Jet Edge is targeting NetJets owners with $150 million from KKR

By Doug Gollan, June 8, 2021

Jet Edge is rolling out its AdvantEdge aircraft management program nationally, including a tier specifically targeting fractional shareowners

Los Angeles-based Jet Edge plans to shake up the world of aircraft management, which it claims “lacks innovation.” Its rebranded AdvantEdge program, relaunched this morning, will fly on the back of a $150 million credit facility from KKR.

AdvantEdge is targeted to owners of Gulfstream 450, GV, GIV-SP, 280, Bombardier Challenger 300/350/604/650, Dassault Falcon 2000/EX/LX, and Embraer Legacy 650 aircraft who are charter-focused.

Owners stipulate how many charter hours they want per year – 250, 500, or 900. In return, they commit 14, 28, or 52 weeks of access to Jet Edge charter clients without owner approval on a trip-by-trip basis.

During those periods, which run a minimum of seven days, their aircraft will be part of Jet Edge’s floating fleet instead of returning to the owner’s home airport after each trip.

The move allows owners of super midsize and large cabin jets in markets that don’t support charter revenue to now capture the same type of income as owners in markets like New York or Los Angeles.

A key part of the proposition and use of the KKR money, says Jet Edge CEO Bill Papariella, is an institutionalized buyout program promising owners preset amounts based on type and age of aircraft. He describes it as similar to fractional ownership contracts.

Money will also be used to buy aircraft that will work well in the charter market on spec, later selling them to owners who will keep them in the AdvantEdge fleet.

Papariella says the majority of company profits are coming from a segment of charter-focused owners. He says Jet Edge is now targeting that owner profile aggressively as it moves forward.

In total, there will be less churn in the Jet Edge charter fleet, says Papariella.

Jet Edge vs. NetJets

In fact, the 900 hours per year level of AdvantEdge is specifically designed for owners who don’t care if they fly in their own jets, the same profile as fractional shareowners. He specifically mentions NetJets fractional clients as a target.

A brochure about AdvantEdge touts, “Your entire revenue, cost structure, and crew schedule is highly predictable and reliable. Imagine knowing your ownership cost and revenue experience each year before you fly a single hour.”

For owners who want to fly with their own flight crews and cabin attendant, AdvantEdge offers that same facility. Papariella says dedicated crews reduce mechanical delays and repairs as pilots “act with pride of ownership. The captain runs a tight ship. It’s his or her airplane.”

The KKR funds will make its Jet Edge Partners whole aircraft sales unit an even more powerful player in the market. It recently joined IADA claiming over $2 billion in sales.

Papariella says the company will also use the money to develop technology that drives aircraft management and charter pricing. He says acquisitions could be part of the plan. There will also be increased staffing and marketing. However, he rules out buying more management companies or brokerages.

Owners get discounts via its recently launched Reserve jet card membership when they aren’t flying on their own aircraft. However, Papariella says Jet Edge’s charter focus will continue to be on the wholesale market instead of direct-to-consumer.

In addition to more attractive pricing because of floating fleet efficiencies, he says not needing owner approval means, “When we get a quote request, the answer is going to be. ‘Yes,’ not, ‘I have to check.’”

Today’s deal is not the first for Jet Edge. In January 2020, it acquired Columbus, Ohio-based Jet Select. In 2019, Jet Edge secured $60 million in financing from Solace Capital Partners. Last year, Jet Edge ranked ninth in combined Part 135 and Part 91K flight hours, according to Argus TraqPak.

The KKR news comes a day after the financial firm announced a $4.5 billion agreement to acquire Atlantic Aviation. The FBO chain has over 60 locations. Papariella says he learned of the deal at the same time as everyone else. He says it’s too early to discuss any synergies. However, he adds, “This is the first of more announcements, so stay tuned.”

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