By buying Air Partner, one of the world’s largest charter brokers, Wheels Up gains immediate access to many European business jet flyers – as well as a significant number of American ones.
Wheels Up has been in early talks to buy European operators but there are fewer regulatory challenges with buying a broker (many countries prevent foreign ownership of air carriers).
The acquisition gives Wheels Up the chance to buy a largely European company at a time when the charter market has not yet reached the frenzy it has North America. Wheels Up, advised by Jefferies, is offering £1.25 per share, equivalent to an enterprise value of approximately $107m. Air Partner’s share price was £0.80 yesterday. In June 2007 Air Partner shares were £2.55 before falling sharply, in March 2020 – at the height of the first UK Covid lockdown –to £0.17.
Buying a brokerage is not a surprise or original. Directional Aviation acquired jet card company Sentient Jet in 2012 and PrivateFly in 2018. Vista Group bought US broker Apollo Jet in 2021 and JetSmarter in 2019.
Air Partner also adds new markets to Wheels Up – in line with its strategy to be the “Amazon of private jets”.
Air Partner’s group charter business – which ranges from government evacuations to conference travel – is just as important to the business as private jets. In its half-year results for the six months up to July 2021 Air Partner made a charter gross profit of £5m (down from a record £12.3m due to covid evacuation flights) compared with £5.9m from private jets (up from £4.6m).
The company also has a safety and consulting division including Baines Simmons which provides technical inspections for the Isle of Man Aircraft Registry. Air Partner also brokers some aircraft which fits in with Wheels Up Aircraft Sales.
Wheels Up went public through a SPAC (special purpose acquisition company) in November. It shares hit $9.65 but have since fallen to $3.6.
The Air Partner acquisition gives Wheels Up more customers (demand). But does not solve its fundamental problem of lack of aircraft supply in North America. It hopes technology – through its Avianis acquisition – will do this.
