Private jet charter operators ripe for mergers and consolidation

Expect more mergers and consolidation with Part 135 private jet charter operators, says one investment bank

The Part 135 private jet charter market is ripe for consolidation and outside investment. That’s according to Brooks Crenshaw, managing director of Balmoral Advisors.

Speaking on a Vimeo video, first reported by Aviation International News, he said the fragmented market of charter operators is attractive to outside investment, including family offices and private equity.

“Private aviation presents a new and interesting opportunity for buyers and sellers to participate in what could be a larger consolidation of this growing industry,” Crenshaw said.

He pointed to private aviation’s rebound driven by “the new world of social distancing.”

While the four largest domestic airlines – American Airlines, United Airlines, Delta Air Lines, and Southwest Airlines – hold 69% market share, he said the top 25 private jet charter operators in total account for just 35% of the U.S. market.

Private aviation mergers and acquisitions

He predicted big players would grow through acquisition, and smaller operators can tap investment capital to improve technology, launch jet cards, or retail brokerages.

Crenshaw pointed to NBAA data showing 59% of business aircraft are operated by companies with less than 500 employees and 70% by companies with less than 1,000 employees.

Crenshaw pointed out that the rebound of business aviation has come despite lagging corporate travel. He cited McKinsey’s research showing that only 10% of households who can afford private flights were partaking before the pandemic.

Crenshaw pointed to the already frothy market, noting Wheels Up purchases of Delta Private Jets, Gama Aviation Signature, and TMC Jets, Jet Edge’s purchase of JetSelect Aviation, FlyExclusive’s acquisition of Sky Night, Jet Linx Aviation’s purchase of Meridian’s management and charter business along with other deals.

His conclusion? “Consolidation has the potential for a smooth landing on a longer runway in an active industry.”