Charter brokering group Air Partner has shut down its aircraft operating division in a bid to stem mounting losses. The Private Jet Operating Company (PJOC) has been put into administration after the company failed in attempts to establish a joint-venture partner for the business, or to find a buyer.
In financial results announced on March 16 for the six-month period ending on January 31, Air Partner showed a loss of £1.2 million ($1.8 million) across the group (including PJOC) with profits after tax down by 148 percent on the equivalent period last year. Excluding PJOC, profits before tax were down by 77 percent at £1 million ($1.5 million), with the Air Partner figures showing a charge of £2.4 million relating to the collapse of PJOC. Group sales were down by 7 percent, at £95 million ($143 million).
Air Partner formed PJOC in October 2006 when it acquired Gold Air for £4.4 million ($8.1 million at prevailing exchange rates, but $6.6 million at the current exchange rate). The company operated a fleet of five new Bombardier Learjet 45s and a Learjet 40, but these are not subject to the administration process because they were not owned by Air Partner and had been flown under management contracts for private owners, who will now likely be looking for new operating companies. Air Partner had planned to spend approximately $14 million building a 175,000-sq-ft terminal at London’s Biggin Hill Airport but abandoned that project last year.
The strategy behind the move to establish its own aircraft operator was to be able to deliver guaranteed capacity for charters at a time when demand was growing at around 30 percent. With the sudden, steep collapse of charter demand in the wake of the financial crisis, this need for in-house capacity evaporated.
CEO David Savile, who was the main architect of Air Partner’s expansion into charter operations, was to leave the company on March 31. He is being succeeded by Mark Briffa. According to the company, Air Partner’s core charter brokering business and sales of JetCard block hours product have “held up relatively well.”
Separately, Air Partner has signed an agreement with Denmark-based charter operator Air Alsie to represent its 21 managed aircraft in the Russia and CIS market. The latest addition to the fleet is a new Dassault Falcon 7X, which joins a mix of jets that includes the Falcon 2000EX and 900EX, the Cessna Citation XLS, CJ1, II and III, and the Bombardier Challenger 300.
According to Air Partner sales director David Macdonald, there is strong demand for large, long-range business jets among Russian clients. The Air Alsie aircraft will be available for ad hoc charters and will also be offered through the JetCard program.