READY FOR TAKEOFF?
London Air Services’ owners put company up for sale.
Richmond-based private jet charter firm London Air Services is up for sale as the Louie family wants to get out of the executive travel business, company president Wynne Powell confirmed Monday.
“There has been a change of direction with the Louie family, where they want to cash out certain things, and they have asked me to liquidate the airline,” he said in an interview.
But Powell stressed the company remains profitable and noted several “parties of substance” have already expressed an interest in buying the entire operation.
The H.Y. Louie Group, which also owns London Drugs, Sonora Resort and IGA and Fresh St. Market stores in B.C., launched LAS in 1999. Its current assets include two Challenger 605 jets, five Learjet 75 aircraft and three AW139 helicopters, along with airport hangars and parking lots.
Powell said the helicopters will be kept and used for the Louie family’s Sonora Resort operation. LAS employs 40 people, including 26 pilots, who were told last week of the decision to sell the business.
“Right now, it’s business as usual and we’re still going to be aggressively running our business as I source potential buyers,” Powell said.
“But this is not a trivial transaction and if it doesn’t happen in one or two years, we’ll still keep running it.”
He said his “No. 1 mission” is to project jobs at the company.
His No. 2 mission is to protect the Louie family’s net worth.
The family might fetch $160 million or more from a sale of all LAS assets and Powell said the younger generation of the family wants to inject new ideas into future business investments.
“The fourth generation is involved now and they want to drive the group to bigger and better things,” he said. “They’d rather take that money and invest it in a different way.”
Powell said LAS has made a profit in most of its 16 years of operation, but it has become increasingly difficult to do so.
“It’s a very entrepreneurial business and it takes a very entrepreneurial soul to make money (by acquiring, selling and operating aircraft),” he said, noting it is harder to sell used aircraft now.
Powell said aircraft used to sell for 75 per cent of their original value after five to seven years of operation, but now those same planes get only about 55 per cent of their value after flying for that period of time. “That makes it tougher to do the kinds of deals you want to do when it’s time to renew your aircraft,” he said.
Powell, who retired from his position as London Drugs president last year, said the Louie family recently asked him to commit to working another 10 years at LAS on a part-time basis, but at age 68, he chose to turn down the offer.
He feels the executive jet business still has a strong future because of the time savings it offers corporate travellers.
“There was a downturn for a sustained period of time in the U.S., but that downturn has certainly diminished and things are on the way up,” he said.
Kevin O’Leary, president of Massachusetts-based privatejet acquisition brokerage firm Jet Advisors, said the industry still hasn’t fully bounced back from the 2009 recession.
“Consumers might have the money again, but they’re not as willing to part with it,” he said. “Some of the indicators look OK and we are getting things done, but it’s not like it used to be. It’s like pulling teeth to get things done.”
“Right now, it’s business as usual and we’re still going to be aggressively running our business as I source potential buyers.
WYNNE POWELL LONDON AIR SERVICES PRESIDENT