With Several FBOs Just Refurbished, Jet Aviation Seeks Strategic Growth

Versatile Jet Aviation's Aircraft Sales Is a Hedge If Market Begins to Slide Jet Aviation is sitting pretty. It's the world's only global business aviation service company, having expanded since its 1967 birth in Switzerland first to the Middle East, then to the Americas, and on to Asia (Singapore) in 1996. The firm owns and manages a fleet of about 140 aircraft, ten of which are available on an 'as-needed' basis via its premium Private Fleet charter program. "We're the only company that offers everything to do with private aircraft, except building them," says Jet Aviation chairman and CEO Thomas M. Hirschmann. The firm even handles aircraft sales, having last year acquired Love Field, Dallas-based Jet East. The acquisition is something of a hedge against an uncertain future, Hirschmann says. Jet Aviation started out doing maintenance, which still accounts for about 60% of total business. The firm also offers completions, with a recent specialty being airliner-size jets from both Airbus and Boeing. Jet Aviation has completed about a fourth of the worldwide BBJ fleet and also handles larger Airbus and Boeing aircraft, including the A320, 757 and 767. The company has some 3,500 employees at 30 locations, and in 1999 logged record revenues of about $450 million. Last year saw record Jet Aviation profits too. "We anticipate that this year is going to be even better than 1999," Hirschmann says. Son of company founder Carl W. Hirschmann, Thomas W. took the Jet Aviation helm in 1990 and in 1991 moved its headquarters to West Palm Beach. Terrance Kelley, also based in West Palm, is president & COO of U.S. operations. Heinz Köhli is president & COO for Europe and the Middle and Far East. He's based in Switzerland. Basel, Switzerland is where Jet Aviation does its big business jet completions, and in Zurich the firm has just added two Citation Bravos to its Private Fleet charter program, one entering service this month and another due in early 2001. Private Fleet is billed as a premium charter service, but because there are no up-front costs, it's a cheaper alternative than fractionals, with aircraft available on short notice. "We cater to a different clientele," Hirschmann says, describing Private Fleet customers as "upper end." Private fleet aircraft, including seven Gulfstreams (with another to be added) are all similarly outfitted, to make customers feel they are at home. They've got up-to-date amenities, with the installation of DVD players a recent plus. Besides the Gulfstreams and new Bravos, Jet Aviation has a Challenger 601, and a Sikorsky S-76 helicopter serving the Boston-New York-Washington corridor. Jet Aviation is building a major new office building in Basel to be finished late next year. It's talking with architects about a refurbishment of its FBO in Dallas. A West Palm refit is almost complete. There's a new terminal being built at Teterboro, with concurrent tripling of tarmac space there. The company is looking to expand in the U.S. Midwest and West Coast. That's a lot, but for a company with the size and reach of Jet Aviation, it's a short project list, and it signifies caution. Hirschmann sees himself as girding for a business downturn, and wants to avoid being overextended. "We have another two good years ahead of us," he told Show News when asked on the eve of NBAA 2000 about the current business aircraft boom. He predicts a global downturn. "It's going to be bad for a couple of companies," he warns. "There's going to be a lot of overcapacity," he predicts, which is one reason you're not likely to see any further acquisitions or big expansion news from the Swiss-American giant. Numerous business aircraft are likely to be put up for sale, he forecasts-one reason Jet Aviation bought Jet East in Texas. "It will sort out the good companies from the bad companies," Hirschmann says of the coming slowdown. He plans to be among the good ones. "We're very, very conservative," he says. "We try to do our work and do it the best way we can." Rich Piellisch

Basel, Switzerland- and West Palm Beach-based Jet Aviation is looking to expand its operations in the U.S. Midwest and West Coast.

The company is also offering several U.S. FBO refurbishments, and is promoting a new aircraft sales service in 1999-acquired Jet East, based at Dallas' Love Field.

Jet Aviation's premium Private Fleet charter service now includes a Sikorsky S-76 helicopter serving the Boston-New York-Washington corridor. The first of two Switzerland-based Citation Bravos is entering service this month, with the second expected early in 2001. The Private Fleet service operates a Challenger 601, and seven Gulfstreams, too.

"We're going to continue buying Gulfstreams," says Jet Aviation chairman and CEO Thomas Hirschmann. "We're looking for one right now." Jet Aviation's Private Fleet charter service caters to an elite clientele of top companies, governments and individuals, yet offers more economical service than fractional ownership because there are no up-front share purchase costs. Private Fleet combines the benefits of charter with the advantages of fractional ownership, the firms says, noting that "all Private Fleet aircraft are available on an as-needed basis without any capital investment."

Many of Jet Aviation's managed aircraft are available for charter, too. The company manages more than 140 aircraft in the U.S. Europe, Middle East and Asia. They include Sikorsky S-76 helicopters, Raytheon Beechjet 400As, Bombardier Learjets, Cessna Citations, Dassault Falcons, Gulfstreams, and Bombardier Challengers. Two Boeing Business Jets were recently added to the European roster.

Maintenance, which is how Jet Aviation got its start in 1967, still accounts for about 60% of total business. The company can handle aircraft including helicopters, turboprops and business jets, as well as transports, including the Airbus A319CJ Corporate Jetliner and Boeing BBJ. Middle East maintenance capabilities were recently improved, with an increased parts inventory to back technician teams in Jeddah and Riyadh.

Jet Aviation has a new agreement with Pratt & Whitney Engine Services whereby Jet Aviation's U.S. maintenance facilities will recognize Pratt & Whitney as the preferred engine repair and overhaul vendor for PT6A and JT-15D series engines. "An enhanced level of service and pricing" is promised.

Completions are a large part of Jet Aviation's business, with custom interiors for the new Airbus and Boeing business jets a particular specialty. Work is carried out at Jet Aviation Basel. One current contract calls on Jet Aviation to outfit an Airbus A320 as a corporate jet. The company has done similar work on the Boeing 757 and 767. It also does Gulfstream interiors.

Closer to NBAA 2000 in New Orleans, Jet Aviation is wrapping up an $11 million rebuild of its West Palm Beach FBO. "We have shed our older, conservative, all-business appearance for a contemporary tropical resort look," says VP/GM Michael Gregory, "We want the facility to reflect the ambiance of the South Florida." Night and weekend service for visiting aircraft is being expanded too.

At Teterboro the company is building a new terminal, and tripling tarmac area. Jet Aviation was busy just prior to NBAA 2000 planning a revamp of its FBO in Dallas, reports Hirschmann.

Jet Aviation has some 3,500 employees at 30 locations on four continents. "We're the biggest aircraft management company in the world and we're the biggest aircraft charter company in the world," Hirschmann says. Jet Aviation had 1999 revenues of $450 million-a record-and says profits were at record levels too. This year, says Hirschmann, is likely to be even better.

The company is also looking to establish another site in the Midwest, and wants to expand on the West Coast to augment a modest operation in Burbank. Jet Aviation is "under-represented" in those areas, Hirschmann says.

"The infrastructure is just too small," he explains, noting that Jet Aviation is working to position itself for a moderation in market growth, after which aircraft service and management, and a proper geographic base, will be even more important than they are now.

By Rich Piellisch