Leaner PrivatAir set for Middle East expansion
Geneva-based PrivatAir has gone through a restructuring aimed at making it a leaner, but still profitable company ready to embark on expansion in the Middle East. Formerly part of the Latsis Corp., the aircraft management and charter company was recently bought by a group of private investors, including long-time CEO Greg Thomas. Latsis, for its part, continues to maintain ownership of the C3 executive terminal that PrivatAir built on airport land at Geneva.
Currently, PrivatAir’s main business is comprised of wet leasing all-business-class single-aisle airliners equipped with long-range fuel tanks. This sector appears to have held firm during the recession thanks to long-term contracts it holds with airlines such as Lufthansa and Swiss. And, while its executive aircraft management business has slackened because owners are scaling down their operations, its PrivatPort FBO joint ground-handling venture with Swissport at Geneva continues to be viable as does its cabin crew training project, which started last year.
Bahrain Facility Planned
PrivatAir’s Middle East expansion plans are based on the assumption that the area will be more resistant to cyclic recessions than others because its economy is based on the world’s growing energy needs–mainly oil and gas. The company hopes to resume growth there after its downward restructuring in Europe and its retreat from the U.S. market two years ago.
At the Bahrain airshow in January, in fact, PrivatAir (Booth No. 1055) announced it will set up a facility in that country with an initial staff of about 20.
Target date for opening is July 1, with the focus of its activities in the busy Middle East market on executive aircraft charter and management.
The company reported sales of $160 million in 2009, down from $180 million the previous year. PrivatAir’s current business plan is based on an income of $130 million this year, with a profit.
Wet leasing of all-business-class airliners now provides about 70 percent of the company’s sales. It has three BBJ2s on wet lease to Lufthansa, one BBJ2 to Swiss and a BBJ1 to KLM, with contracts signed for three to five years.
To operate these aircraft, the company maintains offices in Düsseldorf, Munich, Frankfurt, Amsterdam and Zurich. PrivatAir hopes for follow-on contracts with airlines on the basis of a proven value for its services
For example, it envisions flights on behalf of Lufthansa linking Frankfurt to Pune, India, where the German automotive industry operates plants and where the airport’s short runway is not suitable for widebody airliners.
In addition to scheduled business-class flights, PrivatAir offers its own VIP-configured Boeing 757 and a 767 based in Geneva for charter. It also has two Boeing 787 Dreamliners on order, with delivery dates for both, initially scheduled for 2012 and 2016, moved to 2015.
Several management contracts for smaller executive aircraft based throughout Europe have ended, but PrivatAir remains active in executive charter and hopes to announce new management contracts in the near future.
The cabin training joint venture started last year in conjunction with the Ecole Hôtelière of Lausanne proved successful and will be continued. So far, some 50 cabin staff have been trained in stylish food service aboard executive aircraft, and another class of 20 recently started.
Because of recent downsizing, PrivatAir’s staff decreased from its 2009 total of 400 to 360, most of those being flight crew and office personnel.