Congratulations this week went to one of PrivateFly’s suppliers, Hangar8 who listed on AIM; London’s Stock Exchange for small but rapidly growing companies. Placing 1.3 million shares at £1.50, Dustin Dryden (Hangar8’s md) pulled in a £2m investment for further growth and expansion.
With many much larger companies such as Ocado struggling this year list on AIM, many would have suggested last week that Hangar8 could not justify their £9.5m market Cap.
Exceeding all expectations, the Hangar8 AIM listing was over-subscribed and insiders in the AIM market told me that ‘private aviation is proving to be a strong rebound stock that has a magnetic X factor for investors’
Hangar8 has been a trusted supplier of private jets to PrivateFly members for the past 3 years. They have been prepared to accept thin margins to keep their aircraft and crews airborne, while competitors have remained on the ground.
Not surprisingly, Hangar8’s policy of aggressive pricing has made them disruptive and unpopular amongst others aircraft management companies in the industry. What their competitors need to know is that the fragmented private jet market has been changed dramatically by the recession. Smaller aircraft management companies are now facing their 3rd year of tough economic conditions combined with increased regulation costs. To survive these companies will need to reduce operating costs by merging or forming alliances – like the airline industry has done.
Watch this space for further growth from Hangar8.