Jet Aviation, founded almost 40 years ago in 1967 by the late Carl Hirschmann as a modest one-hangar FBO in Basel, Switzerland, has enjoyed constant growth ever since the company was acquired by European private equity company Permira Funds in mid-2005. At the time of the takeover, Jet Aviation employed a staff of 3,500 in Europe, the U.S. and Asia. Its activities included business aircraft management and support (with a fleet of 160 managed aircraft), fixed-base operations, maintenance, repair and completions, aircraft sales and brokerage, and executive charter.
Thomas Hirschmann, the founder’s son, led the company from 1990 to 2003. When he stepped down, he was replaced as CEO of the Jet Aviation Group by long-time staff member Heinz Koehli, until then president and chief operating officer of Jet Aviation Europe, the Middle and Far East.
Since Permira’s takeover, Jet Aviation has maintained or accelerated its growth, with the successful bid to run the new executive terminal at Germany’s Dusseldorf Airport and the acquisition of Midcoast Aviation in St. Louis, Missouri. Midcoast employs a workforce of 875 specialists in its facilities at St. Louis Downtown Airport and Lambert-St. Louis International Airport. Jet Aviation also has set up an office in São Paulo, Brazil, its first facility in South America, and started building a 45,190-sq-ft FBO and executive terminal at Viracopos/Campinas Airport, to be opened late this year.
On the eve of this week’s show in Geneva, Koehli agreed to offer some insights into Jet Aviation’s future strategy.
When the takeover of Jet Aviation by Permira Funds was completed early last October, you said the acquisition would put Jet Aviation on track toward faster global expansion. Is there really room for increased expansion, as the company has already in the past steadily expanded into most markets where growth seemed possible?
Yes, absolutely. A first step in that direction was taken mid-March with the acquisition of Midcoast Aviation, headquartered in St. Louis, Missouri. We are, however, continuously evaluating new opportunities, for example, in Russia, South America, India and China.
As Jet Aviation’s previous management and the board of directors seem to remain mostly in place, where does the drive for accelerated expansion come from? Is it increased capital input?
It was a clearly declared strategy of our new owners, Permira Funds, to accomplish a rather quick expansion of the company. The management team has remained in place because Permira recognized that Jet Aviation is a well-managed company. The board of directors has changed somewhat. Having increased capital in the company has certainly enabled Jet Aviation to expand in markets such as the U.S. within a short time of the sale to Permira.
Will Jet Aviation continue to operate as an independent unit for the foreseeable future and will it retain its identity as a Swiss company with most employees in Switzerland?
Jet Aviation will continue to be headquartered in Zurich, Switzerland. After the takeover of Midcoast Aviation, we now employ about 50 percent of our workforce in Switzerland, the other half of our staff work in our locations around the globe.
The acquisition of Midcoast Aviation in the U.S. is presented as a result of the new expansion policy initiated under Permira. Is that also the case for the successful bid to run the new Dusseldorf executive terminal?
The successful bid to run the FBO at the new terminal at Dusseldorf is mostly a result of a winning concept presented to the airport facilities and the fact that we have been operating at the airport for three decades.
Does the acquisition of Midcoast Aviation represent a sizable shift of activities to the U.S. rather than Europe?
Our goal is to grow Jet Aviation’s U.S. business to the same level as in Europe.
Can we expect more announcements of takeovers for this year?
We have not yet decided on any additional acquisitions. Our goal, however, is not only to grow by acquisitions but also through organic growth.
The business of Permira Funds is transactions. In the case of Jet Aviation, does this mean eventually selling off to a more permanent owner?
When you look at how investment companies operate, you will see that it lies in their nature to buy and sell companies. Right now, Permira will strongly support Jet Aviation in becoming the leading global business aviation service provider. This means, over the coming years, Permira will help us in our ambitious growth strategy. Within three to five years we probably are going to see an IPO [initial public offering] or a trade sale of Jet Aviation.
