JetDirect Signs LOI With Private Equity Firm

Kerry Lynch

Financially beleaguered JetDirect Aviation entered into a letter of intent with a private equity firm that will become the charter and management company's "control investor." The LOI came as Jake Cartwright, president of JetDirect Aviation, Inc., retired.

The company expects to close on the new investment by the end of February, following completion of due diligence, JetDirect Chairman and CEO Greg Campbell told clients in a Jan. 22 letter obtained by BA. The investors also agreed to provide interim capital to help the company meet client obligations before closing, Campbell said.

"The strong capital base that this will provide will help us build on the industry's most successful aircraft management platform, which traces its origins back more than 30 years to Aviation Methods and Wayfarer Aviation."

JetDirect operates a fleet of about 200 aircraft, and the company lost some of its clients from the uncertainty surrounding the company's financial future. But the majority chose to remain. Campbell thanked the company's clients for their patience, "particularly in the face of questions and rumors about our future," and said the new investors chose the company for its people and operator model. "Those are the assets and the platform upon which we will build," Campbell said. "Upon closing, we will be fiscally sound, as well as operating under the industry's leading safety and service model."

JetDirect has undergone a series of reorganizations over the past several months, including the sale of its fixed-base operations in Coatesville, Pa., Dallas-Love Field and Spirit of St. Louis airports, which were announced late last year. At the same time, the company also sold its wholly owned units Sunset Aviation and Presidential Jets back to their original ownership groups. Both Sunset and Presidential also were in the charter and management business, but operated smaller equipment and provided more regionally-based service than the larger JetDirect (BA, Jan. 5/3).

The company earlier had sold the Sentient Jet Membership and fuel management businesses of JetDirect Aviation Holdings to Macquarie Global Opportunities partners last summer (BA, Sept. 8/111).

JetDirect had grown rapidly after the original charter and management company founded by Campbell merged with Sentient Jet, which provided jet membership and jet card programs. But the company has experienced growing pains since the integration of the former aircraft management business of TAG Aviation USA and charter business of AMI Jet Charter after FAA revoked AMIJC's operating certificate in late 2007 (BA, Oct. 29, 2007/191). That integration, coupled with subsequent acquisitions, resulted in a number of different bookkeeping and billing systems and created a financial strain. The company refocused on its core charter and management business and began spinning off its other units.

Campbell last week took on the additional title of president of JetDirect Aviation after Cartwright decided to step down. Cartwright had agreed to stay with the company for a year after TAG Aviation USA was sold to JetDirect to help with the transition for employees and clients. "Jake's leadership has been critical through this most difficult period," Campbell said. "With this new investor commitment, that transition is nearly complete; Jake has decided to retire after 20 years as a senior company executive."

JetDirect, meanwhile, continued to shore up its support efforts by selecting Corporate Jet Support, Inc. of Moonachie, N.J. to serve as its preferred supplier for JetDirect's Gulfstream fleet. JetDirect's fleet includes more than 50 Gulfstreams.