XOJET Retains Perella Weinberg Partners To Explore Financial Options

Is XOJET in play? The company said it is looking at raising new funds, a merger, sale or strategic alliance.

In order to best position XOJET for continued growth and expansion, Perella Weinberg Partners has been engaged as a strategic advisor to explore a range of options that may include a capital raise, merger, sale of the company or a strategic alliance, according to a statement received by Private Jet Card Comparisons. The company was started in 2006 and has over 450 employees, 41 of its own aircraft and over 1,300 additional private jets in its broker network. The company has a 24/7 operations center spanning 21,000 sq. ft. in Sacramento, CA. The firm also recently completed the purchase of two Citation X aircraft and is planning to expand the fleet with additional aircraft acquisitions in 2018. Last year, it continued a refurbishment of its current fleet and launched a new membership fee model program. Current key investors include TPG Capital and Mubadala.

“We have built a client service franchise and fleet operation backed by state-of-the-art network algorithms that make us one of the most sophisticated, efficient and profitable companies in the industry,” said Brad Stewart, XOJET chairman and CEO. “The result is a robust, highly scalable private aviation business well-positioned for growth.”

According to company data, XOJET flew more than 25,000 flights with over 67,500 passengers in 2017 covering 22,000 different city pairs in North America. XOJET claims it was the first private aviation company to enable its entire fleet with complimentary Wi-Fi, and has earned the industry’s highest safety ratings, including ARGUS Platinum, Wyvern Wingman and ISBAO Stage III. In May 2017 XOJET completed its 200,000th flight. Last year, the firm doubled the size of its Flight Standards Department to 35 standards captains and eight check pilots and hired new directors of flight standards and safety. XOJET also developed advanced pilot training programs and is the first Part 135 operator in the private aviation industry to implement the Federal Aviation Administration’s Line Operations Safety Assessment program.

After a decade of consolidation in both the OEM and FBO sides of the business, many pundits had spotlighted brokerages and operators as being ripe for mergers. U.K.-based PrivateFly recently acquired U.S.-based Bird Dog Jet to expand its brokerage operations on this side of the pond, while another British entrant, Victor, announced last month it had raised an additional $18 million and created a holding company that could be used for acquisitions. Blue Star Jets founder Ricky Sitomer recently completed a reverse takeover with his new vehicle Star Jets International and a stated goal of building a jet card and charter brokerage with $200 million in sales. In 2016, fractional share and jet card seller Flexjet acquired FlairJet in the UK as part of its expansion plans for Europe. It is widely expected Wheels Up will launch a Europe presence this year. The company helmed by Kenny Dichter also has taken delivery of its first three Citation X jets, with coast-to-coast range, which will make its offerings more competitive to XOJET. U.S.-based Surf Air last year launched European flights while Skyjet, part of Directional Aviation (Sentient Jet, Flexjet and Nextant) rolled out a European membership program with fixed one-way hourly rates in 2017.

In terms of raising new investments, in addition to Victor, XOJET would not be alone if it went that route. JetSmarter has announced at least two rounds of new investment over the past two years with at least $100 million, VistaJet raised at least $150 million in fresh capital while Wheels Up has tallied over $200 million in new capital. Additionally JetSuite obtained an investment from JetBlue. Last October, Stellar Labs, an online brokerage and aircraft management platform raised $26.3 million from Global Jet Capital, a leading provider of corporate aircraft financing solutions capitalized by The Carlyle Group, Blackstone’s GSO Capital Partners,AE Industrial Partners, Columbia Equity Partners and Expa.

As part of the release, XOJET teased a new XOJET Elite Access guaranteed rate membership program in first quarter 2018. XOJET already has common ownership ties with fleet operator Travel Management Company (TMC) with a fleet of over 70 private jets. XOJET Chairman Bradley Stewart previously served on the board of JetSmarter and the upstart was supposed to create a customer app for XOJET. XOJET is a supplier empty leg flights for JetSmarter members.

Stewart, in the release, attributed XOJET’s strong performance to the company’s focus on three core business competencies: its branded client franchise, the network algorithms and capabilities XOJET uses to optimally deploy its fleet, and its industry-leading flight operations. “We have spent the last few years building our capabilities in each of these core areas of expertise,” said Stewart “they are the foundation for XOJET’s continued expansion.”