Air Partner and Gama Aviation results reveal difficult market

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The interim results for business aviation services groups Air Partner (AP) and Gama Aviation reveal the challenges facing private aviation, as the sector continues to recover from the Covid-19 global pandemic.

Air Partner reported a 61% gain in profit for the six months to July 31st – up from £17.2m in July 2019 to £27.7m in July 2020 – owing to “excellent performance in group charter and freight divisions”. The charter division grew 70% year-on-year from £15m to £25.5m, driven by the exceptional demand for emergency Covid-19 and personal protective equipment (PPE) supply flights.

However, the company’s core private jet operations gross profit was down by 23.3% from the same period last year – reflected by a decrease from £6m to £4.6m.

Although private jet owners have increasingly chosen to use their aircraft for family holidays in the past six months, the numbers reflected from private jet travel, on paper, do not necessarily match this demand.

Air Partner’s JetCard programme, despite 50% higher in sales, took a 5% dip in cash to £17.6m from last July’s figures. Scheduled Group Travel and Tours Operations both saw significant downturns in performance as well.

Mark Briffa, CEO, Air Partner, said the company’s private jet dealings had been severely impacted by the pandemic, although activity levels were slowly starting to return. This is after the company had installed a cost-cutting plan in April this year.

Air Partner also entered the Australian market, via a new contract with security solutions company Redline Assured Security and Managed Services, in June this year. The interim results show a direct impact of this acquisition on the 6% rise in profit, in its Safety & Security division.

Gama Aviation’s ground division

Meanwhile, Gama Aviation’s ground division was impacted by a pandemic-related reduction in FBO and MRO revenues and an absence of the one-off gains seen in the previous year.

Gama reported a loss in the first half of the year, with a pre-tax loss of $4m, compared with a profit of $2.2m a year earlier. Revenue fell to $109.2m from $121.8m. Liquidity remains strong with $18.1m cash.

Th results show that partner China Aircraft Services Limited also suffered substantial losses due to vastly reduced commercial aviation volumes at Hong Kong airport, resulting in $2m in losses.

Gama Aviation’s CEO, Marwan Khalek said: “We have continued to drive our business forward with long-term contract wins in the special mission division and sizeable maintenance inputs into our Bournemouth maintenance facility. “

In its Global Services Division, subsidiary myairops secured a $2.5m Software as a Service (SAAS) contract in March, with one of the world’s largest business aviation operators. While the company was awarded two contracts to provide air ambulance services for a minimum of five years. Also in March, the company announced its sale of minority investment US Air associate, for a total of $33m, to Wheels Up.

Gama acknowledged the outlook remained highly unpredictable but reported stable trading for its third quarter, which ends in September. Air Partner has seen an increase in private jet enquiries for the same quarter.

Click here for more details about Air Partner’s and Gama Aviation’s interim results.

Commenting on Air Partner’s interim results

Meanwhile, Canaccord Genuity, a UK equity research firm, said diversification had benefitted the company during the Covid-19 crisis.

Analyst Gert Zonneveld said: “Strong H1 [first half] performances in group charter and freight more than offset the weakness in private jets and some areas of Safety & and Security clearly demonstrating the value of the group’s diversification strategy.”

Air Partner and Gama Aviation results – at a glance

Air Partner

-Adjusted EBITDA up 6.7% to £1.6m

-Adjusted EBITDA margin up 21.4% to 5.6%

-Operating profit maintained at £0.1m

-Loss before tax of £0.5m

-Net debt of £10.9m on June 30th 2020

-Cash of £3.0m on June 30th, 2020

-Bank facilities improved, and balance sheet was strengthened to provide resilience against Covid -19 uncertainties

-Record order book on September 22nd 2020

-Total order book increased £11.1m, up 26% since June 30th, 2020, with 24% increase in current year.

Gama Aviation

-Adjusted EBITDA up 6.7% to $1.6m

-Adjusted EBITDA margin up 21.4% to 5.6%

-Operating profit maintained at $0.1m

-Loss before tax of $0.5m

-Net debt of $10.9m on June 30th 2020

-Cash of $3.0m on June 30th 2020 ($5.5m at June 30th 2019)

-Bank facilities improved, and balance sheet was strengthened to provide resilience against Covid -19 uncertainties

-Record order book at September 22nd 2020

-Total order book increased $11.1m, up 26% since June 30th, 2020, with 24% increase in current year.