Gama Aviation Releases 2017 Results, Underlying Profits Up 28 Percent

Gama Aviation experienced strong growth in 2017 as the business aviation specialist’s operations in the U.S., Asia, and the Middle East all ticked up. The U.S. performed the strongest, partly on the back of its contract with Wheels Up (which now has 12 bases) and the Gama Aviation Signature joint venture, which was created on Jan.1, 2017. While profit in Europe proved elusive in the year, the group is looking to bolster that side of its business and become less UK-centric, cofounder and CEO Marwan Khalek told BJT sister publication Aviation International News.

Of the £48 million (around $67 million) raised in an equity placing last month, $10 million has been earmarked for investment in two maintenance facilities in the U.S. (one on the East Coast and one on the West); $10 million for developing its Sharjah, UAE business aviation center; and the rest for “acquisitions in the Europe air and ground divisions and the Middle East air division.” Khalek said the European division “needs scale and needs to be more European.”

The company, which is listed on the UK’s Alternative Investment Market, recorded 2017 revenues of $207.4 million, up 5.8 percent, with underlying profit of $18.7 million. In the U.S., the new division created through the merger of its U.S. operations with the BBA aircraft management business (Landmark) rebranded as Gama Aviation Signature. Gama Aviation has a 24.5 percent stake in the venture, which saw “significant growth.” As a result, revenues for the the company's U.S. air-related activities increased 35 percent, to $518 million. This was also fueled by the “continued growth of our Wheels Up contract,” said the company. It added, “The integration of the BBA business is delivering the envisaged benefits: adding complementary West Coast coverage to the existing East Coast business, diversifying the client base, providing the ability to cross-sell maintenance services into Gama Aviation’s wholly owned U.S. ground business, and delivering cost synergies.”

In the Middle East, revenue grew 20.5 percent, to $23.5 million, and the division was “profitable for the first time,” returning $0.5 million. In October, Gama Aviation bought out Jet Set’s 51 percent stake in its Middle East ground division, seeking "a strong foundation for our planned development in the region.”

In Asia, Gama Aviation acquired Hutchison Whampoa’s 50 percent stake of its Hong Kong-based joint venture, with Hutchison becoming a strategic investor in the Gama Aviation group by taking a 20 percent stake. The group itself now also holds a 20 percent stake in Hong Kong Chek Lap Kok International Airport–based MRO provider CASL. “We’re very well placed in the Asia market…we’ve decided to use Hong Kong as our main base, while in a holding pattern waiting to see what happens in mainland China.”