Vista Global Holding has agreed to buy Jet Edge, the eighth largest operator in North America based on fractional and charter flight hours. Vista, which is a major player globally, was already fourth in 2021 based on flight hours from operators it owns stakes in, which includes VistaJet, XOJET, Red Wing and Talon Air. The deal, when it closes, will create a three-way race between Directional’s Flexjet, Wheels Up Experience and Vista for second place in the world’s biggest market for private jets. Berkshire Hathaway’s NetJets is the largest.
It’s the 10th M&A deal in 2022 involving charter operators and brokers that sell membership programs, Vista’s second for the year and the fourth this week. Last month, Vista said it is buying Air Hamburg, a major European operator. Combined with deliveries of new Bombardier Global 7500s and Challenger 350s for its VistaJet brand, 100 super-midsize and large-cabin jets from Jet Edge, and continued acquisition of used jets, Vista’s fleet should grow to more than 350 aircraft by year’s end. Still, the top 30 companies control just 53.9% of the market, with 45.1% held by the top 10.
After taking delivery of VistaJet’s 10th Bombardier Global 7500 Monday during a ceremony in … [+]
Like its acquisitions of XOJET, Red Wing and Talon Air, Dubai-based Vista will buy the airplanes, leases, management contracts and other assets but hold a minority interest in the operator to comply with foreign ownership restrictions.
In an interview yesterday from his London office, Vista Founder and Chairman Thomas Flohr says he expects to use the time until the deal closes to begin the process of aligning Jet Edge with his XO and VistaJet brands. VistaJet’s focus is a global fixed-rate, guaranteed availability membership it calls the Program. XO sells jet card memberships that offer dynamic and fixed pricing. It also allows members to buy and sell unused seats on crowdsourced flights and single seats on scheduled flights that operate between private jet terminals. Jet Edge has been transitioning from wholesale to a retail model, launching its Reserve membership program last year and quickly reaching the $100 million sales mark. After beginning with dynamic pricing, Jet Edge added discounted cross-country rates and has been expanding its fixed and capped rate programs since. It is currently adding a guaranteed availability product. Previously, its programs were all as available.
“Vista’s commitment is to provide the most comprehensive range of flying solutions in private aviation. Today’s announcement brings significant value to our clients, with access to a further 100 aircraft, expanding our fleet at a time of unprecedented demand for business aviation services. Our vision is to provide the best services, anytime and anywhere, for every customer. Bringing Jet Edge, the fastest-growing large-cabin and super-mid on-demand company in the U.S., into the group scales up our presence in North America, giving Vista the opportunity to turbocharge growth in the most dynamic business aviation market. It also means expanding our offering and presenting our members with the chance to fly on the largest fleet of Gulfstream aircraft available for charter,” Flohr said in a statement.
Beyond the airplanes and the members, Vista will also gain an MRO with “a full suite of maintenance services to a wide range of aircraft types, augmenting the maintenance capacity across the U.S. and securing better access to parts.” Record demand, which is keeping airplanes in the air more, has increased the need for more maintenance capacity, both for regular checks and when there are mechanicals.
Jet Edge’s management will remain in place and CEO Bill Papariella becomes Chief Business Officer for the group.
While independent brokers say previous deals resulted in decreased availability of the acquired operators’ fleets as capacity was redirected to members of their new owners’ jet membership programs, several say they are less worried this time. “I see Jet Edge’s empty legs. They are adding lots of planes, and they have dozens of empty legs every day. They need us to fill those flights,” says one broker.
Another says outside of holidays, there hasn’t been the same rabid demand for large-cabin jets, the foundation of the Jet Edge fleet. “The new because of Covid private flyer is looking for the most cost-effective aircraft for their trips. Most of those flights are one to three hours and most of the time it is two to six passengers and maybe pets. They are mainly chartering light and midsize jets. You don’t need a Gulfstream for that.”
The terms of today’s deal weren’t announced. However, Flohr says KKR, which had provided over $265 million in funding to Jet Edge since last June, is exiting as part of the transaction. The deal is expected to close next quarter.
Separately, Flohr says he may accelerate Global 7500 deliveries for VistaJet. After receiving his 10th on Monday, he says he may now add 10 more this year, instead of the seven that were already announced. He is also adding two 16-seat Challenger 850s that will be used for XO’s by-the-seat scheduled flights between New York and South Florida.