Story ID: 323
OJets Develops Global Reach Beyond Asia
By: Ian Sheppard
Caption: Operating for a year now, OJets sees itself as a hawk whose wings can envelope the globe out of Asia.
Word Count: 1270
As OJets approaches its first birthday, in April, the Singapore Seletar-based charter company says its ambition is to take the Asian market by storm and offer its Asian-based customers high quality lift around the globe.
Chairman and co-owner Phil Mulacek, who with Marc Vinson bought the bankruptcy assets of a previous operator, told AIN that having AOCs in Europe and the U.S. (through Aviation Concepts Inc.), allows OJets to offer unique reach for an Asian operator. He described it as operating: “like a big hawk, with torso in Asia and wings spreading to the U.S. and Europe”—the world’s two leading markets. In this way, its (mainly) Asia-based clients have unfettered access to North America and Europe.
Mulacek said OJets has a solid financial base and owners who have “more than 30 years” of experience running the corporate flight department of his former company InterOil, which had a $5.2 billion market capitalization and was firmly embedded in the region’s oil-and-gas sector (the company was later sold to ExxonMobil). InterOil has had a flight department running fixed-wing aircraft and helicopters for “more than 15 years, with up to 15 aircraft [flights] a day shuttling some of our 1,800 employees back and forth, and to remote parts of the world.”
Not only does Mulacek purport to understand the region, he said he also appreciates the value of business aviation in providing flexibility and access. In fact, it was when its own flight department leased aircraft in the region that it realized “how poor Asia was” in what it could offer in the way of business aviation.
Charter Investment
In April 2018, OJets’s operations started using a Bombardier Global 6000 and a Challenger 650. The company had acquired a 30 percent interest in Elit’Avia Malta, part of Slovenian business aviation services provider Elit’Avia, enabling it to use its Maltese AOC (thereby giving its aircraft full access to the European Union).
Originally, it had planned to acquire 100 percent of Elit’Avia, with the latter’s co-founder Nick Houseman becoming OJets CEO. This later changed and Mulacek took over management of OJets, its focus being on owned aircraft charter while Elit’Avia dedicated itself to managing aircraft for owners.
“The economics of Elit’Avia did not meet our final criteria for further investment,” Mulacek said at the time, adding, “We will manage our charter investment directly. We built a $5.6 billion business as sole owners and are confident we can manage the $300 million aircraft enterprise to the growth we target.” However, OJets and Elit’Avia are working together with Houseman back at the latter and supporting OJets’s growth, said Mulacek.Phil Mulacek and Marc Vinson intend for Singapore-based OJets to give its Asian clients easy access to the dominant markets of North America and Europe.
The first two OJets aircraft were acquired with the assistance of China’s Minsheng Financial Leasing Co. Since then it has added four more Globals to its fleet (three Global 6000s and one Global 5000), according to Philippe Crevier, who recently joined OJets as senior executive v-p. Crevier was previously v-p and general manager of Jet Aviation Singapore.
The acquisition of Elit’Avia, based in Ljubljana, gave OJets an anchor in the European aircraft management, charter, and aviation services market—for example, its tally of owned and managed aircraft jumped from two to 23 overnight.
It also opened up global access—including flights to the U.S.—although Mulacek said work to obtain an FAA AOC (air operator certificate), to give full access to the U.S. market, is almost finalized. “Our three AOCs will give us the benefits of cabotage,” he pointed out.
“We were in aviation already and we’re more financially astute that most start-ups…we said if the entry price was competitive, we’d be OK to go with it. We have very good banking relationships too.”
He said the plan to go from a Part 91 operation to add Part 135, “to take passengers,” meant it started to recruit people with experience, such as Art Dawley, as director of operations (previously at Desert Jet), Todd Stranzcek (previously with Textron Aviation) as general manager maintenance, and Philippe Crevier.
Mulacek said OJets is preparing to unveil membership schemes, as it believes this appeals more than anywhere to the Asian clientele, who want to be able to rely on consistently high quality—rather than trusting to ad hoc charter as much as is the case in Europe and North America.
OJets also doesn’t draw the line at being an aircraft management and charter company, but says it would consider any business propositions­—including FBOs and maintenance. “We always look at every opportunity,” said Mulacek, “We’ll look at anything interrelated to leverage our business….anything in the Asia-Pacific, and we won’t exclude FBOs,” although Crevier added that the focus at the moment is firmly on establishing OJets as a fast-growing charter company. Generally, Mulacek noted, “all the major players in the industry have already been in touch with us, and there are things we’re working on that we can’t yet disclose.”
Mulacek continued, pointing out that the current economic and market conditions present “a good opportunity to buy aircraft, and with interest rates rising some [operators] will fail. Inefficient operators have been able to hang in there, but people’s cost of capital could spiral—and operators that can’t pay for upgrades [such as ADS-B] could struggle.”
The next step for OJets will be to acquire “a second tranche of aircraft” but what shape this will take, the company is “not ready to announce,” said Mulacek. However, he hinted that they would be “mid-range feeder aircraft” to “help our expansion, and take care of the one- to eight-hour flights.”
At ABACE in April, OJets plans to have one of its Globals on the static display and hopes to be able to announce its N-registered AOC then, if not before, said Mulacek. This will help in the U.S. as well as countries such as Japan and Canada, he noted. “We’re a hawk, remember!” It also hopes to unveil “some very unique programs that differentiate us from anyone else—programs for loyalty. We’re on the cusp of rolling that out too,” he said.
OJets is intent on garnering attention: “How many people have picked up seven aircraft in a year?”—and with plans for continued growth at this rate, and a parent company that is solidly behind OJets’s trajectory, Mulacek believes OJets will be turning heads at Shanghai’s Hongqiao Airport come the opening of the ABACE show on April 16. He is confident in the company’s strategy and believes it can succeed in Asia as, “there is nobody established here that can undermine you…but you have to be very delicate and understand how to work and do business in Asia—they appreciate quality and a more polished touch.”