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Gama Aviation has merged its U.S. aircraft management and charter operation with that of BBA Aviation, the companies announced this morning. UK-based BBA Aviation acquired Landmark Aviation's charter arm as part of its purchase of the Landmark FBO chain last year.
The combined business, which has more than 200 aircraft under its banner, will be managed by Gama Aviation LLC under the brand name Gama Aviation Signature Aircraft Management. According to the companies, there is synergy in the deal, as BBA’s Landmark fleet is predominantly West Coast-based, while Gama’s U.S. fleet is primarily based on the East Coast.
Though both parent companies are UK-based, to accommodate U.S. restrictions on foreign management of U.S. registered aircraft, Gama’s U.S. charter management business is operated by Gama Aviation LLC, of which Gama owns 49 percent, while BBA’s Landmark fleet is operated by its air carrier subsidiary Sterling Aviation LLC. Terms of the agreement call for Landmark to contribute 100 percent of its ownership in Sterling Aviation to Gama Aviation LLC, while Gama’s parent company will transfer its 49-percent share in its U.S. subsidiary to a new holding company GB Aviation Holdings LLC, which will be owned equally by the two companies.
“The enlarged business creates a market leader and an unrivaled platform for growing our share of this massive business aviation market,” noted Gama CEO Marwan Khalek. “The combination diversifies our customer base and extends our network coverage nationally whilst simplifying the financial arrangements with our U.S. partners. As part of this strategically important transaction, we are also excited by the potential to cross sell our U.S. maintenance services into the enlarged fleet.”
The transaction does not include Gama’s U.S. maintenance operations, which it will continue to operate separately as Gama Aviation Engineering.
After five months of negotiations, Gama Aviation merged its U.S. aircraft management and charter operation with that of BBA Aviation starting at the beginning of the year.
Signature Flight Support parent BBA acquired its aircraft management arm in last year’s purchase of Landmark Aviation, which had been aggressively building its charter/management division, reaching 120 aircraft at the time it was acquired.
The combined business brings 200 aircraft under its banner, making it one of the largest such service providers in the world, Gama claims. According to the companies, BBA’s Landmark Aviation fleet is predominantly West Coast-based, while Gama’s U.S. fleet resides primarily on the East Coast.
“This agreement marks another milestone for BBA Aviation, creating a leading charter and fleet management company, whose scale will benefit both of us and our customers,” noted BBA CEO Simon Pryce.
Both parent companies are UK-based, so to adhere to U.S. restrictions on foreign management of U.S.-registered aircraft, Gama’s U.S. charter management business is operated by its 49-percent-owned associate Gama Aviation LLC, while BBA’s Landmark fleet is operated by its air carrier subsidiary Sterling Aviation LLC. Terms of the agreement call for Landmark to contribute 100 percent of its ownership in Sterling Aviation to Gama Aviation LLC, while Gama’s parent company will transfer its 49-percent share in its U.S. subsidiary into a new holding company, GB Aviation Holdings LLC, which will be owned equally by the two companies. The combined business will be managed by Gama Aviation LLC, under the brand name Gama Aviation Signature Aircraft Management. “The formation of the new company is to host the foreign ownership,” Gama CEO Marwan Khalek told AIN, “just as a vehicle to own the 49 percent in the air carrier that Gama and BBA own on a 50-50 basis.”
The deal likely represents the last gasp of the Landmark Aviation name. When Signature Flight Support absorbed the Landmark FBOs into its network, BBA retained the name for Landmark’s aircraft charter management business.
The transaction strengthens the existing bond between the two companies, as Signature already serves as Gama’s preferred FBO service provider. “The reason we channeled the business to Signature [before] this deal is that we negotiated a good deal with them,” explained Khalek. “They have a big network, it was a good deal for our customers, and we see that deal becoming even better in the future because we’ve got more volume and we’ve got a relationship.”
The transaction does not cover Gama’s U.S. maintenance operations, which it will continue to operate separately as Gama Aviation Engineering. Gama is excited by the potential to drive business from the enlarged fleet to its U.S. maintenance services, Khalek added. “Yes, we will try and cross sell from our maintenance business into the fleet, but…whenever we are procuring anything for a managed aircraft, we always have to act in the best interests of our managed client, the aircraft owner,” said Khalek. “If that means doing the maintenance elsewhere, if that means using a different FBO because that suits them, that’s their preference, or that’s a better deal for them then we will do it. We will never channel that business to the wrong place if it’s not the best thing for the customer.”