XOJet, America’s third largest private jet leasing company, struggled in the crisis of 2008 but has been a lot more financially airborne since the arrival in 2010 of Brad Stewart, the turnaround expert who is now the company’s chief executive..
Revenues have more than trebled from $100m in 2009 to between $300m-$400m, while earnings before interest, tax, depreciation and amortisation increased by 33 per cent to about $50m in 2014, having been in negative territory five years earlier.
The company, founded in 2006, has 5,000 clients, access to 1,000 jets and a position as America’s third largest private jets group behind Berkshire Hathaway’s NetJets and the portfolio of brands including Flexjet, Sentient and Flight Options that is owned by Directional Aviation Capital. It claims its jets are never more than an hour away that someone in North America who wants to buy a journey on one.
America’s private jets sector is certainly bouncing back. According to the Luxury Goods Worldwide Market Study of consultants Bain & Company, private jet sales accounted for $23.7billion of the total of more than $1 trillion that was spent in the luxury market in 2014.
Stewart believes there’s been an s-curve recovery from the nadir of 2007-2009, when demand for private jets in North America fell by 25pc.
Jet-Setting In The Sharing Economy: Brad Stewart
“We’ve seen four years of recovery growth and my own take is that the industry is going to approach growth rates that are more consistent with GDP growth plus a point or two, as long as the stock market and corporate earnings continue to do well,” he says. “I would expect industry growth rates of between 4-5 per cent. It’s a good time to be in the private jet marketplace. Today is the global age of private aviation consumption. It’s never been easier and cheaper if you’re a private jet consumer to find a decent service provider.”
A Jet-Fuelled Sharing Economy
However Stewart wants to take XOJet a lot further and is eyeing the sharing economy best-known for peer-to-peer taxi service Uber and home-sharing company Airbnb, which both count XOJet’s private equity owner TPG Capital as an investor. Stewart sees TPG’s interest in the sharing economy, which also includes investment in Ride.com, as a platform to help XOJet benefit from the trend. And it is certainly true that cars, homes and jets are all capital-intensive commitments that are under-utilised.
“They’ve been with us through thick and thin,” says Stewart of TPG, which invested in XOJet in 2007. “They could have walked away in 2009 so easily and some might argue that they should have done. But they have maintained their commitment. They brought me in and have helped rebuild this business. They’re great sales guys, connecting me with clients and prospects almost weekly. And in their Uber and Airbnb ownership, they are so connected across the timesharing on-demand marketplace that these companies are in.
