Bombardiers Learjet. (Photo: Bombardier)
MonTREAL U.S. private equity firm Directional Aviation Capital is expanding its aviation activities by leading a group that has agreed to buy Bombardiers Flexjet fractional business aircraft ownership service for US$185 million.
The new owners have also ordered up to 245 Bombardier aircraft in a deal whose value could reach some US$5.2 billion.
The order the largest in Flexjets history includes a firm order for 85 business jets and 160 options for various Challenger and Learjet aircraft.
The firm order, valued at US$1.8 billion at current list prices, includes 25 Learjet 75, 30 composite Learjet 85, 20 Challenger 350 and 10 Challenger 605 jets.
Flexjet first entered the fractional jet ownership market in 1995 and is the worlds second-largest fraction company after Warren Buffetts NetJets.
In addition to managing business aircraft and offering charter brokerage services, Flexjet allows companies and wealthy individuals to own a portion of an aircraft or to purchase flight hours on its portfolio of Bombardier (TSX:BBD.B) aircraft.
Bombardier CEO Pierre Beaudoin says the sale of Flexjet allows the Montreal-based aircraft manufacturer to focus on its core business.
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This marks the next step in Flexjets evolution. With more than 18 years of experience in fractional jet ownership services, the organization has developed into a strong, profitable business supported by operational excellence, he said in a news release.
Beaudoin said hes confident that Flexjets new owners will grow and diversify the company globally.
This order is another very important endorsement for our Learjet and Challenger business jets. We look forward to having our products participate in the growth of Flexjet LLCs activities and its customer base, he added.
Flexjet will be added to Directionals portfolio that includes Flight Options, Sentient Jet cards and Sentient Jet Charter. It also has other aviation investments, including Nextant Aerospace, Constant Aviation, Everest Fuel Management, Sojourn Aviation, Spinnaker Air and API.
Directional said the addition of Flexjet will offer private air travellers a full range of choices, including fractional ownership, membership, leasing, jet cards and charter. The company will operate 150 aircraft that together will generate more than US$1.1 billion of annual revenues.
It has been our intent to find the best brand in each segment which can complement the product offerings of the other companies. Our vision for Flexjet is of a luxury brand with a young fleet, the latest technology, hand-crafted interiors and an unmatched owner experience, said Kenn Ricci, principal of Directional Aviation Capital.
With this historic order, Flexjet will remain a leading Bombardier customer and manager of the worlds largest collection of the manufacturers private jets.
Deanna White will continue to head Texas-based Flexjet LLC once the deal closes by year-end.
On the Toronto Stock Exchange, Bombardiers shares were up eight cents at C$4.80 in Thursday morning trading.
