Jet Aviation executives have made the short trip to Geneva this year weeks after signing off on the company’s largest-ever acquisition, Australian fixed-base operation, maintenance, repair and overhaul, and aircraft management outfit Hawker Pacific.
It is the biggest development for the 51-year-old, Zurich-headquartered business aviation services company since it was itself bought by Gulfstream owner General Dynamics a decade ago. Hawker Pacific’s 19 locations – almost all of them in the Asia-Pacific – give Jet Aviation a major footprint in the fastest growing region for corporate aviation for the first time, and, as chief executive Rob Smith explains, take it into new business areas including fleet management for the Australian military and rotary support.
Smith and his team are now embarking on an effort to meld the two businesses, although – back office functions excepted – he believes there will be little overlap. The one apparent clash is at Singapore’s Seletar airport where Jet Aviation’s flagship Asian FBO sits next door to that of Hawker Pacific, where only in February a major expansion project was announced.
However, Smith – a General Dynamics veteran of 29 years who has led Jet Aviation for around a fifth of that time – insists there is little duplication in the brands each business specialises in. “The maintenance operations are complementary,” he says. “Other than location, there is very little direct competition out of Singapore.”
Jet Aviation, which is strongest in Europe, North America and the Middle East, is likely to use the Hawker Pacific presence in Asia – the Australian company has maintenance operations in the Philippines, Hong Kong, Indonesia and Malaysia, as well as FBOs in four Australian cities and Shanghai – as a springboard for further expansion in that region. China in particular sounds promising – it is a market in which all the international FBO and MRO chains have failed to make an impact even as the country’s breakneck growth has spawned a new breed of business jet-owning billionaires.
“Hawker gives us access to the Shanghai market, but that’s all, and there is certainly more opportunity there,” says Smith. “There are other areas we are not in, such as India, so there is quite a bit of the business aviation market [in Asia] that we could look to expand.”
While Smith admits that merging Hawker Pacific will take up a lot of management energy, the company has not halted other expansion projects. In Basel, home to Jet Aviation’s completions centre – where more than 200 green business aircraft have had cabins installed since 1977 – a fourth widebody hangar will open by the end of the year. This will give Jet Aviation – one of a handful of specialists worldwide in completions of Airbus and Boeing corporate aircraft – much needed capacity.
“We’ve been turning away work and that’s not ideal in this market,” says Smith. Completions can be a precarious business and entry barriers are high. While lucrative projects rely on vastly experienced technicians and can take between one and two years, those same craftspeople need to be kept busy during leaner times, or they will take their skills elsewhere.
For now, despite the decade-long lull in deliveries of airliner-derived and large-cabin business jets, Jet Aviation has its hands full. It is due to deliver on two contracts by the end of the year – a pair of Boeing 777s and an Airbus A330. While Smith anticipates a lull when these aircraft depart, he says Jet Aviation has contracts for four more aircraft – three narrowbodies and its first Boeing Dreamliner – a 787-8 – to undergo completion.
“We have work stacked for two years and are bidding for a lot more,” says Smith. The arrival of the Airbus A320neo and the Boeing 737 Max has re-opened demand for narrowbody business jets, he believes. He is confident that Jet Aviation can fill any downtime between green aircraft completions with heavy maintenance or cabin refurbishments. “The market for those is very good right now,” he says.
Elsewhere in the business, Jet Aviation has been investing in its FBO network, now at 30 locations worldwide with the addition of seven Hawker Pacific sites. It is opening new facilities in Teterboro, New Jersey, and Van Nuys, California, the latter a joint venture with Gulfstream’s MRO operation.
“We have an awful lot of growth planned,” says Smith. “White areas”, he notes, include Africa and South America as well as key cities in Europe: Jet Aviation has no presence in two of Europe’s business aviation hubs, Paris and London, after shutting its Biggin Hill FBO in the UK capital. “London and the UK are still very much on our target list,” says Smith.
The other parts of the group – aircraft management and aviation personnel – are also continuing to grow, says Smith. Jet Aviation manages 260 aircraft on behalf of owners, with the US market continuing to improve and “pockets of strength elsewhere”. The company has just established a Maltese air operator’s certificate, giving owners the option of having their aircraft supervised by the regulatory authority of the Mediterranean island state. Jet Professionals – a service set up 10 years ago chiefly to recruit and supply pilots and cabin crew for Jet Aviation’s own managed aircraft – has also expanded into a thriving third-party skills agency, and “has had a couple of very solid years”, says Smith.
Since General Dynamics bought Jet Aviation from the founding family in 2008, the company has had to battle perceptions that it favours its sister company Gulfstream. In fact, Bombardier recently withdrew Jet Aviation’s authorisation as a service provider, something Smith is convinced was “political” rather than performance-related.
He insists the company remains proudly brand-agnostic. “We are very proud of the fact that we support Bombardier, Airbus, Embraer and Dassault,” he says. “Gulfstream is a large customer but it’s not our largest, and from a customer and OEM standpoint, we feel our actions and track record speak for themselves.”
Source: Flight Daily News