On the Record With
Tom Hirschmann, Chairman and CEO, Jet Aviation

Diversification of Services and Geography

Offering more services in more places is the basic strategy of Jet Aviation, which lays claim to being the world's largest aviation services outfit.

Expansions in New Jersey, Texas and the U.K., and new FAA status allowing for faster modifications of aircraft, are just a few of the recent developments at the Switzerland-based firm.

Jet notched revenues of 795 million Swiss francs and operating profits of 55 million Swiss francs (approximately $524 million and $36.2 million U.S. at current rates of exchange) for the year 2001, making it the second best year in the company's 35-year history.

The results, says chairman and CEO Tom Hirschmann, "are remarkable in light of the impacts of 9/11, the weakened U.S. economy, and the overall state of the capital markets."

The numbers "validate the company's strategy of geographical and service line diversification," Hirschmann says, noting that "maintenance and completions services are the core of our business." Jet Aviation is perhaps better known for its charter and FBO activities in the United States, but it is making a concerted effort to step up its maintenance and modifications work here as well, he says.

Jet this year acquired a new engineering division in San Antonio, Texas. There, a new Designated Airworthiness Representative (DAR) can perform inspection functions that formerly required the presence of an FAA representative, thereby speeding interior mods and avionics installations.

In Teterboro, N.J., the company "opened a new state-of-the-art FBO facility and finished its ramp and hangar expansion," Hirschmann says. Ramp space was expanded by some 88,000 square feet and now totals more than one million square feet.

"Despite the difficult business environment in 2001, Jet Aviation made significant capital investments by improving its current facilities and capabilities and acquiring new operations in order to better serve its customers," Hirschmann told Show News on the eve of Orlando.

"In light of 9/11, it is crucial we show our presence and confirm confidence in the industry and our markets," Hirschmann says of this week's show. "We have made some significant investments in facilities, equipment and personnel to strengthen these services and our market share in the United States." Internationally, Jet has expanded in locales as far afield as Dubai and Dusseldorf, London/Biggin Hill and Hong Kong.

A third Boeing Business Jet and two BBJ IIs have just been added to Jet Aviation's managed fleet for a total of five BBJs in all.

"We expect steady growth over the next two years," Hirschmann says. "Depending on the economy, we also expect our workforce to be stable, with a slight increase in the number of employees."

As for the pending sale of Jet Aviation, Hirschmann's not saying. "When we have concrete information to release," he told Show News, "we will make a formal announcement."

Quietly For Sale
Jet Aviation CEO Tom Hirschmann is keeping quiet about his family's plans to sell the company, or at to least take in an equity partner. But you can't seek such help without word getting out.

"Jet's been quietly for sale for some time," says one industry man, who reports that the Hirschmann family would like to cash out. He points to reports that NetJets and/or parent Berkshire Hathaway are eyeing the Swiss company, although that's categorically dismissed as a rumor by NetJets vice president Kevin Russell, who says Jet Aviation "doesn't fit our business plan."

Jet acknowledges that Switzerland's Hirschmann Industrial Ltd., its parent company, has engaged Goldman Sachs for help with "strategic options" for the aviation services giant. These could involve selling all or part of the company.

A new corporate partner appears most likely, and would probably take a portion or all of the Jet Aviation equity now owned 100 percent by Zug-based Hirschmann Industrial. A Jet spokesman indicated last month that while there are negotiations in progress, it will likely be months before anything is publicized.

Jet Aviation was established in 1967 and now boasts more than 3,500 employees at upward of 60 locations in Europe, the United States, the Middle East and Far East, and South America. The company has more than 150 aircraft either managed or owned. It runs FBOs on four continents and performs completions of aircraft ranging from Bombardier Learjets up to and including the Boeing Business Jet.

About 60 percent of Jet Aviation's business activity is in Europe.