* Aviation companies merge U.S. operations to create new flight giant
Two British business aviation companies have merged American operations, creating what they said is now the largest business aircraft management company in the U.S.
Gama Aviation PLC, a global business aviation service provider, merged its U.S. aircraft management and flight charter business with that of BBA Aviation PLC, to give the two companies a total of 290 business aircraft under management.
BBA Aviation's Signature Flight Support affiliate operates a fixed base station at the King County International Airport-Boeing Field in Seattle. It currently employs more than 100 workers.
Terms of the deal were not disclosed, but the companies said they would fold their respective assets into a new holding company which, when combined, creates a profit of about $10 million a year.
Gama Aviation LLC will continue to manage and operate the combined businesses going forward and will trade its new service offerings under the brand name Gama Aviation Signature Aircraft Management. Gama Aviation’s US Ground business remains a wholly owned subsidiary of the group.
The companies expect the new merged venture will generate "significant cost synergies of not less than $2 million over two years," Gama CEO Marwan Khalek said.
The merged companies said they don't expect the move will create new revenue this year or next, but they expect they benefit from cross-selling aircraft maintenance services to the enlarged fleet by 2019.
Stephen Vella, CEO of consulting firm Kestrel Aviation Management, said the merger transforms what were regional operations in a highly fragmented business aviation market into a new one with national geographical coverage for cross-country business jet users.
BBA’s predominantly West Coast-based fleet and operations will complement Gama Aviation’s East Coast-centric business, Vella said, creating a national network to enable it to seek out further growth.
The new entity will compete with two large U.S. companies in the highly fragmented U.S. market, Vella added, including Jet Aviation Flight Services, a General Dynamics affiliate and Executive Jet Management, a unit of Berkshire Hathaway.