Gulfstream acquisition proves private jet market still soaring
General Dynamics, the conglomerate that owns private jet manufacturer Gulfstream, has acquired aviation services provider Jet Aviation for $2.25bn, a sign that the private jet market is still defying the global downturn.
Gulfstream's parent bought Swiss-based Jet Aviation with a view to extending its presence in Jet Aviation's foreign markets, particularly the Middle East.
The Middle East's private jet industry is growing by 18% a year, according to Sheikh Ahmed bin Saeed Al Maktoum, chairman of Emirates and Dubai City of Aviation Corporation, compared to the global average of 10%.
Shipments of business jets were up 40% in the first quarter compared to the same period last year, at 297 aircraft, according to the General Aviation Manufactuers Association.
It expects total sales this year to surpass the 1,138 aircraft sold in 2007, albeit by a small margin. Last year, sales were up 28% on 2007.
Jet Aviation runs 25 service centers around the world, compared to only 12 owned by General Dynamics, all but one of which are in the US, according to Halogen Guides, the specialist private aviation website.
Jet Aviation was formerly backed by private equity company Permira, which bought the business at a knock down price in 2005. The sale of Jet Aviation gave SVG, Permira's biggest investor, an impressive return of £84.2m ($156.9m), against an initial cost of £21.8m.
Last year, for the first time, buyers outside of the US accounted for the majority of private jet sales. With the private jet industry tilting more towards the international market, General Dynamics’ acquisition is a nod towards the increasingly global scope of the private jet industry.
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