Clay Lacy, Jet Linx lead private jet CARES Act recipients

Clay Lacy Aviation received $26.9 million while Jet Linx Aviation was given $20 million, according to U.S. Treasury documents

NetJets, Wheels Up, Flexjet, XOJET Aviation and related companies were notably absent from the Treasury Department’s list of COVID-19 aide recipients

See the full list of aviation companies receiving CARES Act Coronavirus financial support

In a list dated April 27th, the U.S. Department of the Treasury published names of 96 companies receiving some of the $32 billion earmarked to preserve aviation jobs. The list includes both airlines and private jet operators.

The act specified grants needed to be based on payroll expenses from April 2019 through September 2019, subject to proration. Funds must be used for the continuation of payment of employee wages, salaries, and benefits. 

Needless to say, business aviation was deep down the list. Clay Lacy in the 15th spot was the top gaining private jet provider. Clay Lacy received a grant of $26.9 million followed by Jet Linx with $20 million.

By contrast, American Airlines received $5.8 billion in funds followed by Delta Air Lines at $5.4 billion. United Airlines was given $4.9 billion.

Many of the business aviation companies on the list are not well known to consumers. Most offer on-demand charter sold locally or through brokers, eschewing nationwide jet card programs.

Chicago-based Priester Aviation, which offers a jet card program in a number of key markets, received $4.5 million. Los Angeles-based Dreamline Aviation, which has a card program targeting Southern California and Bay Area fliers, received $1.8 million. Advanced Air LLC, which operates Surf Air’s scheduled Pilatus PC-12 flights, received $2.7 million.

NetJets, Wheels Up, Flexjet, XOJET go missing

Perhaps most interesting is who wasn’t on the list.

NetJets had previously said it did not apply for government support. In addition to being the largest private jet operator in the world, the Berkshire Hathaway subsidiary includes Executive Jet Management, ranked by Argus Traqpak as the second-largest Part 135 operator.

While Berkshire Hathaway doesn’t break out results, in a May 2nd filing, the company reported, “Earnings from NetJets increased in the first quarter of 2020, primarily attributable to improved fleet and operating efficiencies, which improved operating margins over the first two months of 2020.”

It went on to note, “The spread of COVID-19 had a significant impact on NetJets’ and FlightSafety’s operations during March and April.”

In a letter to customers last month, NetJets’ president Patrick Gallagher wrote, “Applying what we learned during the financial crisis of 2008, we have spent the past several years paying off our debt and reinvesting in our business. Our stated goal was to build a business for all economic conditions so that we can serve our Owners.”

It also doesn’t appear that any of Directional Aviation’s companies were on the list of Federal money. The group includes OneSky Flight, the parent of Flexjet, the second-largest fractional operator, Sentient Jet, a leader in jet cards, and PrivateFly, an on-demand broker. The group’s principal Kenn Ricci had recently posted on Instagram saluting employees who had voluntarily participated in deferring pay.

Last month, Fitch Ratings said for OneSky it “expects the company’s flexible cost structure and liquidity resources to be adequate to meet the significant near-term headwinds from the coronavirus pandemic.” In the report, the rating service estimated approximately $125 million in cash was available to service debt payments throughout the short term.

Top-ranked Gama Aviation Signature, fourth place Delta Private Jets (DPJ) and ninth ranking Travel Management Company, all now owned by Wheels Up, didn’t appear on the list. Following its acquisition of DPJ, Delta Air Lines became its largest investor. Franklin Templeton, T. Rowe Price, and Fidelity Management are among its other key backers.

XOJET Aviation, ranked third among U.S. charter operators, did not appear on the Treasury website either. Last month Fitch estimated minority owner Vista Global Holdings’ “liquidity is tight but manageable.”

Fitch added, “Although Vista (VistaJet and XOJET Aviation) is the second-largest operator by hours flown in the global business aviation sector, its global market share of occupied hours is only 2.6%. While operations in the fragmented market provide growth opportunities for stronger players, they are also subject to strong competitive pressures.”

Last May, Debtwire reported VistaJet Malta Finance PLC and XO Management Holding Inc., units of Dubai-based Vista Global, successfully sold $550 million in senior unsecured bonds.

At the time, Paula Seligson, a reporter with Debtwire told Private Jet Card Comparisons, the deal was positive news for the company. She said the funds were being used to refinance two pieces of debt due in 2020 and 2021. She added, it also means there are now no major refinancing obligations until 2024. 

Vista Global holds a minority stake in Florida-based XOJET Aviation due to foreign ownership limitations. However, it owns outright XO, a U.S.-based brokerage arm that sells time on the XOJET fleet as well as off-fleet jet card programs.

A spokesperson for Vista Global Holdings declined to comment.

Airshare, FlyExclusive, Jet Edge, Nicholas Air, and Solairus

Solairus Aviation ranked sixth by Traqpak and seventh-ranked Jet Edge were also absent from the Treasury list. Dan Drohan, CEO of Solairus, said his company didn’t apply for support.

FlyExclusive, which recently launched a jet card program, and was in eighth place among Part 135 charter operators in 2019 rankings was missing as well. Its owner Jim Segrave recently touted its financial strength.

Other notable operators not on this initial list from Treasury include Nicholas Air and Airshare. Both sell jet cards and fractional ownership. They are ranked on TraqPak’s list of top fractional fleet operators.

Jet Linx ranked 5th on the TraqPak Part 135 list while Clay Lacy was 11th in terms of flight hours.

JetBlue Airways received $936 million. It was a significant investor in JetSuite, which sought Chapter 11 bankruptcy protection last month.

In its filings, the grounded private jet charter operator said it didn’t believe it would qualify for CARES Act relief due to impending insolvency. Its chief restructuring officer said JetSuite had never made a significant profit in a decade of operations.

The list has already attracted the type of unwanted attention that seems to follow business aviation. A CNBC report noted that founder Clay Lacy was a campaign contributor to President Donald J. Trump.

The company declined to comment on whether or not its founder still has an ownership interest. A 2013 article by Aviation International News indicated that current CEO Brian Kirkdoffer had become the majority owner.

While CEOs of the large U.S. airlines are saying it may take three years for the business to recover, the private jet sector is continuing to see a steady rebound, according to weekly flight tracking reports from WingX. Reduced airline routes and frequencies, and ongoing Covid-19 health concerns, are expected to continue that trend.

CARES Act Aviation Payroll Support