VIP aircraft charter and sales company Avolus is embarking on a two-year expansion strategy that will see the UK-headquarted company establishing bases in China, Monaco and Russia for the first time.
The move comes as Avolus severs its ties with Romanian business aircraft services provider Eurojet. The two companies formed a partnership in 2009 to exploit the burgeoning demand for business aircraft travel within Russia and the CIS.
"The partnership was not working for us," says Avolus founder and chief executive Alexis Grabar. "Many of our high-net-worth clients were not happy flying with a Romanian operator. It didn't matter to them that it was a well-managed, professional company. Our customers had a [negative] image of a Romanian operator, and this perception was hard to change."
He says they had hoped to secure around five flights a week through Eurojet, "but we only averaged around one."
Avolus is keen to align itself with a business aircraft services provider in western Europe with links to Russia, China and the US, and is in talks with a number of companies, Grabar says. He is eager to secure a solid, long-standing partnership with a large, established operator. Europe's charter industry, he fears, has become fragile over the past two years, with many companies now on the brink of collapse.
"The European charter market has been hit badly by the economic downturn, and many of the smaller players - those with fewer than five aircraft - will not survive," Grabar says. "We are going to see a lot of consolidation in this marketplace over the next year or two. Only companies with around a €5m turnover and a fleet of five aircraft or more will not fold."
Avolus purchases around 1,500 hours of charter time from around three to five operators - including VistaJet and Ocean Sky - and then resells the time to its clients with a 10% margin.
Around half of Avolus's demand is for large, long-range business jets, with the mid-sized and light cabin sectors accounting for 30% and 20% of its charter activity respectively.
"We plan to establish a base this year in Russia and in China - probably Hong Kong - by the end of 2012," says Grabar.
"These regions have traditionally had significant barriers to entry for both charter and aircraft sales. Increased globalisation, regulatory liberalisation and the growing influence of the super-affluent in these regions are uncorking significant pent-up demand."
Source: Flight International