I read that they just got a 2.5B expansion investment. Sounds like a good place to be right now.
Firm Will Enlarge
Private-Jet Fleet,
Open Overseas Hub
By PETER LATTMAN
May 19, 2008; Page C3
XOJet Inc., a fast-growing private-aviation company backed by buyout firm TPG, is expected to announce Monday it has secured $2.5 billion in new financing to expand its jet fleet. It also plans to launch an international expansion in partnership with Tasameem, the real-estate arm of the Abu Dhabi Investment Authority.
A sliver of the money -- approximately $85 million -- is an equity investment from TPG, Tasameem and XOJet management, with the rest made up of loans to purchase aircraft.
With tight credit markets restricting the aircraft-financing market, the large loan package is a coup for XOJet, one of dozens of private-jet start-ups attempting to grab a share of the burgeoning $32 billion private-aviation market. Many rivals have struggled, largely because of an inability to secure financing.
XOJet will receive about $900 million in financing immediately. About $400 million will come from Canada's export credit agency, Export Development Canada, to fund the purchase of Challenger jets manufactured by Bombardier Inc. An additional roughly $500 million will come from Abu Dhabi, while an additional $1.5 billion in loans will come later this year from Middle East investors after XOJet establishes a base in Abu Dhabi to launch international operations.
"We believe we can be a major player in one of the most fragmented industries you'll ever see," said William McGlashan, managing director of a TPG unit called TPG Growth and a director at XOJet. "This will give us the capital to be able to scale to a very substantial level."
XOJet, which has orders and options for 127 aircraft, targets the high-volume business traveler who flies 100 or more hours per year. Through the increased utilization rates of its airplanes, it says its service costs some 20% to 40% less than those offered by its competitors.
The company, which was started in 2006, still has a long way to go to catch Berkshire Hathaway Inc.'s NetJets, the largest player in the private-aviation industry. XOJet flies about 1,000 flights per month, according to its chief executive, Paul Touw. By comparison, NetJets, which manages some 750 aircraft, flies some 1,000 flights per day.
TPG, which is backing the company through its venture-capital vehicle TPG Growth, first came across XOJet as a customer. The firm ended up backing the company last year with $143 million in equity and debt financing. Mr. McGlashan and TPG co-founder David Bonderman have joined XOJet's board.