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Elevate Holdings Promises Keystone Aviation Acquisition ‘First Of Many’

Little known Elevate Holdings, Inc., the New Hampshire-based parent of Private Jet Services Group, is promising its acquisition of Keystone Aviation is “the first of many.” It starts the year with the likelihood of more M&A activity, and it also brings a new player into the deal market.

Greg Raiff, Founder and CEO of Elevate and PJS Group, says he believes there are many smaller operators ripe for consolidation but not big enough to attract the attention of big players.

Over the past several years, Wheels Up Experience snapped up Delta Private Jets, Gama Aviation Signature, Mountain Aviation and TMC Jets while Vista Global Holding expanded with XOJet Aviation, Red Wing Aviation and Talon Air. Directional Aviation, parent of Flexjet and Sentient Jet, FlyExclusive, Jet Linx Aviation and Jet Edge, have all made acquisitions as well.

Still, the 30 largest companies in the charter and fractional market control less than 30% of the market, with Berkshire Hathaway’s NetJets, Inc, including NetJets and Executive Jet Management, holding a dominant 11% share.

Keystone will add 13 charter aircraft to Elevates six, and in the fragmented U.S. market, likely put it among the 20 or so largest players. Aircraft range from large cabin Gulfstream and Bombardier long-range jets to single-engine Pilatus PC-12 turboprops. Only about 60 charter operators have at least 10 jets in their fleets, according to Tuvoli, a provider of payments services connecting brokers and operators.

For Elevate, Raiff says the deal is foundational in achieving his vision of having a vertically integrated business aviation services provider. The privately held group was founded after selling a $7 million Spring Break travel company he started while attending Middlebury College. Until launching a jet card program in 2015, PJS focused mainly on VIP charters of large aircraft for sports teams, live entertainment tours, political campaigns and corporate shuttles.

With Elevate, he expanded into aircraft management, something he expects to turbocharge with the Keystone Acquisition. While Elevate manages aircraft at various locations, Keystone had been focused on several bases in the West. Raiff says bringing the two approaches together is “like combining peanut butter and chocolate.”

The deal also adds Keystone’s maintenance and repair organization, something that’s becoming increasingly critical. Operators without in-house maintenance find it more challenging to book slots for repairs as MROs struggle to hire back staff and supply chain issues delay replacement parts.

“We believe the business aviation industry needs a provider large enough to deliver benefits at scale to its clients without sacrificing the personal touch so critical in a high-end service business,” Raiff adds.

While declining to disclose revenues, the deal will double Elevate’s headcount to around 200 full-time employees. Keystone management will remain in place, says Raiff. The company is working on branding, with Elevate to remain as the holding company, Keystone as the operator and management arm, and PJS as the brokerage. Additional brands may be developed for other segments of the business.

This latest deal comes as private air travel in the U.S. hits record levels. Argus TraqPak expects January flying to be 38% higher than 2021. Data from WingX shows charter and fractional flights were up 71% over New Year’s week compared to pre-pandemic 2019-2020 numbers.

The record demand and supply chain issues have meant jets that used to be available in the broad charter market are now being reserved for use by members of the acquirers’ jet card programs. Wheels Up has over 10,000 members, for example.

Raiff says in the cases of PJS and Keystone, the two units will operate separately, with “each management making the best decisions based on the needs of their clients, not some type of corporate synergy play.”

S: Forbes

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