By Alasdair Whyte, Corporate Jet Investor
Photo: Corporate Jet Investor
Brad Stewart’s business card simply says CEO and chairman, XOJET.
But he actually runs three different companies. There is XOJET, the fleet operator; the company’s Aviation Advisors, XOJET Private Client Services – the charter brokerage; and GMJ Shuttle, which operates corporate shuttles for Fortune 100 companies. He is now looking at adding aircraft management.
“These are all very different businesses but they are connected and stronger together,” says Stewart. “At one level the brokerage and XOJET’s fleet operations are both about advising and serving customers. There is a real synergy there. XOJET and GMJ – no one ever focuses on GMJ – are also the best operators of aircraft in the world – with the highest return on capital in the industry. They do not have to be under the same brand to benefit from synergies.
Stewart says that the three companies also benefit from scale including sharing a management team.
XOJet and its 41-aircraft fleet are included in the Floating Fleets section of FlightList PRO‘s multi-search platform along with all 232 floating fleet aircraft and 14 operators. Get your free 30-day trial here.
He says that he wants XOJET to be seen as a trusted adviser for individuals and companies looking to fly. This can include using XOJET aircraft or a fleet of 1,087 aircraft that have been vetted by his team. In 2016 much of the charter brokerage was focused on smaller or larger aircraft than XOJET operates. The company says that light jet and heavy jet charter was up 22%.
The three different businesses also give the company diversity. GMJ Shuttle runs corporate flights for large Fortune 100 businesses – a stable, profitable but slow growing division. Charter broking is profitable, relatively low-risk but low margin. XOJET – which owns its aircraft – is a riskier business with potentially higher rewards.
The company was founded in 2002 as PCMT by tech entrepreneur Paul Touw (now launching charter market Stellar). In 2006 it was renamed XOJET and ordered 12 new Cessna Citation X aircraft. In 2007 it raised finance from TPG – one of the greatest aviation investors ever – and Abu Dhabi fund Tasameem. It used this cash to placed orders for new aircraft including one for 20 Bombardier Challenger 300 jets worth $450 million. By 2012 it planned to be operating a fleet of 127 aircraft worth $3.1 billion. In April 2008 XOJET announced its international plans.
But then the global financial crisis hit. Demand for business jet charter fell sharply. The company was forced to change its business plan. Touw left (he has since launched Stellar a business jet charter marketplace). Stewart came in as adviser in 2010 and was promoted to president in 2013. “XOJET was effectively bankrupt in 2009 and 2010,” says Stewart. “The business model was not capable of surviving a terrible market so the company restructured in 2011 and 2012. It is much stronger now.”
The company had sales of more than $300 million in 2016 and Stewart says that it has been profitable for three years.
Part 1 of 3
By Alasdair Whyte, Corporate Jet Investor
Source: Alasdair Whyte, Corporate Jet Investor, 6/16/17
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