Are industry mergers good news for customers?
There is much talk of the current ‘merger wave’ here at EBACE – and the shifting landscape of aircraft operators has been an industry talking point for many months. The latest news comes from Blink, who announced yesterday the acquisition of Italian operator MyJet – adding three further Citation Mustang small jets to their fleet, bringing it to a total of nine.
Blink has also announced the purchase of its fleet’s home base, London Blackbushe Airport, and its plans to invest in its facilities, to make it a stronger rival to other London private jet airports – and to offer market-leading pricing. Blink’s CEO Cameron Ogden said “We have been talking about consolidation for a long time and it is great to close our first acquisition”.
The news follows a major acquisition earlier in the month by Luxaviation – now making them the second biggest aircraft operator in the world by fleet size (second only to NetJets). Their purchase of ExecuJet Aviation Group takes them to over 250 aircraft under management.
Blink and Luxaviation were two of the aircraft operators that took part in an industry round table, hosted by PrivateFly earlier this year on this very subject. We looked at some of the commercial challenges for private jet operators in today’s market. And the relationship between fleet size and business success.
These were some of the key discussion points at our industry round table:
The operational challenges vary according to the type of aircraft operator. It was generally agreed that charter dedicated companies work on the basis of a ‘higher risk, higher reward’ model, whereas owner managed have a ‘lower risk, lower reward’.
A fleet size of 10+ aircraft are needed to break even in a pure charter managed operation, whereas other business models could become profitable with 4 or 5.
The benefits of mergers include better buying power for fuel, landing fees, insurance and crew, as well as client retention. Empty legs can also be better utilised in a larger business or group.
For mergers to work, identifying key synergies is essential, such as geographical fit. But it’s also important to align vision and culture.
See a more detailed report on the findings: Fleet size matters, says industry round table.
Does the customer benefit from aircraft operator consolidation?
Bigger fleet sizes mean better economies of scale when it comes to the costs that make up the end charter price. So with the trend for consolidation set to continue, we’d expect to see a positive impact for customers.
But it’s also key that customer service and flexibility remain absolutely central, as companies merge and grow.
Today’s private jet customer expects the commercial benefits of scale but without any loss to service levels and that’s where PrivateFly comes in.
It’s still a highly-fragmented market out there and whatever changes are taking place in the operator landscape, our technology means we can offer our clients the best options in terms of both price and service each time they fly, with consistent and excellent service from our team every time (see what our clients say about our service in our Trustpilot reviews).
PrivateFly works with an accredited network of over 2,500 global private jet operators, offering a combined fleet of over 7,000 aircraft. To compare the best options for your flight itinerary, contact us or speak to our Flight Team (24 hours) on +44 1747 642 777.
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