable aviation practices.

Who are the greatest people on your team?

I don't have a single doubt saying that each and every person in SmartLynx is the greatest asset we have. I feel strongly about our team and its capabilities. We have accomplished a lot, and I am absolutely sure we will achieve so much more.