Blink and it’s gone
If you do not live in the UK, it is hard to imagine how much Brexit is dominating the news. Two years after the shock result, there is still no clarity about what the UK government wants to achieve in negotiations with the European Union (the Cabinet is actually meeting today to try and agree on a basic policy). In the last few weeks, businesses including Airbus, BMW and Jaguar Land Rover have said that the uncertainty is freezing investment.
This uncertainty is arguably worse for business jet operators trying to Brexit-proof their operations. When your business is already losing money, it is simply not worth the hassle.
Wijet, the European air taxi company, says it has had enough. It bought Blink, Britain’s largest air taxi company, in September 2016 (three months after the UK voted to leave the European Union). It now plans to close down the UK operator and hand back its Air Operator’s Certificate. It is blaming Brexit.
“Owning an Airline Certificate, especially in view of the Brexit, is not a competitive advantage,” says Jean François Hochenauer, member of the executive board of Wijet Holdings.
Wijet had been in talks about buying Blink for a year before the referendum. After the result it withdrew its offer, but when Blink’s owners cut the asking price, they decided to go for it.
It is a decision they now regret.
Wijet says that Blink’s model is outdated. It says that customers want to fly with more than four passengers, and often further than the range of a Citation Mustang– especially in Winter, to places like Morocco and the Canary Islands. (Rival air taxi companies clearly disagree with this). The company also failed to properly integrate Blink’s UK business into Wijet.
An official at Wijet stresses that it will honour any jet card deposits from UK customers and pay July salaries to UK staff. The UK accounts for just 9% of Wijet’s sales.
Wijet now wants to replicate the Wheels Up model of outsourced operations in Europe.
It still plans to take delivery of the 16 HondaJet aircraft it ordered in March (it already has two) but will ask an AOC holder to operate these aircraft (as Gama Aviation does for Wheels Up). In the next few months it plans to rely on third party charter and use just two or three Mustangs (it has just four left from the fleet of 15 Mustangs it once had). The company is in talks with investors and confident that it has a business model that will work.
It is unfair to blame the closure of Blink entirely on Brexit. Blink was losing money – and upcoming heavy maintenance checks and finance balloon payments sped up the decision – but it was a factor.
One good thing to come from this is that other UK operators now have some more ammunition when trying to get politicians to listen. Whatever anyone’s political views, business aviation companies need to know what is planned.