PrivatAir’s insolvency marks another ‘good times’ private aviation blackeye and reminds buyers they need to research the stability of providers
Yes, it’s another ‘good times’ private aviation hiccup in what has been described as the peak of the segment’s 10-year recovery. “Any Jet, Anywhere, Any time” reads the on-demand private jet charter page of the Swiss and German private jet management company PrivatAir which said it has filed for insolvency today.
On its website, the company posted the following statement:
“ It is with great sadness that PrivatAir SA, Switzerland, announces today that it has filed to commence insolvency proceeding in Switzerland. Likewise, its subsidiary PrivatAir GmbH in Germany has also filed for insolvency today.
Over the past few weeks, a number of events have had a significant impact on the companies’ future business forecast and viability, which forced the companies to file for insolvency.
PrivatAir was created in 1977 in Switzerland. It directly employs today 226 staff in Switzerland, Germany, and Portugal. It also uses the services of 65 crew members via an external contracting entity for its operation in the Middle East (Jeddah – Riyadh shuttle). It will remain known as a truly unique company built by amazing people who showed extreme dedication to their work and unmatched service levels, and proved many times that the impossible in aviation could be made possible.”
The company specialized in the management of Airbus Corporate Jet, Boeing Business Jet, Bombardier Global Express, Dassault Falcons, Embraer Legacy 600s and above, and Gulfstream G-450s and above. It holds three AOCs allowing operations out of Switzerland, Germany, and Saudia Arabia.
According to a press release, in October 2016, SilverArrow Capital Group announced that it has 51% of PrivatAir, SA. SilverArrow Capital was described as a group of private investment firms focused on industrial growth sectors. “SilverArrow Capital brings value to its private investors and partners by executing a proven activist investment strategy in industrial growth companies. In addition, the group provides strategic advisory services in areas of corporate strategy, corporate restructuring, and corporate finance,” according to the press release. SilverArrow hasn’t posted any news on its website since January 2017. At the time of the acquisition, Thomas P. Limberger, the CEO of SilverArrow was appointed Chairman of PrivateAir.
As of 2007, PrivatAir had a U.S. managed fleet of around 40 aircraft ranging from King Airs to large-cabin Gulfstream jets according to an AIN article that year, although at the time of its insolvency today it appears that it was operating a handful of aircraft in Europe. In 2006 it had placed a $153 million order for a Boeing 787 Dreamliner and employed 550 people. In 2008 it was reportedly operating two 787s on the charter market.
The news is the latest in a string of problems for several business aviation operators and brokers. In 2017 Zetta Jet, an operator of the Bombardier Global Express, made a high-profile bankruptcy and liquidation leaving over $50 million in estimated losses, including consumers who had prepaid for jet card and charters. Earlier this year ImagineAir suddenly shut down, also costing jet card holders lost money. The Atlanta-based operator was on the other end of the spectrum operating 4-seat Cirrus SR22 props. Then Citation Mustang operator and Air France private jet partner Wijet suddenly shut its UK subsidiary, although it claimed it would honor the deposits of jet card holders. Over the summer it has claimed it will follow the Wheels Up model of outsourcing operations of a proposed new fleet of HondaJet light private jets. It had said in the interim it would act as a broker.
Last month, U.S. based Surf Air said it had closed its European company after attempting to first establish operations with its own fleet, then act as a broker of by-the-seat scheduled private jet flights. It is also rumored to be pulling back on Texas, although its CEO denies it. The company has been involved in a lawsuit with a former operator for its California flights which it had also outsourced and was cited by the U.S. government for over $2 million in unpaid taxes.
At the same time seat sharing membership, JetSmarter continues its legal battles against unhappy current and former members as a judge in Los Angeles allowed a $2 million lawsuit to continue. At least a half dozen members have sued JetSmarter in Florida, New York, New Jersey, Wisconsin and California for fraud. The company which once provided free seats to members on scheduled private jet flights and free empty leg flights apparently now only offers crowdsourced flights dependent upon getting as many as five to 10 seats sold for prices that range into the thousands of dollars per seat.
In addition to private jet charters and corporate shuttles, PrivatAir had operated flights for Lufthansa, Swiss, KLM and Swiss in the past using a Boeing Business Jet with business class seats.
The ‘good times’ news reminds consumers of private aviation that it’s important to research the companies they are depositing six-figure sums with and when possible to explore escrow account options.