Gama Aviation went public in 2014 when it acquired Hangar8 which was already listed on London’s Alternative Investment Market. In theory, the reverse takeover gave the company access to more capital for acquisitions. At the time, Gama Aviation was managing all of Wheels Up’s King Air flights and the merged company had almost 150 aircraft under management. (It later sold its share of its US aircraft management business to Wheels Up.)

Many listed company CEOs believe that the market does not truly understand or value their business. But Khalek was able to prove this last year when Gama Aviation sold Jet East, its fast-growing US maintenance business. Jet East made up a third of Gama Aviation. At the time Gama Aviation had a market capitalisation of about £60m.

In November Gama Aviation sold West Star for $131m (netting $100m). Steve Maiden, who led the fast growth of Jet East, was this week appointed CEO of West Star.

Some of the cash from this sale has been used to take Gama Aviation private. Perhaps surprisingly a significant number of investors have chosen to keep their shares even though they are no longer easily tradable. One high-profile UK investor bought 2% of Gama Aviation after the de-listing was announced. 

Khalek is excited to be back running a private company. He estimates that between 25% and 40% of his work life has been taken up by the demands of being listed.  Now freed up, he wants to grow Gama Aviation. “I am not sure everyone in the business is as excited that I will have more time,” he jokes.

Gama Aviation is looking to grow its FBO business. It has just completed a parking apron at Sharjah Airport, near Dubai, and is now starting on a new 14,000 sqm hangar and FBO due to open next year. The company is working through planning for its Jersey FBO in the Channel Islands. 

It has also hired Graham Williamson, formerly of ACASS Europe and TAG Aviation, to grow its aircraft management business. Williamson, who has been a competitor of Gama Aviation for many years, likes growing companies. He was at Emirates Airlines when it had three aircraft.

“It is exciting when you are growing and the opportunity for Gama Aviation is huge,” says Williamson.

Gama Aviation is in talks to buy Austrian operator Tyrolean Jet Services (one of its last stock exchange announcements was on this deal). Tyrolean Jet Services was the first Austrian business jet operator.

“We want to create bespoke operations in different locations like Four Seasons does with hotels”

“We want to create bespoke operations in different locations like Four Seasons does with hotels,” says Williamson. “We want to develop local presence in combination with our engine room in Farnborough. We want to provide great service, great product and be more focused on small numbers of highly bespoke clients.”

Khalek says it is not about trying to build one global operator. “One of the reasons that consolidation is tough is that aircraft management is a very personal business. You don’t want to grow into a big monster chain, you want guests to feel that they are staying at a boutique hotel where everyone knows their name.”

It is looking to build a series of small management companies – with no more than 25 aircraft – with local management. Gama Aviation believes that it can get economies of scale in back-office functions like finance, trip planning, maintenance and purchasing. Khalek adds another simile: “It is like a Michelin Star restaurant – you want a unique maitre d’ but the kitchen needs to be producing a consistently strong product.”

Khalek never hid his frustrations with running a public company (including to the Wheels Up team before they floated). He is clearly excited about the freedom the business now has. “We have all been weighed down with regulatory issues, things like Brexit, Covid, supply chain issues and others,” he says. “We need to shake ourselves out of this and go back to why people go into this industry. People do it because they love it and they are passionate about it. We need to remember how enjoyable this industry is.”

The post The very private Gama Aviation appeared first on Corporate Jet Investor.

But until last year when he launched a special purpose acquisition company (SPAC) and merged with Embraer’s electric vertical aircraft spin-off EVE, he had avoided public markets.

Now he is planning to take Flexjet, the fractional jet company, public. He launched his Zanite SPAC with a long-term partner and he is doing the same again. Flexjet plans to merge with Horizon Acquisition Corporation II a SPAC launched by Todd Boehly, founder of Elridge Capital. Boehly, is CEO, CFO and chairman of the SPAC, and a long term co-investor with Ricci.

The sale is expected to close in the second quarter of 2023.

“We are writing to share some significant news regarding Flexjet’s next chapter. Tomorrow [October 11^th], we will announce that we have made the decision to enter the public markets and become a publicly listed company,” wrote Ricci and Flexjet CEO Mike Silvestro in an email to customers.

Listing will also raise the profile of Directional’s highly regarded management team including.  Silvestro will be co-CEO along with Andrew Collins, CEO of jet card company Sentient Jet. Mike Rossi, Ricci’s partner for 40 years, will be CFO. Ricci will be chairman.

“Our industry has seen significant growth over the last few years, and Flexjet has never been in a better position to find opportunities to grow our service offerings in this opportunistic environment,” said the email. “We will parlay our existing profitability with access to capital and use that as a launch pad to continue to enhance your customer experience through fleet, program, and geographic expansion as well as significant infrastructure investment including maintenance support facilities and private terminals. Please know our leadership team is as committed as ever and will remain in place.”

Ricci and Boehly first worked together when Boehly was president of Guggenheim Partners. Directional was a strategic advisor to Guggenheim and an anchor investor in the Guggenheim Aircraft Opportunity Fund headed by Nicholas Sandler.

In 2016, Boehly left to launch his own firm Eldridge. He later acquired a number of investments from Guggenheim – including the aircraft portfolio.

Together with capital from Directional and Sandler, Eldridge acquired Guggenheim’s aircraft financing business. The business was then merged with Eldridge’s newly formed Stonebriar, with Ricci joining the board. Eldridge is also an investor alongside Directional in Flexjet and in Simcom. Sandler sits on both boards.

Ricci launched Flight Options a fractional operator that started with pre-owned aircraft in 1998. It grew quickly soon ordering new aircraft. Flight Options fleet was dominated by Beechcraft and Hawker aircraft, which was at the time owned by Raytheon. In 2001 it merged with Raytheon Travel Air (and ordered $900m of new Raytheon aircraft types). A few years later Ricci offered to buy Raytheon out but was instead outbid and sold his stake. In 2009 it was able to buy back Flight Options.

In 2013 he acquired Flexjet from Bombardier for $185m – as well as taking on firm order for 85 Bombardier aircraft. Flight Options was later rebranded as Flexjet.

Flexjet has grown significantly since then. In 2020 it launched in Europe headed by NetJets Europe veteran Marine Eugène.

Flexjet will trade with the ticker: FXJ and join Wheels Up (NYSE: UP) on the exchange. The two companies have very different business models – Flexjet, buys aircraft and then sells shares to owners; Wheels Up sells charter on both its aircraft and third-party ones. The listing of Flexjet should encourage more investors to look at business aviation.

Kenn Ricci is speaking at Corporate Jet Investor Miami 2023

The post Kenn Ricci plans to list FlexJet [NYSE: FXJ] with Boehly appeared first on Corporate Jet Investor.

It is offering 20m units at $10. Each unit consists of one share of common stock and one-half of a warrant, exercisable at $11.50. At 20m public units, New Vista Acquisition would be valued at $250m.

New Vista takes the total number of SPACs floated in 2021 to 95, according to SPAC Analytics on February 2nd, 2021. The average size of one in 2020 was $279m, and the total number floated was 248, according to SPAC Insider.

The SPAC has been floated by CEO and chairman Dennis Muilenburg, former CEO of Boeing, chief financial officer, Co-President and director Travis Nelson, who served as managing member of Eclipse Investors and previously was an MD at TowerBrook Capital Partners; and chief operating officer, Co-President, and director Kirsten Bartok Touw, the founder and managing partner of AirFinance.

“Emerging technologies we have identified include, but are not limited to, electric, hybrid and distributed propulsion, alternative fuel, power and power storage systems, advanced materials and manufacturing technologies, digital networks and advanced computing, sensor and situational awareness systems, robotics and automation, software-driven data processing, machine learning and AI,” according to the S1 Form filed with the SEC.

The SPAC is sponsored by a Delaware company called New Vista Acquisition LLC, which has committed to purchase an average 7m warrants at the price of $1 per warrant. The SPAC will be supported with additional directors with years of experience at Rolls-Royce, Maxar Technologies and the US Air Force. Advisors from NASA, Universal Hydrogen and Uber will also be involved.

Bartok has previously told our sister title Revolution.Aero that operational managers with experience in their vertical of the industry have trust and respect which is a factor for SPAC success.

Aerospace SPACs on the rise

New Vista’s filing underscores a larger shift towards aerospace and aviation SPACs, which have been on the rise – almost one per month – since October last year.

Kenn Ricci, founder of Directional Aviation launched Zanite Acquisition Corporation, which will focus on advanced air mobility, sustainable aviation and other emerging technologies.

“We typically have around $30m to invest in equity in each new company. With leverage we can make that up to around $100m or $150m,” Ricci told Corporate Jet Investor. “There are private equity companies interested in several billion-dollar companies but there is a gap between what we do and what the large funds are doing. That is why we have filed for a SPAC.”

In December 2020, helicopter operator Blade said it was going public via a merger with Experience Investment Corp, an affiliate of KSL Capital Partners. Through the merger, Blade will be valued at $825m – significantly higher than its 2018 valuation of $140m. The company also rebranded as Blade Urban Air Mobility.

The $825m deal included $400m in gross proceeds, as well as a committed private investment in public equity (PIPE) deal of $125m.

Then, on February 1st, 2021, private jet charter company Wheels Up said it was going public via a merger with blank check company Aspirational Consumer Lifestyle. This deal gives Wheels Up an enterprise value of $2.1bn and $750m in cash.

What all these deals clearly indicate is an influx of a lot of cash and interest in the aviation and aerospace industries. Perhaps more than ever before. Nick Fazioli, Jefferies’ MD and head of Commercial Aerospace and Aviation, captured this perfectly.

“This transaction validates the fact that institutional investors and public markets really have belief and conviction in this space,” he told Corporate Jet Investor.

Fazioli said this would spur others to look at business aviation investment. “We are seeing significant interest from companies looking to invest equity or lend debt to business aviation companies and this may encourage others and lead to more consolidation of the industry.”

In the advanced air mobility space, aircraft manufacturer Joby Aviation is exploring a deal to go public through a merger with a SPAC at $5bn. It has kept details under wraps for now, although it recently acquired Uber’s Elevate network – bringing total investment for Joby to $820m.

Lilium Jet is another eVTOL company seeking public investment via SPAC. Total investment in the sector is rising rapidly, with several companies in the aerospace and aviation sectors on the verge of going public.

New Vista Acquisition plans to list on the Nasdaq under the symbol NVSAU. Citi and Jefferies are the joint bookrunners on the deal.

How the inability to raise capital could hold the revolution back

Kirsten Bartok Touw, director New Vista Acquisition Corp and founder and managing partner of AirFinance

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