Deer Jet subsidiary Hongkong Corporate Jet Management and Asia Jet Partners have signed a letter of intent for Hongkong Jet to purchase Asia Jet, the companies announced today at ABACE 2016. The transaction should close in the second quarter of this year. The two companies have a joint exhibit here at ABACE 2016 (Booth P608).
The proposed agreement has Hongkong Jet purchasing Asia Jet and its subsidiary Asia Jet Partners (Shanghai), as well as its joint venture Asia Jet Partners (Malaysia). The joint venture partner is Berjaya Vacation Club, which is a subsidiary of Berjaya Corp.
Hong Kong-based Asia Jet was founded eight years ago, and since then has grown into a company with a fleet of 11 business jets under direct supervision. HNA Group launched Hongkong Jet in 2009, and the company employs 150 people. In 2015, the company’s managed fleet grew by more than 80 percent to 25 aircraft and maintenance man-hours grew 110 percent, in part thanks to the company’s receipt of U.S. Federal Aviation Administration Part 145 certification.
“Linking hands with Hongkong Jet and its expansive aviation parent group became an obvious strategic fit for us within Asia,” said Asia Jet CEO Mike Walsh. “I am excited about our future prospects together and the benefits a larger group can bring to our clients.”
“Consolidating the service offerings of Hongkong Jet and Asia Jet will provide clients with a unique and comprehensive suite of services, not readily available elsewhere in Asia,” said Denzil White, CEO of Hongkong Jet. “Business jet users are very demanding and price sensitive, they look for the very best service. And as such, a small company will find it difficult to achieve the economies of scale to be able to offer them the very best service. So to offer the full band of services, one really needs to consolidate some of the smaller companies within the region where you can offer a full suite of services.
“With that in mind, we searched the market for a suitable partner that we could strategically grow, rather than organically, and have a jump-ahead instantly. We looked for a company that offered strong charter sales and value-added services to clients. We looked for a very good brand [and] for a team that offered excellent management, and we found that in Asia Jet,” said White.
After Hongkong Jet completes the purchase of Asia Jet, the two companies will be run as separate entities, although there will be just one branding team. Hongkong Jet has two AOCs, in Hong Kong and Bermuda, while Asia Jet works with its U.S. partner Jet Edge, which has a U.S. charter certificate. Three Gulfstreams managed by Asia Jet fly charters under Jet Edge’s AOC, and these average about 30 hours of flying per month, according to White.
Hongkong Jet’s two charter aircraft are a BBJ and a G550; the BBJ averages about 600 hours a year, while the G550 flies nearly 20 hours per month, according to White. “2015 was a record year, and utilization and charter hours are both up. Across China [the numbers] were up during the past six to eight months,” he added.
Asia Jet also announced that its Malaysia subsidiary is basing a Gulfstream G200 in Subang starting at the end of next month. “Block hour programs seem to be of popular interest to Malaysian based customers,” said Stutijin Van Till, director of business development for Asia Jet Partners Malaysia. “This bodes well for Asia Jet’s pioneering jet card program, which was launched in 2009 and seen more than $50 million in revenue since its inception.”