January 11, 2024
Private jet charter, jet card broker and aviation services provider Air Partner provided an update on trading this morning. It covers its new financial year which began February 1, 2020.
It is the second update to be given during the COVID-19 Coronavirus pandemic. Air Partner is planning more shareholder updates approximately every four to six weeks during the crisis.
According to the statement, Air Partner had a strong start to the financial year. The unaudited management accounts for February and the flash report for March show that each month generated profits “well ahead of both budget and the prior year.”
It said so far it has generated £2.4m of underlying profit before tax in the first two months of the year. New business wins from the crisis, such as repatriation contracts, have outweighed a decline in its Safety & Security division and European private jet charter during the pandemic.
Air Partner said its order book for April is “encouraging,” with the increase in Freight Division activity witnessed in March continuing.
Freight’s results are being “driven by the urgent need to move key goods and medical supplies, given the current pressure on supply chains.”
The company says the freight contracts and continued repatriation work demonstrate the value of its broad spread of aviation activities, offered across multiple markets.
At the end of March, the Air Partner had normalized cash in the bank of £6.5 million, excluding significant customer deposits and JetCard cash.
Management said it has access to a total debt facility of £14.5 million. That comprises a £1.5 million overdraft and a £13 million revolving credit facility (RCF). As of April 1, it is drawn down by £11.5 million. The RCF is due to expire in February 2023.
Group Charter continues to carry out significant repatriation and evacuation work during the COVID-19 pandemic. Since the last update two weeks ago, there has more action.
“We have supported a number of new businesses, including major cruise and oil companies, to repatriate employees and customers, in addition to continuing to work with the UK government to assist British citizens overseas. Further work of this nature is likely to occur in April,” Air Partner said.
A day after Argus TRAQPak projected March private aviation flights in the U.S. would drop 28%, Air Partner affirmed the decline. The global private jets industry is operating at reduced levels, it said.
“This is mirrored in our own customer activity, albeit with the U.S. holding up better, reflecting the size and depth of the market and its customers’ habits. JetCard use has slowed in line with the industry,” it said.
Air Partner’s Freight Division has seen a pick-up in demand. Movement of goods to keep global supply chains operating during the pandemic increased.
It says it remains ready to mobilize on this activity at short notice. “We have, for example, arranged the transportation of vital medical supplies into the United States and are receiving inquiries for further logistical support at this critical time.”
Although long-term contracts in this division remain largely unaffected, training, testing and consulting activities have been significantly impacted by government restrictions on delegate travel, workplace attendance, and meetings. This remains constant with the last update. The impact has been delayed revenues.
On the plus side, its Redline brand won two new long-term contracts in March. Details of these will be announced shortly.
Commenting on cost management and conserving cash, Air Partner wrote, “The Board reminds shareholders that the group owns no aircraft and does not operate as an airline.”
It added, “We continue to tightly manage costs to preserve cash and maintain our working capital.”
That said, stormy skies appear ahead. “While we have enjoyed a strong start to the financial year, our expectation is that business will now slow as the pandemic continues to restrict aviation activity globally. Accordingly, we have implemented a series of temporary cost management initiatives and made use of the available government grants and benefits to significantly reduce our cost base for the coming months.”
Cost savings include every director taking a voluntary 20% pay reduction for at least the next two months.
It believes the combination of a strong start to the financial year, action on costs and positive cash balance “give the Board confidence that Air Partner is effectively positioned to cope with the challenges and uncertainty posed by the ongoing COVID-19 pandemic.”
Greg Poulton of N1+ Singer Equity Research said of the update, “The Group has had a strong start to FY21, with both February and March delivering profits well ahead of both budget and the prior year…We are reassured by today’s update and management has reiterated its confidence that Air Partner is effectively positioned to cope with the challenges and uncertainty posed by COVID-19.”
Air Partner provides on-demand and jet card aircraft charter, aviation safety and security solutions to industry, commerce, governments, and private individuals, across civil and defense organizations.
The Group has two divisions: Air Partner Charter, comprising Group Charter, Private Jets (jet cards and on-demand private jet charter), and Freight and Remarketing. Air Partner Safety & Security (formerly Consulting & Training) comprises Baines Simmons and Redline Assured Security.
Air Partner has 17 offices across three continents, with its headquarters located alongside Gatwick airport in the U.K. The group employs around 450. It is listed on the London Stock Exchange under the symbol AIR.
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