California-based Phenom 100 charter operator JetSuite is resuming expansion after securing additional capital from two new owners.
JetSuite has announced that Acadia Woods Partners, a New York-based investment group, and David Neeleman, the founder of JetBlue Airways and Brazilian low-cost carrier Azul, had purchased stakes in the company. The original owner, Proctor Capital Partners, continues to own an undisclosed amount in JetSuite, which launched operations in 2009.
JetSuite chief executive Alex Wilcox says the new capital will partly be used to fund the acquisition of five additional Phenom 100s, growing JetSuite's fleet to 12 aircraft by the end of the year. JetSuite operates seven Phenom 100s, five of which are mortgaged while one is managed and one is leased.
© Jet Suite
JetSuite is the world's second largest Phenom 100 operator after Missouri-based Executive AirShare, which has 10 of the type with 38 more on order.
When JetSuite first placed an order for 50 Phenom 100s plus 50 options in 2008 it envisaged a steady delivery stream of one aircraft a month. But after taking the first six aircraft from this order between September 2009 and January 2010, JetSuite deferred additional deliveries because of the economic downturn and aircraft financing challenges.
Wilcox says demand has now reached a point where JetSuite is confident it can resume expansion and the deal with Neeleman and Acadia Woods gives it the capital needed to comfortably expand the fleet.
"Demand for our product is strong. We need the next five airplanes now," Wilcox says, adding revenues have been growing 20% every month since February.
Wilcox says demand has been "building strongly" as business jet users become familiar with the JetSuite brand and as the economy has started to rebound. As the economic recovery is tepid, business aircraft customers are turning to charters rather than investing in new aircraft and are opting for smaller more economical jets such as the Phenom 100.
"The market is definitely shifting towards the branded charter model," Wilcox says.
But Wilcox says under a revised delivery schedule negotiated with Embraer, JetSuite has no plans to take any aircraft in 2011. He says for now deliveries will resume in 2012 with only one aircraft every two months, although he plans to look again at this plan next year.
"We'll see what market tells us," Wilcox says. "I think the growth rate will accelerate as we grow."
While JetSuite will use the next batch of five aircraft to expand its presence in Texas it still aims to eventually operate nationwide. "There's no doubt the biggest market is the East Coast but it's also the worst weather and has the most competition," Wilcox says.
"We're pretty happy in the south-west. The weather is good and the geography suits us. We're in no rush to get east but we'll get there eventually," he adds.