says. That’s not to say that smaller operators in the space aren’t keeping up, he suggests. However, Riegel says those companies positioned themselves to make money not only by trading shares at the right price but also by operating their fleet profitably, or even supplementing income through chartered services. But Riegel maintains Jet It missed the mark to the point where, earlier in the pandemic, he did not recommend the company to his clients after he looked at its contract and pricing because he suspected it wouldn’t last. Moreover, he says the writing is on the wall for some other small operators, like the rapidly declining AeroVanti. AeroVanti launched in 2021 during the industry’s Klondike gold-rush moment. Still, the spoils for the private aviation company, which operated the Piaggio P-180 Avanti under a pay-as-you-go business model, found itself embroiled in controversy over charges of fraud. That now has the company facing multiple lawsuits, not to mention running amok of FAA regulations for commercial operators. Things seemed to be going well. In March, notes from Sarasota Manatee Airport Authority meeting minutes indicated the company was in the process of securing long-term hangar space—a $10 million investment for a 20-year lease—at that airport and even mentioned deals the company signed with the Tampa Bay Buccaneers, the However, Riegel says those companies positioned themselves to make money not only by trading shares at the right price but also by operating their fleet profitably, or even supplementing income through chartered services. But Riegel maintains Jet It missed the mark to the point where, earlier in the pandemic, he did not recommend the company to his clients after he looked at its contract and pricing because he suspected it wouldn’t last. Moreover, he says the writing is on the wall for some other small operators, like the rapidly declining AeroVanti. AeroVanti launched in 2021 during the industry’s Klondike gold-rush moment. Still, the spoils for the private aviation company, which operated the Piaggio P-180 Avanti under a pay-as-you-go business model, found itself embroiled in controversy over charges of fraud. That now has the company facing multiple lawsuits, not to mention running amok of FAA regulations for commercial operators. Things seemed to be going well. In March, notes from Sarasota Manatee Airport Authority meeting minutes indicated the company was in the process of securing long-term hangar space—a $10 million investment for a 20-year lease—at that airport and even mentioned deals the company signed with the Tampa Bay Buccaneers, the says. That’s not to say that smaller operators in the space aren’t keeping up, he suggests.
University of Maryland Terrapins, and the University of Central Florida Knights to be their exclusive private aviation partners. But how quickly things changed. By April, news of the trouble at the company bubbled to the surface as the FAA began to probe AeroVanti’s operating practices and procedures. Shortly after, lawsuits began, and by June, the company grounded its fleet and suspended its services. In the last week of July, Patrick Britton- Harr, AeroVanti’s embattled chairman and CEO, departed. His replacement, Scott Hopes, is now doing what he can to stave off the certain rigor mortis the operator is facing. And those are just two operators. Aside from those that have shuttered, others have faced FAA enforcement actions involving either a civil penalty or the issuing of a certificate suspension or revocation. In its latest report at the end of March, the FAA said it sanctioned 20 operators for recent offenses. And those are just two operators. Aside from those that have shuttered, others have faced FAA enforcement actions involving either a civil penalty or the issuing of a certificate suspension or revocation. In its latest report at the end of March, the FAA said it sanctioned 20 operators for recent offenses. The most seismic news of the year’s first half came in May when Wheels Up announced that its founder and CEO, Kenny Dichter, would step down amid another quarter report of losses. Dichter founded the company in 2013 and brought it public on the New York Stock Exchange in 2021, but he struggled to make the company profitable as its number of active members and live legs shrank. The company also found itself The most seismic news of the year’s first half came in May when Wheels Up announced that its founder and CEO, Kenny Dichter, would step down amid another quarter report of losses. Dichter founded the company in 2013 and brought it public on the New York Stock Exchange in 2021, but he struggled to make the company profitable as its number of active members and live legs shrank. The company also found itself University of Maryland Terrapins, and the University of Central Florida Knights to be their exclusive private aviation partners. But how quickly things changed. By April, news of the trouble at the company bubbled to the surface as the FAA began to probe AeroVanti’s operating practices and procedures. Shortly after, lawsuits began, and by June, the company grounded its fleet and suspended its services. In the last week of July, Patrick Britton- Harr, AeroVanti’s embattled chairman and CEO, departed. His replacement, Scott Hopes, is now doing what he can to stave off the certain rigor mortis the operator is facing.
Fractional aircraft company Jet It announced suddenly in May that it was shuttering operations, leaving aircraft owners to scramble to find new homes for their shared HondaJets. Fractional aircraft company Jet It announced suddenly in May that it was shuttering operations, leaving aircraft owners to scramble to find new homes for their shared HondaJets. Volato announced in early August its plans to become a publicly traded company through a SPAC merger with an enter- prise value of $261 million. The company will trade on the New York Stock Exchange under the symbol NYSE: SOAR. Volato announced in early August its plans to become a publicly traded company through a SPAC merger with an enter- prise value of $261 million. The company will trade on the New York Stock Exchange under the symbol NYSE: SOAR.
embroiled in a class-action lawsuit, had to dispel rumors of bankruptcy, and needed to complete a reverse stock split in June to prevent being delisted from the NYSE because of such a low share price. Fast-forward to early August, a day before the company was supposed to report its second-quarter earnings— which it would eventually postpone. FLYING reported that the company was seeking emergency funding to keep its operations going because of its dwindling cash and “substantial doubt” it could stay in business. Delta Air Lines, which owns a fifth of Wheels Up, later stepped in to provide the funding for the flailing company reportedly to the tune of $500 million. Wheels Up said it also entered into a nonbinding agreement to sell off its aircraft management business to Airshare, bolstering that firm’s management business. Now, the jury is out on whether or not Wheels Up can turn things around or it has peaked. KNOWING YOUR BOOK As for why the industry is being challenged like this, Riegel believes it is rooted in a need for more competency at the C-suite level. “Most of the failure of these companies is because too many of the companies starting up have leadership teams that don’t know aviation at all or have no As for why the industry is being challenged like this, Riegel believes it is rooted in a need for more competency at the C-suite level. “Most of the failure of these companies is because too many of the companies starting up have leadership teams that don’t know aviation at all or have no embroiled in a class-action lawsuit, had to dispel rumors of bankruptcy, and needed to complete a reverse stock split in June to prevent being delisted from the NYSE because of such a low share price. Fast-forward to early August, a day before the company was supposed to report its second-quarter earnings— which it would eventually postpone. FLYING reported that the company was seeking emergency funding to keep its operations going because of its dwindling cash and “substantial doubt” it could stay in business. Delta Air Lines, which owns a fifth of Wheels Up, later stepped in to provide the funding for the flailing company reportedly to the tune of $500 million. Wheels Up said it also entered into a nonbinding agreement to sell off its aircraft management business to Airshare, bolstering that firm’s management business. Now, the jury is out on whether or not Wheels Up can turn things around or it has peaked. KNOWING YOUR BOOK
business aviation background,” Riegel says. “They bring in people from other parts of the aviation world that fail to understand that the fractional business is a unique business.” He seems to be right. The common threads across the fallout of Jet It, AeroVanti, Wheels Up, and others appear to be incorrect unit economics and simply offering customers a product that they honestly couldn’t have afforded, meaning they wouldn’t have stuck around when the actual price of delivering it would need to be paid. Shelly Svoren, founder and CEO of Infinite Branches, adds some context. Svoren has worked in finance for more than 30 years and was a senior business banking analyst for First Republic Bank for over 16 years, overseeing a portfolio that originated more than $1 billion in aviation-secured loans and financing facilities for aviation service providers such as Part 135 and wholly owned aircraft operators. “Few lenders directly finance fractional shares, and those that do finance these contracts only do so for a relationship with a select group of fractional share providers that operated through multiple business cycles,” Svoren says. “I do not see that changing when the perfect mixture of the needs of an important client meets the requirements of a financial institution’s Shelly Svoren, founder and CEO of Infinite Branches, adds some context. Svoren has worked in finance for more than 30 years and was a senior business banking analyst for First Republic Bank for over 16 years, overseeing a portfolio that originated more than $1 billion in aviation-secured loans and financing facilities for aviation service providers such as Part 135 and wholly owned aircraft operators. “Few lenders directly finance fractional shares, and those that do finance these contracts only do so for a relationship with a select group of fractional share providers that operated through multiple business cycles,” Svoren says. “I do not see that changing when the perfect mixture of the needs of an important client meets the requirements of a financial institution’s business aviation background,” Riegel says. “They bring in people from other parts of the aviation world that fail to understand that the fractional business is a unique business.” He seems to be right. The common threads across the fallout of Jet It, AeroVanti, Wheels Up, and others appear to be incorrect unit economics and simply offering customers a product that they honestly couldn’t have afforded, meaning they wouldn’t have stuck around when the actual price of delivering it would need to be paid.
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