BBA Aviation creates aircraft company with Gama Aviation

BBA Aviation plc, a UK provider of global aviation support and aftermarket services, has announced the merger of its aircraft management and charter business with Gama Aviation’s US aircraft management business.
With around 200 airplanes under management, the combined entity, Gama Aviation Signature Aircraft Management, will be one of the world’s largest aircraft management and charter businesses, supported by the exceptional and market-leading Signature Flight Support global FBO network, 10 million metres squared of hangars and an extensive fixed and mobile line maintenance, Aircraft on Ground and engine support capability.
Commenting on the announcement, Simon Pryce, Chief Executive of BBA Aviation, said:
“This agreement marks another milestone for BBA Aviation, creating a leading charter and fleet management company, whose scale will benefit both the Group and our customers. We look forward to working with our partners at Gama Aviation to develop and grow the company in the years ahead.”
Marwan Khalek, Chief Executive of Gama Aviation Plc said: “We are delighted to announce this exciting deal and to be teaming up with BBA Aviation in the US. The enlarged business creates a market leader and an unrivalled platform for growing our market share of this massive business aviation market. This combination diversifies our customer base and extends our network coverage nationally whilst simpliflying the financial arrangement with our US partners.”
BBA Aviation acquired its aircraft maintenance and charter services business through the acquisition of Landmark Aviation, completed in February 2016, and which was placed into a trust until a suitable majority partner could be found to satisfy the requirements of the US Department of Transportation’s foreign ownership and control restrictions, which this transaction achieves. While in trust, the aircraft management and charter services business has been accounted for as an associate via the equity method with cash flows arising recognised in form of dividends; the same treatment will apply following completion.
BBA Aviation and GAMA Aviation are combining their US aircraft management and charter businesses, which in the year ended 31st December 2015 delivered profit before tax of $5.5 million and $4.3 million respectively. BBA Aviation and GAMA Aviation each have a 24.5% shareholding of the enlarged entity, reflecting the near equal contribution of current profits by each party, and will get additional economic benefit from common branding agreements. The remaining 51% equity interest is owned by a small number of US individual shareholders including the key operational management.