Cityjet pre-tax profits rose to €4.86m n 2022.. The airline reached a €627,000 settlement with the Revenue Commissioners over a dispute regarding the payroll tax status of its non-Irish resident cabin crew members.
The settlement may impact the airline’s financial standing, but the increase in profits suggests overall operational performance has improved despite the tax controversy.
Revenues rose by 83pc, increasing from €71.6m to €131.07m in 2022. Regarding a €627,000 settlement with Revenue, a note details that CityJet was assessed by Revenue for a tax deficiency under section 127B of the Taxes Consolidation Act 1997 for the period from January 2015 to March 2020.
The note indicates that the Revenue Commissioners argued that this section allows them to require Irish airlines to apply Irish payroll taxes to non-resident individuals working on their aircraft, even if those individuals already pay payroll taxes in their home countries. CityJet DAC previously appealed this assessment before the Tax Appeals Commission, believing the assessment to be invalid. In 2022, a final agreement was reached with the Irish Revenue Commissioners concerning the €627,000 exceptional cost.
During the same year, CityJet operated a fleet of 22 CRJ900 aircraft, primarily under wet lease contracts for SAS Scandinavian Airlines, with aircraft and crews based in Copenhagen and Stockholm, and the company has since expanded. The group’s main activities involve ACMI (aircraft, crew, maintenance, and insurance) or wet lease contract flying, and since 2018, all CityJet flights have been operated on behalf of customer airlines, as the company does not conduct scheduled flights under its own brand.
The directors noted that the group’s total revenues surged by 83pc in 2022, largely due to the easing of air travel restrictions. Employment numbers grew from 453 to 582, with staff costs nearly doubling from €25.2m to €45.5m.
The total aircraft rental bill amounted to €24.8m, while aircraft maintenance, materials, and repairs costs were €38.9m. Revenue breakdowns reveal that €20.63m was generated in Ireland and €110.4m in Sweden. In 2023, the group’s shareholders entered into an agreement with Air Investment Valencia SL aimed at achieving a scheme of amalgamation, which is expected to generate synergies and cost savings, particularly in aircraft maintenance expenses.
To further expand the business, CityJet signed operating leases for five CRJ 1000 aircraft for a three-year period in February 2023, with the first aircraft introduced in March 2023 and the remaining expected to join the fleet by August 2023. Additionally, in March 2023, the company signed ACMI lease contracts with two new airline customers for four lines of flying for the Summer 2023 season.
