Story ID: 
Aircraft Management Industry Ripe for Consolidation
By: Chad Trautvetter
Caption: The challenge of finding good people, higher pilot salaries, and regulatory requirements will drive consolidation of aircraft management companies.
Word Count: 219
The business aircraft management segment is still highly fragmented and thus ripe for consolidation, a panel of industry veterans said on Wednesday at the Corporate Jet Investor Miami conference. In addition, the pilot shortage and quest for economy of scale will further drive this consolidation.

“The top 10 aircraft management companies have less than 10 percent of the managed fleet; that’s how fragmented this market is,” said Clay Lacy Aviation president and CEO Brian Kirkdoffer. “But consolidations are tough. We bought Key Air last year, and even though we thought the company aligned very well culturally, it took five times as many resources to integrate than what was planned.”

Meanwhile, the pilot shortage is pushing up costs. Jet Edge chief revenue officer Jonah Adler quantified this point, saying, “We have been able to find pilots, but the salaries have been crazy. We’re talking $295,000 to $305,000 for Global captains now,” he said.

“The challenge of finding good people, higher pilot salaries, and regulatory requirements will drive out smaller management companies,” added Marshall Myles of SkyService Business Aviation. “Acquisitions provide economy of scale. Besides lowering costs, a benefit of scale relates to the pilot supply issue. We have enough pilots that they can fill in for each other so they can take time off.”