- Private jet management firm Jet Linx is acquiring Meridian, a Teterboro, New Jersey-based charter firm with $365 million worth of aircraft.
- Jet Linx CEO Jamie Walker orchestrated the deal with Meridian and closed the deal on Tuesday even as the pandemic is in full swing.
- Despite the economic downturn associated with the pandemic, Walker says his experiences during the 2009 crisis shaped his decision making to “charge ahead” with expansion plans.
- Visit Business Insider’s homepage for more stories.
The early days of the pandemic saw Omaha, Nebraska-based Jet Linx lose around 85% of its business and furlough 30% of its workers as the country went on lockdown. There was nowhere for its fleet of luxury jets to fly as the virus marched across the US and shuttered the country’s cities.
Most businesses were struggling to survive but Jet Linx CEO Jamie Walker was eyeing expansion, hearkening back to 2009 when he opened a new private terminal and base in Dallas despite the similarly-grim economic landscape of the economic crisis.
Now three months after the pandemic’s initial hit, Walker is announcing his company’s acquisition of the charter and management business of Teterboro, New Jersey-based Meridian. The deal will see Jet Linx add 23 of Meridian’s aircraft to its managed fleet, valued at $365 million based on retail prices, and establish itself as the second-largest jet management firm in the US while giving it a stronger foothold at Teterboro Airport, among the busiest executive airports in the US and a jumping-off point for flights to Europe.
Here’s why Walker pursued the deal and why his guiding principle during the pandemic is ‘charge ahead.’
A business lesson learned in 2009
When Jet Linx expanded to Dallas in 2009, it was not the best time to be in the private jet industry or pursuing expansion. As Walker recalled, the market was still collapsing when he decided to move forward with plans to open a private terminal in Dallas.
“We had made the determination that if there’s ever a better time to start a new location, it would be coming out of a recessionary period,” Walker told Business Insider, which shaped his thinking on expansion when the economy took another turn for the worse 11 years later. “So having done it once already, it was an easier decision to make this time around.”
Walker had been preparing for another recession as economic trends dictate that a recession occurs every three to four years, according to Cameron Keng, founder of the CPA firm Keng Group in Forbes. That trend has largely been bucked over the past few years with the US experiencing continued economic success since the end of the last recession but economic downturns are inevitable.
“Although no one would have guessed the pandemic to accompany the next recession, we were mentally prepared to make some hard decisions and push forward against a negative headwind,” Walker said.
Walker’s Dallas bet inevitably paid off as the economy did recover and Jet Linx has grown to 18 locations, including a new flagship terminal at Teterboro. Now, he wants to do it again with Meridian, the latest in a series of acquisitions for the company with this one giving Jet Linx 23 more aircraft.
Making a major acquisition after receiving federal aid
The acquisition comes a few months after Jet Linx received Paycheck Protection Program funds to the tune of roughly $20 million which didn’t go unnoticed thanks to donations by some in the firm to the Trump campaign. ProPublica reported that nearly $70,000 was donated to Republican Party-affiliated campaigns and committees by the company’s vice chairman, John Denny Carreker.
Walker denied that his firm was using the funds to fuel his expansion, saying that the relief was required to prevent further furloughs at Jet Linx. The CEO did admit, however, that he was concerned about the optics of promoting a deal after taking the funds due to what he views as the public’s misconception when it comes to the private jet industry.
“I know that when people hear the terminology ‘private jet’ they think that it’s not for the public and we’re an essential service for the public, just like the airlines are,” Walker said. “So we would have furloughed that group and, unfortunately, there will be people that – by nothing that they did to disrupt our business –would be the casualties of this pandemic.”
Whether or not the firm received the funds would not have impacted the deal, Walker said, but furloughs would have likely continued.
“It’s unfortunate because the jobs that we’ve kept should always remain the focus,” Walker said. “Whether you’re selling widgets or private jets, it’s about keeping people employed and a paycheck coming in so they can pay their rent and buy groceries and pay their car leases and everything else.”
Private jet travel will rebound sooner rather than later
Walker is predicting that his business will return to 2019 levels by mid-2021, years ahead of what major airlines are anticipating. Some wealthy travelers are too scared to fly commercial, he explained, and that’s good for the private jet industry.
“It’s picked up more than I thought it would,” Walker said when asked about the bullish predictions he made in an April interview with Business Insider. “Unfortunately a lot of it has to do with just the fear of flying commercial.”
After experiencing a drop by around 85% in April, traffic has picked up consistently in May and June for Jet Linx. July 2020 will see 25% less traffic than the year prior. That trend is being echoed across the industry as aviation safety regulator Argus noted a steady increase in charter flights by in both months, showing a positive trend for the industry.
Jet Linx is also seeing more first-time customers that are flying private more so than just the existing customer base, according to Walker. Around 90% of new jet card signups — where flyers prepay to receive locked-in aircraft rates — were from first-time customers since the pandemic began.
As Business Insider reported in June, private travel patterns have been largely upended as the wealthy head to off-season destinations where they can easily social distance or newly-reopened regions. Jet Linx told Business Insider last month that the newly reopened states of Texas and Georgia were among its top destinations.
Come September, travel patterns will change and Jet Linx’s top concern is that business travel won’t bounce back.
“We really need business travel and start coming back by September, because I believe the leisure travel after the summer is going to subside,” Walker said. “And we could drop back down a little bit if there’s not a recovery from the business flyers.”
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