New CEO of Global Jet Capital optimistic about recovery
After a year of strengthening its capitalization, business aviation financier Global Jet Capital (GJC) is encouraged by the “long track” of demand it envisions as the pandemic begins to fade and markets are starting to reopen, recently appointed CEO Vivek Kaushal said.
Previously COO, he held the position previously held by Shawn Vick, who is now Executive Chairman. Kaushal, who joined GJC in 2015 with the acquisition of GE Capital’s business aircraft portfolio, takes on the new leadership role as the company prepares to relaunch business. âWe think there is a ton of pent-up demand,â he said. “We are seeing a lot of growth ahead of us.”
GJC (Stand 733, SD A507) was founded in 2014 by a group of seasoned senior business aviation executives and has grown significantly with the acquisition of the GE portfolio. In 2019, before the pandemic hit, it had one of its strongest years with a business aircraft portfolio of more than $ 2.6 billion. Also that year, the company expanded its international reach with the addition of full offices in Zurich and Hong Kong which joined existing facilities in Danbury, Connecticut; Boca Raton, Florida; and Mexico City. This allowed GJC to place its executives in key time zones and in the regions where its customers were based, Kaushal said.
All of this prepared the company as the pandemic struck. Like many businesses, GJC first responded to Covid by taking care of its employees and having them set up home offices. Then he focused on the customers; Kaushal noted that âwe told them we would be there for every delivery. And we were.
As the pandemic has slowed new business for the market, it has also tempered GJC’s growth. Its portfolio is still close to where it was in 2019, but Kaushal believes that had Covid not touched, the company would have been on track for further growth of 10-20%.
However, despite the turmoil in the market, GJC has seen little delinquency among its customers and no defaults, he said. Working in partnership with clients has been a “great experience and a great differentiator,” said Kaushal, adding that “people really appreciated the performance of our portfolio.”
GJC closed on an asset-backed securitization (ABDOS) in November 2020 which raised approximately $ 522 million, bringing its securitized assets to over $ 2.8 billion and bonds issued to over $ 2.3 billion. GJC followed that up with another ABS offering that raised around $ 663 million, bringing its total securitized assets to over $ 3.6 billion and bonds issued to over $ 2.9 billion.
âWe were the very first aeronautical securitization to return to the market [since the onset of the pandemic], and we reopened the market for aviation-related assets, âKaushal said, noting that in both issues, the GJC bonds put on the market were oversubscribed.
Investors have started to see the value of business aviation through the pandemic, including its efficiency, safety and security, he added. Plus, they saw the strength of GJC’s customer base. âThey have the ability to withstand very difficult times and that has been proven in spades,â he said.
Going forward, Kaushal added, âI really believe the pandemic is going to be part of everyone’s playbook,â and that will benefit business aviation. The industry is already in high demand, although some countries are just starting to open up and others have yet to reopen. âThe trends are accelerating in this market,â he said, noting that GJC has prepared for it with the teams it has put in place and the financial support it has put in place.
Kaushal noted that large-scale business aviation providers are growing, but “they’ll need capital to grow and we’ll be there.”
Additionally, newer additions to the market are also turning to rental options that give them more flexibility without the long-term commitment or worries about valuing long-term assets that may arise from ownership, a he declared.
âOur business is to provide access to business aviation,â he said, highlighting what he sees as a great opportunity for GJC. “This is a $ 30 billion a year deal market.”
Kaushal also thinks it is not a temporary bubble, saying: “We are in a very rational market”. OEMs are measured in their response to demand, he added. And while values ââhave risen, only a few sales have involved “eye-catching” numbers. Most are reasonable, he said, and mark a correction brought about by years of softening.
Back at NBAA, GJC can’t wait to reconnect with the market in a live show. âWe want to strengthen our commitment to business aviation and show our confidence in the industry,â he said, adding, âWe have the capital and a full product line. “