BACA Survey Reveals Industry Profits, Merger Activity

 - June 2, 2015, 11:11 AM

The global business aviation market appears poised for continued consolidation, with nearly half of companies participating in a recent Baltic Air Charter Association (BACA) survey indicating they have either participated in, been advised about or looked into possible mergers and acquisitions. The BACA survey results also depict an aviation services industry that is returning to profitability. It included responses from 80 members, primarily brokers, operators and FBOs.

“One aspect that came through very clearly was that members had primarily seen their profitability grow by increasing their level of sales,” BACA said. Nearly 72 percent of the respondents said their sales had either remained level or grew during the past 12 months. The same percentage experienced either stable or growing profits, and 70 percent of those companies attributed profit to increased sales. Another 12.5 percent cited falling fuel prices for boosting profits, while 81 percent reported plans to maintain or expand their work forces.

Increased competitionis putting pressure on profitability, however, according to 77 percent of the respondents. BACA, pointing to announcements such as the Luxaviaiton acquisition of ExecuJet last month, asked members about their mergers and acquisition plans. “An incredible 44 percent of respondents have either conducted or are looking into the possibility of mergers and acquisitions,” the association said. “A result of that scale clearly indicates that more M&A announcements will be made in due course.”