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Stability Through Strength

Jet Aviation’s Peter Edwards sees growth and stability ahead.

Outside the halls of the Orange County Convention Center the world’s banking- finance and stock market institutions provide the force behind an economic maelstrom that threatens to degenerate into a depression with global implications. Inside the hall- the impact of the maelstrom outside- many predict- will be relatively light and comparatively moderate in impact.

Among the 30-000-plus attending the 61st National Business Aviation Association Convention- the economic storm seemed to contribute to an atmosphere much muted compared to the prior three or four years. But confidence in the resiliency of the business aviation community remains strong overall- and nowhere more so than around the exhibit stand of Jet Aviation and its U.S. completions and maintenance wing- Midcoast Aviation.

Further- no person seems to exude that calm more naturally and sincerely than the CEO of Jet Aviation- business aviation veteran Peter G. Edwards. He concedes that times are challenging. Like many others- he notes the drop in business aviation flight hours and a decline in some related business lines. But he expresses confidence in his company’s diversity and balance- and noted that in Jet Aviation’s dominant business lines- the outlook remains strong stretching out several years.

“We have good balance across our lines-” he told World Aircraft Sales Magazine- noting that in Jet Aviation’s strongest businesses- “There’s really no softening effect.” Overall- Edwards sees a resiliency in business aviation that seems reflective of the past turmoil the industry has survived.

Grounded by his Background
Edwards benefits from nearly three decades in the field- with long- successful stints at major players like Bombardier- Gulfstream and AiResearch. He received his current appointment in May 2007- and he came to a company in a state of flux after the family of founder Carl W. Hirschmann sold Jet Aviation to the Permira Funds in October 2005.

Jet Aviation boasts facilities in every continent- with close to 6-000 people working to service- complete- manage and operate business aircraft. The company’s completion business tends toward the large- and ultra-large end of the fleet- and its management and charter services provide service around the world with more than 200 aircraft on tap.

During his tenure- Jet Aviation has made ground-breaking advances in Russia and China- embarked on expansion efforts in the Middle East and South America- and continued to grow its businesses in Europe – its largest market – and in North America.

Earlier this year- Gulfstream’s parent General Dynamics penned a deal to acquire Jet Aviation and its subsidiaries in a transaction worth about $2.25 billion. While the final aspects of the Jet Aviation transaction are expected to close before year’s end- and with the economic turmoil of the past months casting uncertainty on so many aspects of business- Edwards’ message was one of calm and stability. Continued growth and stability- he told World Aircraft Sales Magazine- should be one of the benefits employees and clients alike enjoy from Jet Aviation’s relationship with its new parent.

“We look forward to our role as part of General Dynamics’ aerospace portfolio-” Edwards explained.

Going Forward With Strength
So far- Edwards noted- the biggest impact on business from the economic downturn has been felt in hours flown and charter flights booked. Most sources peg the decline in business flying at about 20 percent.

Edwards acknowledged that Jet Aviation’s FBO business has seen the drop in fuel sold and maintenance work needed. “Our charter business is also down a little-” Edwards noted- “but it’s just part of our overall mix.” In other areas- Jet Aviation continues to grow with its long-term expansion plans untouched and continuing with vigor.

Indeed Jet Aviation signaled how proactive it will be going forward in some of its NBAA news – an agreement to expand further into Russia- continued growth in China- and new completions work- among its most significant lines of work.

In the evolving Russian market before NBAA opened- Jet Aviation signed a Memorandum of Understanding with Russia’s Vnukovo Invest to form a joint venture with the firm- co-owner of Vnukovo International Airport in Moscow. And already- Jet Aviation offers factory-authorized service for Bombardier and Gulfstream customers. “We’re the only third-party provider that has succeeded in setting up meaningful technical support for business aircraft in Moscow. We’re turning wrenches now and are pursuing a significant expansion.”

The new partner Vnukovo Invest is already engaged in construction of a new- larger 32-827-square-foot maintenance hangar to be utilized by Jet Aviation at Vnukovo to complement the 10-000-square-foot facility now in use.

Meanwhile in Beijing- Jet Aviation began offering limited FBO service just ahead of the recent Olympics and the company is proceeding with construction of permanent facilities in what it doubtless wants to be but the first of its facilities for China’s growing aviation market. “We need to finish out our initial development work in Beijing-” Edwards explained. “We opened just ahead of the Olympics and we’re working to complete our facilities there.” He expects completion for the Beijing facility in the Spring of 2009.

Completions Remain a Strong Suit
Meantime- Jet Aviation enjoys a first-class reputation for its completions work- with projects stacked up and growing – a prospect that remains good long-term- Edwards noted. “Completions work doesn’t seem affected at all-” Edwards said- reflecting on Jet Aviation’s strong backlog. “So there’s really no visible softening effect at this point.”

Underpinning Edwards’ comments was the announcement at NBAA that Jet Aviation had signed a Letter of Intent to outfit the first two VIP versions of the Airbus A350-900 XWB Prestige for customers in Asia. These projects are slotted for the 2014-2015 period- and represent a continuing nod of confidence in Jet Aviation’s abilities in planning- executing and delivering on massive wide-body projects.

The same goes for the company’s aircraft management line- with the managed fleet continuing to grow. Forecasts for the continued growth of the worldwide business aircraft fleet portend well for Jet Aviation. That means- Edwards observed- more business opportunities for everything from maintenance- to charter- to completions work.

And with a long-respected ability to plan ahead and execute according to plan- Jet Aviation does not seem to be even a minor candidate for a damaging slip as it manages in an uncertain economic environment.

Asia- Middle East- Everywhere is Growing
If business aviation is growing- it seems like Jet Aviation either is there- or has plans to go there to grow with the fleet. Edwards noted- “The Middle East is particularly active and should continue to be strong.” In keeping- Jet Aviation boasts facilities in Dubai- in the United Arab Emirates- as well as in Jeddah and Riyadh- in Saudi Arabia.

“I believe the Asia market will continue to be vibrant and should avoid the harsher aspects of the prior Asian cycle-” Edwards added. In addition to its fledgling presence in Beijing- Jet Aviation is well-established in Singapore- a significant crossroads for business in the Pacific Rim.

And we can’t forget the continued expansion of Jet Aviation in North America- where subsidiaries Midcoast Aviation and Savannah Air Center also continue to grow and expand. In late September- Midcoast celebrated the opening of a new 146-000-square-foot narrow-body hangar – its largest ever – at its headquarters base on St. Louis Downtown Airport. And earlier in the year- Savannah Air Center completed work to double its capacity for large business jets.

Across its network- Edwards noted- Jet Aviation’s MRO business continues to drive the need for additional maintenance space. “India and Latin America are also areas we want to tap- but right now- our plate is rather full.”

GD Closing Near
“We have not yet closed the sale (to General Dynamics)-” Edwards noted. “We’re still in the midst of the regulatory review.” The review is tracking according to expectations and confidence is high that the deal will soon be cleared. “We still expect closing well before the end of the year.

“At that point- we start a new chapter for Jet Aviation and our employees are pretty excited-” Edwards added. “This transaction resolves the question of ‘what’s next’ that we’ve had with us for the past couple of years.”

The acquisition by General Dynamics is- Edwards said- a great fit for Jet Aviation. “I think we can add a bit (to GD’s business-base) and we can gain a lot. We’re happy to be in the great position we’re in.”

Given the swirls of uncertainty other aspects of aviation suffer these days- Jet Aviation appears poised to ride out the turbulence in fine form. With the calm- knowledgeable direction of Edwards and his staff on tap- and a promise of continued independence for the company from its new owner- Jet Aviation appears ready to come out of the storm stronger than when the storm struck.

More information from www.jetaviation.com


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