Air Partner updates shareholders on Coronavirus COVID-19 actions and impacts

By Doug Gollan, March 18, 2020

The private jet charter broker and jet card provider provided a wide view of its varied business units

Private jet charter and jet card broker Air Partner, which offers extensive aviation services beyond private flying, updated shareholders earlier today on its approach to the Coronavirus COVID-19 pandemic, including protective actions being taken, current sales and pipeline.

Air Partner financial impact

Air Partner says since the Coronavirus COVID-19 virus crisis began at the start of its financial year – February – it is too early to judge the full-year impact – either positively or negatively.

We appreciate that travel bans and restrictions are necessary to limit the spread of COVID-19, but we would urge governments to recognize that some air travel is vital in order to evacuate people from high-risk areas, repatriate citizens and transport much-needed aid and medical supplies.

Mark Briffa, CEO of Air Partner

As a result, it is no longer providing financial guidance for the remainder of the financial year ending 31 January 2021.

It says, across the Group, costs are being tightly managed to preserve cash and to maintain sufficient working capital in the business to support customer demand through this crisis.

A first casualty could be dividends for shareholders. According to its update, Air Partner’s board of directors believes it will not be in a position to make a recommendation on dividend payments until the crisis has passed, and a clearer outlook has emerged.

On the plus side, the group owns no aircraft and does not operate as an airline.

Mark Briffa, Air Partner CEO, said in a statement, “It is an extremely precarious time for the global aviation industry, which is facing unprecedented pressures and challenges, in the face of which we continue to manage the business in the best interests of all our stakeholders.”

He continued, “We appreciate that travel bans and restrictions are necessary to limit the spread of COVID-19, but we would urge governments to recognize that some air travel is vital in order to evacuate people from high-risk areas, repatriate citizens and transport much-needed aid and medical supplies.”

He added, “Appropriate designations and approvals need to be put in place swiftly to enable such crisis flights to take place, and all parties must unite in a common cause so that global air infrastructure can play its part in combating this crisis.”

Canaccord Genuity changed its outlook for Air Partner from a buy recommendation to under review. Like all travel-related stocks, Air Partner has taken a major hit, closing yesterday at 27.95 pence. The 52-week high had been 102.9 GBX.

In early afternoon trading in London, the stock price was 18.81 after falling as low as 15.33.

Air Partner’s workforce

Air Partner has assisted in the repatriation of 330 people to date. The company said, “Our overriding concern is the health, safety and wellbeing of our workforce and everyone that we work with. Accordingly, we are complying with government recommendations in the countries where our offices are situated and are implementing additional preventative and protective measures specific to our operations.”

It continued, “Our colleagues directly involved in crisis work are properly trained and are provided with the appropriate protective clothing, equipment, and materials to safely execute their role on behalf of our customers, and they observe a quarantine period after completion of the project.”

Additionally, the company said, “We have also implemented working from home shifts and rotations for colleagues and, in some instances, we have contingency plans in place to temporarily protect our staff by relocating them from severely affected zones to other offices in our network where possible.”

Air Partner business update

The company launched a new product, Air Partner Protect, to support customers flying during this time. 

It combines its Private Jet Charter and Safety & Security divisions in one dedicated project team, to mobilize and support customers. Examples of Air Partner Protect in action are the projects undertaken for the UK Foreign & Commonwealth Office (FCO).

It has repatriated over 300 British and EU nationals from Wuhan and thereafter repatriating 32 passengers from the Yokohama cruise ship. It continues to receive a number of inquiries for this product.

Private Jet Charter

Group Charter, which specializes in chartering aircraft carrying over 20 people, has seen customers canceling or delaying travel plans, particularly in the Meetings, Incentives, Conferences & Exhibitions (MICE), Sports and Tour Operations sectors. 

The forward order book included significant MICE events that have now been delayed indefinitely and we were due to benefit from scheduled sporting tournaments in 2020, including the Euros, which have now been postponed until next year.

Air Partner says the delays and loss of this work could be mitigated by an increase in aid projects and evacuation activity. It has added projects working with cruise lines to help customers repatriate significant volumes of passengers.

Its Private Jets division, which charters aircraft for up to 19 people, has seen continued high levels of activity in the U.S., with companies and individuals continuing to travel.

However, the U.K. and European private jet markets have been severely impacted by COVID-19, and there have been a number of cancellations or postponements. The downturn comes just as those markets were beginning to show signs of recovery after U.K. general elections and the Brexit outcome.

Air Partner says Freight demand has slowed as the COVID-19 crisis intensifies and supply chains have become interrupted by factory closures and travel bans.

It expects freight volumes will increase as supply chains recover, and from the experience of prior outbreaks, it is likely that they will surge sharply once aid projects begin to ship supplies, equipment, and personnel to affected areas.

Safety & Security Division impacts

Training, testing, and consulting activities have seen an immediate impact from COVID-19 as the vast majority of these activities are delivered physically onsite or in classrooms, and restrictions on delegate travel, workplace attendance and meetings have led to cancelations or indefinite deferral until the crisis abates.

The company notes, “Prior to the outbreak we had a strong pipeline.”

Now, where possible, it is switching in-person courses to e-Learning. However, it is too early to forecast when or how these activities will recover post the COVID-19. Customers include global airline carriers and airports, which have been severely hit by the crisis.

Air Partner says long-term contracts remain unaffected, though some activities such as covert security at airports will be impacted until passenger volumes through terminals return to more usual levels. The acquisition of Redline in December 2019 increased its forward long-term contract portfolio significantly, and these security contracts join its other long-term contracted activities, including wildlife hazard management at UK airports, airfields and world-leading Isle of Man Aircraft Registry.

Air Partner notes, “The acquisition of Redline is proving its strategic rationale far earlier than we could ever have expected, most notably as part of our newly launched Air Partner Protect product.”

The Redline team worked alongside the Group Charter and Freight teams to carry out the evacuation of British and Irish nationals from a cruise ship in Yokohama, a multi-faceted project which required all evacuees and their baggage to be security screened before boarding the flight back to the U.K.

A further update will be provided with the group’s full-year results in May 2020, Air Partner said.

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