Fitch affirms Vista Global at 'B+'; Outlook Stable

Vista Global and its VistaJet and XO brands are positioned to continue their consolidation in the private jet sector, according to bond ratings agency Fitch.

By Doug Gollan, February 19, 2023

Vista Global and its VistaJet and XO brands are positioned to continue their consolidation in the private jet sector, according to bond ratings agency Fitch

Fitch Ratings has affirmed Vista Global Holding Limited’s Long-Term Issuer Default Rating (IDR) at B+ with a Stable outlook.

The bond rating agency also affirmed the senior unsecured ratings on the bonds issued at VistaJet Malta Finance P.L.C. and XO Management Holding Inc. at ‘BB-‘ with a Recovery Rating of ‘RR3’.

The notes are guaranteed by Vista and key operating companies of XO Group Holding Limited and VistaJet Group Holding Limited.

Fragmented market

Fitch said, “The B+ rating reflects Vista’s global market position, albeit, in a highly fragmented market, diversified operations by geography and by customer across the company’s asset-light services range, and fairly stable cash flows with a sizeable share of contracted revenue.”

It continued, “The rating also takes into account the company’s niche operations, concentrated ownership with key man risk, dynamic changes in the business profile through M&A, some volatility embedded in on-demand services and relatively high leverage profile.”

Fitch added, “Measured by hours flown, Vista’s operations surpassed pre-pandemic levels in 2021 and have continued to grow. In the medium term, we expect the company will continue to benefit from the strong growth trend in the private aviation industry, boosted by continued health and other concerns over air travel through crowded airports and prolonged disruption to commercial flight networks. Post-pandemic demand from first-time users increases as they acknowledge affordability and value-added, such as productivity gains, comfort, and safety.”

It said, “Vista’s asset-light business model is well-positioned to continue taking market share from business aviation ownership models. Along with faster expansion through any further investments, this will enable Vista to outperform sector growth, in our view. However, aggressive investment may weaken its deleveraging capacity and entail execution risks. We currently do not assume further growth in fleet size in our forecasts.”

Strong membership growth

Fitch cited strong numbers for the group’s membership programs.

Through Q3 of 2022, VistaJet’s Program members had grown by 78%, and XO deposit members increased 153% from end-2019.

“We expect the member base will continue to grow at double digits in 2023 supported by the aircraft capacity added in 2022,” Fitch forecasted.

Fitch’s forecast calls for “EBITDAR leverage to remain stable at around 5.0x following 7.8x in 2021 after including the impact from the relatively large acquisitions in 2022 as well as the organic fleet growth.”

Fitch also expects Vista to build its cash position. “In the absence of any large unscheduled debt repayment, we expect the company to build cash that it can use to grow. We assume that the company will continue with its zero-dividend policy.”

In terms of cash flow, Fitch expects stable cash flows, supported by 35%-40% of the company’s revenue attributable to use-it-or-lose-it three-year Program contracts and to a lesser extent, by a large proportion of deposit customers in XO’s on-demand services. Its high exposure to well-established private aviation markets with stable demand dynamics such as the US and Europe is another contributing factor.”

Despite the consolidation, Fitch noted, “The global private aviation market is highly fragmented, providing further growth opportunities for Vista, whose market share is about 5%, despite being one of the leading operators. The industry is highly competitive, and we expect the company’s yields to be under pressure. Nonetheless, asset-light customers have historically expanded more quickly than fractional or full ownership aviation services.”


In terms of liquidity, Fitch wrote, “Vista Global had short-term debt obligations of around two times cash balance at end 3Q22, of which more than half were lease payments. In the next year, we expect the company to generate more than $200 million of free cash flow (after lease payments), which, together with the cash on balance sheet, is sufficient for scheduled debt repayment. The company has so far been successful in refinancing as needed for bullet payments, and we expect this to continue, which would further reduce the actual repayment needed in the short term.”

During 2022, Vista continued growth with acquisitions of charter operators Jet Edge and Air Hamburg.

Recently, Chairman and Founder Thomas Flohr said he plans expansion in Africa.

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