Jets and helicopters a winning combo for charter

May 17, 2012 (BANGKOK POST) - While its sole Gulfstream jet has been in the skies for barely a few months, an ambitious expansion is on the radar screen of Advance Aviation Jet Co (AA), Thailand's first premium helicopter and private jet chartering firm.

Tapping into positive market response and growth potential, Chai Nasylvanta, the founder and chief executive, is looking to acquire three more jets to consolidate its newly established private jet charter operation.

"One plane is simply not enough to run a good private jet chartering business. We need a four-jet fleet," said Mr Chai, the son of Privy Councillor Chaovana.

Ideally, AA wants to have three more Gulfstreams _ two G200 versions similar to its existing one and one G500 model _ over the next few years.

Mr Chai said AA, which has been running entirely on its own equity without any borrowing since it began in 2006, had sufficient capital to fund two more aircraft but may need external financing for the third. He did not say how much the expansion would cost.

However, the company paid US$9 million for its first G200, a mid-sized medium-range jet acquired late last year from Metrojet Ltd, one of Asia's largest private jet chartering firms based in Hong Kong and controlled by Sir Michael Kadoorie, the sixth-wealthiest person in the territory. That particular plane was then retained for Sir Michael's own use for seven years before it was delivered to AA.

If the company had bought a new G200, it would cost around $24 million.

However, Gulfstream Aerospace Corporation, a wholly owned subsidiary of US-based General Dynamics, stopped making the model last December with 250 produced. As a result, AA will have to look for used aircraft.

Mr Chai is upbeat about the prospects for private jet charter demand on the international level, where the bulk of AA's business will come from.

The G200 appeals very much to individual and corporate travellers for its large, luxurious cabin that can accommodate up to 10 passengers and its capability to fly non-stop from Bangkok to Dubai, about six hours.

AA charges a basic charter hourly rate of US$6,900 for the G200. That excludes extras such as ground handling and air navigation service fees.

AA is the third entrant in Thailand's executive jet charter business. The others are Siam Land Flying Co, which operates two Hawker jets, and Mjets, which has a Cessna Citation CJ3 and Citation X.

Mr Chai believes the jets will complement its helicopter charter service, something its rivals do not have.

The helicopters are for short-haul transport, especially to locations that lack airports or for special missions such as filming or surveillance, he explained.

AA has four Eurocopter helicopters, two twin-engine EC-135s and two single-engine EC-130s. It may acquire another helicopter _ an EC-130 that can carry six passengers _ especially to serve a potential long-term client, a planned high-end resort that is about a 20-minute helicopter ride from Koh Samui in the Gulf of Thailand.

But that depends very much on whether the resort development gets off the ground, according to Mr Chai.

In spite of the company's initial struggles, Mr Chai, who also has interests in insurance, said the helicopter charter business had turned out to be a worthwhile undertaking and has never been in the red since the company has no borrowing expense.

Part of its success was also due to its strategic plan to base the choppers in three locations _ Bangkok, Chiang Mai and Phuket _ where the business is.

AA bought the four helicopters, all brand new, over the years for a combined cost of about 500 million baht.

The launch of its jet charter business was hampered by the great flood in Thailand last year. AA took delivery of its G200 jet last November but was forced to park it at the Navy-operated U-tapao airport in Rayong until last month when the aircraft was able to start its mission.

He said the jet charter business should be able to break even in its second year.