Who owns the largest business jet operators and aircraft managers?

The majority of business jet operators and managers are privately owned. But Corporate Jet Investor’s unique survey shows which individuals and private equity firms are investing in this market.

The business jet market is extremely fragmented. US ownership rules make it hard for European operators and with the exception on NetJets – which is planning a Chinese subsidiary and Gama Aviation – there are no truly global operators, or even companies equally strong either side of the Atlantic.

Corporate Jet Investor used a list of the 50 most active operators on Avinode’s Charter Marketplace. We also added a number of large Asian operators and managers including some that are not registered with Avinode.

Key facts

• Most operators are privately owned
• Although a number of operators are owned by rich investors the majority are run by their owner-managers
• Private equity companies are keen to invest in operators with deals likely to happen in 2012 and particularly 2013 and 2014

Ownership of 50 largest charter operators

Source: Corporate Jet Investor

Private owners

The most obvious acquisitions are privately owned companies and over 70% of the 50 largest charter operators are privately owned.

Private owners can loosely be split into two types: aviation entrepreneurs and individuals with significant investments outside aviation.

Aviation entrepreneurs like Clay Lacy, the founder of California’s Clay Lacy Aviation, were often pilots that decided to set up operations. The majority of private owned companies are like that. However, there is also a significant number of individuals that have made money in other industries and – with the exception of VisataJet’s Thomas Fohr – are less active owners.

Source: Corporate Jet Investor                                                                                  

Listed

Although there are aircraft managers that are subsidiaries of listed companies, UK operator Hangar 8 is the only listed business jet manager in the 50 most active operators. Dustin Dryden, the founder of and CEO, still retains 65% of the company. Dryden is another example of an aviation entrepreneur who chose to get a pilot’s license rather than attend university and founded Hangar8 using credit cards.

The only other listed aircraft manager we are away of is Perfect Aviation, which floated on the SIX Swiss Exchange in 2009.It manages aircraft for owners.

Airline subsidiaries and subsidiaries of larger companies

Delta Private Jets and Brazil’s TAM are the best known airline of operators. However, the fastest growing is DeerJet (also known as Beijing Capital Airlines) which is owned by Chinese conglomerate HNA Group, which also owns Hainan Airlines. It also launched Hong Kong Jet, run by Chris Buckholz, formerly of MetroJet.

NetJets (Berkshire Hathaway) and Jet Aviation (General Dynamics) are two other corporate operators.

Private equity

Operators and managers account for more than half of all transactions on Corporate Jet Investor’s database of significant investments into corporate aviation and this trend looks set to continue with several unannounced deals expected to close in early 2012.

A number of the larger operators are also looking at opportunities to acquire smaller operators but many potential sellers are waiting for markets to strengthen. Private equity companies expect more deals in 2012 and particularly 2013.

Significant investments in operators

Source: Corporate Jet Investor

The number of failed deals where investors chose to back very light jet operators is significant.