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Thu, Apr 13, 2023

Flexjet Scraps IPO Plans

In Service of Self-Determination

In October 2022, private jet flight provider Flexjet, Inc.—which includes fractional aircraft broker and operator Flexjet—announced plans for an Initial Public Offering (IPO) of stock through Billionaire Todd Boehly’s Horizon Acquisition Corporation II. On 12 April 2023, the company reversed course, stating it would remain privately held by its current owner, aviation investment firm Directional Aviation.  

In a press release, Flexjet chairman Kenn Ricci set forth: “Because we have been dedicated stewards of our capital, there will be no impact on the growth initiatives we have launched during the past several years, which remain full steam ahead.”

Mr. Ricci added: “We believe that the decision to terminate [the stock offering] at this time is in the best interests of our aircraft owners, employees, and other stakeholders.”

In an email to customers of its fractional ownership division, Flexjet CEO Mike Silvestro stated: “Over the past six months, we have been deeply entrenched in preparing our company for listing. During this process, it became evident to us that being a public company would result in significant outside influence by many who were not well-versed in our culture and who did not understand the passion that we share for the business. This lack of alignment was becoming a detriment to what makes Flexjet authentic, appealing, and genuine. The culture that we have built at Flexjet is not just a nice-to-have; it is the foundation of our business. It is what drives our success and ensures that we can continue to provide the exceptional service that you have come to expect. The risk that our most critical differentiator was in jeopardy, along with a less-than-favorable outlook in the equity markets, gave us serious pause.”

In a press release of his own, Todd Boehly—Horizon chairman, CEO, CFO, and well-heeled billionaire—remarked: “We have enjoyed and will continue our long partnership with Flexjet’s management team and respect their decision. We are glad that Flexjet and Horizon were able to agree to the termination in a manner that is fair.”

According to Security and Exchange Commission (SEC) filings, Flexjet will make a $30-million termination payment to Horizon.

Having retained full control of its finances and fate, Flexjet reasserted its 2023 growth plans, which include:

  • Taking deliveries of an additional 37 aircraft, thereby growing the company’s fleet to north of 270 aircraft (excluding helicopters).
  • Bolstering infrastructure, including the construction of additional private jet terminals; the expansion of the company’s in-house maintenance network and maintenance facilities; and the opening of a new Cleveland, Ohio headquarters featuring a state-of-the-art operations and control center.
  • Continued acquisitions of opportunity, such as Flexjet’s recent acquisition of MRO Constant Aviation.
  • Further expansion of the company’s helicopter operations.
  • Hiring across the organization, to include 388 additional flight crews and 338 aircraft maintenance technicians. In total, Flexjet expects to hire an additional 1,400 employees in 2023.

In 2022, Flexjet’s Sentient Jet division unveiled a booking-by-text application. Subject App enables the company’s jet card customers to receive booking confirmations via their smartphones in a matter of seconds. Flexjet has also invested in last-mile helicopter service and stylish aircraft interiors—collaborating with Bentley Motors Limited to co-design interiors for one of its Gulfstream G650s and a Sikorsky S-76. Flexjet, in 2022, acquired two rotor-craft operators and is currently refurbishing the aircraft of such. Continuing in the vein of rotorcraft, Flexjet, to date, has ordered two-hundred electric Vertical Take-Off and Landing (eVTOL) aircraft.

Notwithstanding Flexjet’s decision to remain a privately held entity, the subject of going public has not been permanently shelved. Mr. Ricci conceded: “Flexjet will remain opportunistic with respect to all capital markets and available opportunities moving forward.” Ricci concluded: “Flexjet and our other branded storefronts [Sentient Jet, on-demand broker FXAir, and European jet card and charter broker PrivateFly] are highly sought-after and trusted brands with forty-years of history in the aviation sector. In 2022, we outperformed the financial targets provided at the start of the SPAC transaction and continue to deliver significant cash flows and compelling year-over-year growth. Our position of strength gives us the flexibility to access the public markets at the appropriate time.”

FMI: www.flexjet.com

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