Who owns the largest business jet operators and aircraft managers?

Alasdair Whyte

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

Business jet operator ownership

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.

Individuals with significant investments outside aviation  
Dermott Desmond Broking, online gambling, property ExecuJet Switzerland
Thomas Flohr Computer leasing VistaJet Switzerland
Manuel Lao Hernandez Gambling (Nortia Corporation) Executive Airlines Spain
Dr. Lutz Helmig Inherited(through ATON Gmbh) DC Aviation Germany
Sir Michael David Kadoorie Power generation (CPL Holdings) MetroJet Hong Kong
Andrew Lessman Vitamins(ProCaps Laboratories) TWC Aviation  US
Mansour Ojjeh and Aziz Ojjeh     Technology and others (Techniques Avant Garde SA) TAG Aviation Switzerland

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

Company Type Country Investor Date Amount ($million)
JetSuite VLJ US Tony Hsieh

Sep-11

7

JetSuite VLJ US David Neeleman, Arcadia Woods Partners

Oct -10

 
Keystone Aviation Services Operator US Rizvi Traverse Management, LLC, Starwood Capital Group Global, LP,

Aug-10

 
Nomad Aviation Operator Switzerland FAI acquired 60% as part of MBO

Jul-10

 
FAI rent-a-jet AG Operator Germany MIG Marfin Investment Holdings

Jun-10

 
XOJET Operator US TPG Growth, OCL (Abu Dhabi)

Oct-09

100

Flight Options Fractional US Directional Capital, Resilience Capital Partners

Mar-09

 
FAI rent-a-jet AG Operator Germany MIG Marfin Investment Holdings

Dec-08

 
JetBird VLJ Ireland Middle East trading group

Sep-08

15

Privatair US Operator US Gama Holdings (33% owned Growth Gate and Crescent Investments,

Jul-08

 
BJETS Air taxi Singapore Briley Group, The Indian Hotels Company Limited (Tata Group)

Feb-08

 
Gama Holdings Ltd Operator UK Growth Gate, Crescent Investment Ltd

Jan-08

 
Gama Middle East and Africa Operator UAE Growth Gate, Crescent Investment Ltd

Jan-08

 
Blink VLJ UK Sir Peter Ogden, Celox SA, one other

Dec-07

30

Flight Options Fractional US H.I.G. Capital

Nov-07

 
Pegasus Elite Aviation Operator US Merrill Lynch, Pegasus Blue Star Fund.

Aug-07

400

DayJet Operator US new investors including eight institutions and private equity funds as well as numerous individuals

Mar-07

50

DC Aviation Operator Germany Aton Gmbh (family fund for Dr. Lutz Helmig)

Jan-07

 
JetBird VLJ Ireland Conrado Dornier

Nov-06

 
JetBird VLJ Ireland Claret Capital

2006

45

JetSuite VLJ US Claret Capital

2005

 
Pogo Jet VLJ US Julian Robertson  Tiger Management ($4 million), William Rutledge, former CEO of Teledyne ($3 million), Don Burrs/Robert Crandall ($1 million combined)

2005

8

DayJet VLJ US Various including Gates foundation

2005

68

Empire Aviation Group Operator UAE Dubai International Financial Centre Investments, Zabeel

Nov-07

 
Dexter Air taxi Russia International Finance Corporation (World Bank)

May-06

15

Sentient Jet Operator/Cards US Macquarie Global Opportunities Partners

Sep-08

 
Keystone Aviation Services Operator/FBO US Rizvi Traverse Management

Aug-08

 
Landmark Aviation Operator/FBO US Encore FBO, GTCR Golder Rauner and Platform Partners

Mar-08

435

JetDirect Aviation Operator/FBO US Brantley Partners, HSBC Private Equity, ABS Capital Partners V, AIG Co-Investment Fund

Sep-06

100.2

Keystone Aviation Services Operator/FBO US Rizvi Traverse Management

2004

 
ExecuJet Operator/FBO/MRO Europe, South Africa Dermot Desmond

May-07

 
National Air Services Operator/Fractional Saudi Arabia Kingdom Holiding Company

Jul-08

 
Jet Republic Fractional Portugal European American Investment Bank (Euram), Grupo Salinas,  Jonathan Breeze (founder), private investors

Jun-08

 

Source: Corporate Jet Investor

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

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