Story ID: 818 GAMAconsolidate_EMBARGO.doc
Gama Aviation Predicts Further European Consolidation
By: Kerry Lynch
Caption: Gama Aviation says scale has become increasingly important to survival to lower cost base.
Word Count: 308
Gama Aviation, marking its first European aviation show as a newly merged company with Hangar8, foresees further consolidation of the European business aviation services sector as scale becomes increasingly important to survival. Now one of the largest charter and management services companies worldwide, Gama Aviation is hoping to leverage its size to drive down costs for its customers.
  
“The global business aviation services market is undergoing a fundamental shift from the situation a decade ago when new entrants were able to carry out niche operations,” Gama Aviation CEO Marwan Khalek said. “Fleet and private owners now want their aircraft to be managed by a well-run, efficient and successful company who, through economies of scale, can pass on huge cost savings.”
  
Since the merger with Hangar8, Gama Aviation has been able to renegotiate a 400-location global tender for fuel. The company added that it has been negotiating with providers of other “scale-led” procurement deals to produce other savings.
  
This is particularly important, as smaller business aviation operations have been strained by increasing costs from additional regulation, training and maintenance requirements. Gama Aviation estimated that the number of business aircraft operators in the European Union dropped 9 percent between 2012 and 2013, all of the decline coming from operators with fewer than 20 aircraft and largest decline coming from operators with 10 or fewer aircraft.
  
“Much of the European business aviation services market’s inadequacies stem from a highly fragmented supply side with no dominant providers, which leads to inefficiencies in operational logistics and service delivery,” said WingX Advance managing director Richard Koe. “In such a competitive and highly regulated marketplace, it is simply too inefficient for many smaller businesses to compete.”
  
Koe added he expects to see further mergers or collaborations as smaller companies seek to reduce costs and increase profit margins.