ABACE Convention News

Gama Eyes Greater China Progress From Hong Kong Base

 - April 15, 2018, 9:00 PM
Marwan Khalek, co-founder and CEO of Gama Aviation.

Gama Aviation (Booth H1514) has reported another strong year of growth as the business aviation specialist’s operations in the U.S., Asia, and the Middle East all ticked up, with the U.S. performing the strongest. In Asia, Gama Aviation acquired Hutchison Whampoa’s 50 percent stake of its Hong Kong-based joint venture, with Hutchison instead becoming a strategic investor in the Gama Aviation group by taking a 20 percent stake.

The group itself now also holds a 20 percent stake in Hong Kong Chek Lap Kok International Airport-based MRO provider CASL. “We’re very well placed in the Asia market,” co-founder and CEO Marwan Khalek told AIN. “We’ve decided to use Hong Kong as our main base while in a holding pattern waiting to see what happens in Mainland China.”

In the Middle East, revenue grew by 20.5 percent, to $23.5 million, and the division was “profitable for the first time,” returning $0.5 million. In October, Gama Aviation bought out the Jet Set’s 51 percent stake in its Middle East ground division as part of its “planned development in the region.”

After the company’s 2017 results were released on March 19, Khalek said Gama is looking to bolster its European operations and become less UK-centric. The company, which is currently listed on the UK’s Alternative Investment Market (AIM), recorded 2017 revenues of $207.4 million, up 5.8 percent, with underlying profit of $18.7 million.

It has now laid the foundation for the next steps of development and growth, raising £48 million (approximately $67 million) in February. Of this, $10 million has been earmarked for investment in two maintenance facilities in the U.S. (one on the East Coast and one on the West); $10 million for developing its Sharjah, UAE business aviation center; and the rest for “acquisitions in the Europe air and ground divisions and the Middle East air division.” Khalek said the European division “Needs scale and needs to be more European.”

In the U.S., the new division created through the merger of its U.S. operations with the BBA aircraft management business (Landmark), rebranded as Gama Aviation Signature, in which Gama Aviation has a 24.5 percent stake, saw “significant growth” resulting in its U.S. air-related activities increasing in revenue by 35 percent, to $518 million. This was also fueled by the “continued growth of our Wheels Up contract,” said the company. It added, “The integration of the BBA business is delivering the envisaged benefits: adding complementary West Coast coverage to the existing East Coast business, diversifying the client base, providing the ability to cross-sell maintenance services into Gama Aviation’s wholly owned U.S. ground business, and delivering cost synergies.”