Luxaviation - Consolidating Europe
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Luxaviation - Consolidating Europe
Hi All,
Luxaviation is quite active in acquiring shares in Europe`s leading Operators.
I wonder how they manage all that "growth". Any idea how they are doing right now? Do the acquired operators benefit?
Luxaviation is quite active in acquiring shares in Europe`s leading Operators.
I wonder how they manage all that "growth". Any idea how they are doing right now? Do the acquired operators benefit?
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Agree, what is their strategy? 
They buy a bunch of companies and if I understand it correctly pay over the top for them. The management stays there and they put new management on top of that... So you get an expensive company with too much management..
Is the idea just like the Vista jet dream to build this up quickly and sell it on before it blows up?
They buy a bunch of companies and if I understand it correctly pay over the top for them. The management stays there and they put new management on top of that... So you get an expensive company with too much management..
Is the idea just like the Vista jet dream to build this up quickly and sell it on before it blows up?
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Luxaviation Group acquires Masterjet
Masterjet is the latest to join the fold. Where's the cross-selling benefit between 8-9 AOC's in different EU countries??
Masterjet is the latest to join the fold. Where's the cross-selling benefit between 8-9 AOC's in different EU countries??
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This is an interesting concept. Gives potential clients the choice of various AOCs without the headache associated with setting up an AOC.
Also, they can save costs by consolidating shared functions.
Also, they can save costs by consolidating shared functions.
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Isnt this a contradiction?
vs
And with EASA allowing tailswapping the emotional reason to have a local tail is also fading away...
Gives potential clients the choice of various AOCs
save costs by consolidating shared functions.
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No doubt Lux are paying way over the odds to get control of target companies.
Very hard to fathom the reasoning. Yes economies of scale etc. but still leaving autonomous management and operation of each company in place. No centralisation of ops etc. which might have been an obvious saving.
In the process are issuing bonds right left and centre to raise huge amounts of debt.....thereby burdening not just themselves but everyone they have bought.
An IPO on the cards in less than a year ( floatation) which is unbelievable in the sense that their strategy will not have had a chance to mature and prove its effectiveness.
The guys behind this are money men creaming massive commissions on each aquisition and bond issue doubtless who are looking to put together a package of companies then sell as quickly as they can with the promise of riches to come.
I guess they will be long gone before the effectiveness or otherwise of their strategy is discovered.
with the chill winds blowing in europe this is a strategy involving massive risk to all who work in the target companies. They are the ones who will have to pay the debt that has been raised to buy them....and will do so with their jobs if it goes wrong.
Its one monumental gamble and with each purchase the stakes get higher IMHO.
Time alone will tell.
Very hard to fathom the reasoning. Yes economies of scale etc. but still leaving autonomous management and operation of each company in place. No centralisation of ops etc. which might have been an obvious saving.
In the process are issuing bonds right left and centre to raise huge amounts of debt.....thereby burdening not just themselves but everyone they have bought.
An IPO on the cards in less than a year ( floatation) which is unbelievable in the sense that their strategy will not have had a chance to mature and prove its effectiveness.
The guys behind this are money men creaming massive commissions on each aquisition and bond issue doubtless who are looking to put together a package of companies then sell as quickly as they can with the promise of riches to come.
I guess they will be long gone before the effectiveness or otherwise of their strategy is discovered.
with the chill winds blowing in europe this is a strategy involving massive risk to all who work in the target companies. They are the ones who will have to pay the debt that has been raised to buy them....and will do so with their jobs if it goes wrong.
Its one monumental gamble and with each purchase the stakes get higher IMHO.
Time alone will tell.
Last edited by Ghengis Cant; 19th Jan 2015 at 08:24.
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Luxaviation, assisted by Edison Structured Services SA, raised 10M EUR in May 2014 and 20M in December at the Luxembourg stock exchange:
https://www.bourse.lu/instrument/bon...&cdTypeVal=OBL
https://www.bourse.lu/instrument/bon...L&cdVal=217707
Interesting reading the two prospectus. They appear to be buying sound, established companies and have a business plan.
But why not mentioning Mr Hansen as the CEO of Luxaviation?
Edison Capital Partners - Biographies
Is Mr Bogachev still involved with Luxaviation?
https://www.bourse.lu/instrument/bon...&cdTypeVal=OBL
https://www.bourse.lu/instrument/bon...L&cdVal=217707
Interesting reading the two prospectus. They appear to be buying sound, established companies and have a business plan.
But why not mentioning Mr Hansen as the CEO of Luxaviation?
Edison Capital Partners - Biographies
Is Mr Bogachev still involved with Luxaviation?
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"Why not mentioning Mr Hansen as CEO of Luxaviation"?
Why indeed not?......might some people see a bit of a conflict of interest going on perhaps?
Could it be the uncomfortable truth that for Mr H its " heads I win" or "tails I dont loose"?
As partner or director of Edison Capital .....that company will have bagged a massive fee ...probably amounting to millions as commission for raising 30 million for Luxaviations purchase kitty and in accordance with sound banking principles there would be some massive bonuses paid to the introducing partner......
That will be a recurrent theme every time Lux goes to the market to raise some more dosh...These fees will pale into insignificance compared with the fees to be earned out of a stock market listing!
So from where I am standing it looks like Mr H is on a win, win, win....personaly......irrespective of whether the result of these purchases is success or failure for Luxaviation.
Its all about mega fees on raising mega bucks and where better than in an industry like ours where the numbers are eye watering before you even turn a wheel.
For sure there may be a sound business case to be made......maybe...( does not convince me but WTF do I know?!)....but if I am not very much mistaken someone is doing very nicely out of this already!
Why indeed not?......might some people see a bit of a conflict of interest going on perhaps?
Could it be the uncomfortable truth that for Mr H its " heads I win" or "tails I dont loose"?
As partner or director of Edison Capital .....that company will have bagged a massive fee ...probably amounting to millions as commission for raising 30 million for Luxaviations purchase kitty and in accordance with sound banking principles there would be some massive bonuses paid to the introducing partner......
That will be a recurrent theme every time Lux goes to the market to raise some more dosh...These fees will pale into insignificance compared with the fees to be earned out of a stock market listing!
So from where I am standing it looks like Mr H is on a win, win, win....personaly......irrespective of whether the result of these purchases is success or failure for Luxaviation.
Its all about mega fees on raising mega bucks and where better than in an industry like ours where the numbers are eye watering before you even turn a wheel.
For sure there may be a sound business case to be made......maybe...( does not convince me but WTF do I know?!)....but if I am not very much mistaken someone is doing very nicely out of this already!
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Interesting thread.
Theres definitely a bit of an aroma surrounding all this rush-to- buy. The big payouts to the lucky owners and the resultant new Range Rovers, Porsches and holiday homes appearing as a result have all got to be paid for.......and guess by whom?
The business justification seems to be "the story" to be told to potential clients about a worldwide operation,economies of scale plus bigger buying power to drive discounts on fuel, handling charges etc. That is all well and good but to retain all existing management and operational structures underneath a Luxembourg based bureaucracy ......all of which will have to be paid for doubtless by "management" charges levied on each individual company will be a massive burden....far outweighing any savings to be made out of discounts from bigger buying power.
Historicaly GA operations have good years and bad years. They are notoriously susceptible to economic downturns which appear like clockwork and during those downturns they loose money heavily. The established players some of whom have now been purchased have ridden these storms by shrinking down and controlling their debt in hard times. This debt burden is now out of their control.
These bonds representing this debt have relatively short dated maturities and they will have to be repaid with interest in full if the company is not to default. The combined business does not stand a cats chance in hell of generating profits to repay the tens if not hundreds of millions borrowed on such time scales...so Mr H is presumably hoping to have sold out or refinanced by the time the piper calls to be paid.....
Unfortunately pilots are not very business savvy when it comes to things like this but if I worked for a company that had been taken over by Lux I would be concerned to put it mildly and demanding some answers.......There is far far more to the story than is being officialy told......
I will be interested to revive this thread in three or four years and see who was right. I have a nasty feeling Ghengis might be correct.
Theres definitely a bit of an aroma surrounding all this rush-to- buy. The big payouts to the lucky owners and the resultant new Range Rovers, Porsches and holiday homes appearing as a result have all got to be paid for.......and guess by whom?
The business justification seems to be "the story" to be told to potential clients about a worldwide operation,economies of scale plus bigger buying power to drive discounts on fuel, handling charges etc. That is all well and good but to retain all existing management and operational structures underneath a Luxembourg based bureaucracy ......all of which will have to be paid for doubtless by "management" charges levied on each individual company will be a massive burden....far outweighing any savings to be made out of discounts from bigger buying power.
Historicaly GA operations have good years and bad years. They are notoriously susceptible to economic downturns which appear like clockwork and during those downturns they loose money heavily. The established players some of whom have now been purchased have ridden these storms by shrinking down and controlling their debt in hard times. This debt burden is now out of their control.
These bonds representing this debt have relatively short dated maturities and they will have to be repaid with interest in full if the company is not to default. The combined business does not stand a cats chance in hell of generating profits to repay the tens if not hundreds of millions borrowed on such time scales...so Mr H is presumably hoping to have sold out or refinanced by the time the piper calls to be paid.....
Unfortunately pilots are not very business savvy when it comes to things like this but if I worked for a company that had been taken over by Lux I would be concerned to put it mildly and demanding some answers.......There is far far more to the story than is being officialy told......
I will be interested to revive this thread in three or four years and see who was right. I have a nasty feeling Ghengis might be correct.
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On a previous thread it was said to be Ocean Sky all over again. Not sure it is the same as I dont recall that they used things like the bonds mentioned above... VERY interesting.. Boom to bust comes to my mind...
The story I recall (from Pprune so it must be true! 
) is that his name was disappeared as an owner when the shares he had were sold to a trust in the Bahama's or similar..
Is Mr Bogachev still involved with Luxaviation?
) is that his name was disappeared as an owner when the shares he had were sold to a trust in the Bahama's or similar..
Last edited by Global_Global; 21st Jan 2015 at 07:42.
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Luxaviation have raised 30 million eu last year and bought three companies Unijet, LEA and Masterjet. So it looks suspiciously like 10m per company.
The issued bonds carry a floating rate but appears to start at over six percent. Not cheap money!
So thats two million in interest a year just to buy the companies from their existing owners and before any value is added!!!! Plus of course there is all the overhead of Luxembourg to now carry.
That is two million in profit .....not turnover each year that they will be expecting at the very least to get back from those companies to service the cost of what has been borrowed to buy them!!!!!
Absolutely no way is this possible....none of those companies have ever made anything like that sort of net revenue.
So far as making any capital repayments...let alone by bond maturity dates..not a chance.
(Well I suppose they could always issue some more bonds to buy some more companies and use a bit of that to cover it........but all that is happening is an ever increasing debt mountain....)
So what on earth is going on?
Wake up guys!!!!
The issued bonds carry a floating rate but appears to start at over six percent. Not cheap money!
So thats two million in interest a year just to buy the companies from their existing owners and before any value is added!!!! Plus of course there is all the overhead of Luxembourg to now carry.
That is two million in profit .....not turnover each year that they will be expecting at the very least to get back from those companies to service the cost of what has been borrowed to buy them!!!!!
Absolutely no way is this possible....none of those companies have ever made anything like that sort of net revenue.
So far as making any capital repayments...let alone by bond maturity dates..not a chance.
(Well I suppose they could always issue some more bonds to buy some more companies and use a bit of that to cover it........but all that is happening is an ever increasing debt mountain....)
So what on earth is going on?
Wake up guys!!!!
Last edited by Sheikh Zabik; 23rd Jan 2015 at 10:11.
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Someone in business aviation for 40+ years has once told me:
what grows very, very fast collapses after a while with the same speed.
For now, after 25 years in the same field I got to say, this saying has proven correct time after time.
Maybe Luxaviation proves it wrong, after all corporate taxes seems to be very low in LUX (Amazon, Skype anyone ?) and with that 'likeable' chap Junker at the helm of the EU, maybe they will succeed ?
We`ll see....
what grows very, very fast collapses after a while with the same speed.
For now, after 25 years in the same field I got to say, this saying has proven correct time after time.
Maybe Luxaviation proves it wrong, after all corporate taxes seems to be very low in LUX (Amazon, Skype anyone ?) and with that 'likeable' chap Junker at the helm of the EU, maybe they will succeed ?
We`ll see....
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Interesting to observe that since Luxaviation took over LEA their fleet has shrunk and some of their most experienced crew ( flight deck and cabin) have voluntarily left.
How does that reflect on any Lux plan to take over the GA world?
How does that reflect on any Lux plan to take over the GA world?
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Last edited by Deep and fast; 4th Feb 2015 at 14:28.
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Here's a working link to deepandfast's article
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Wow 500 aircraft by simply buying companies that most likely make no money. 
Is a bit like the 100 aircraft craze that all these new start up air taxi companies were shouting about 10 years ago.
I am getting to old for this stuff... Congratulations to the shareholders selling their companies to LUX: finally some people making money in Business Aviation
Is a bit like the 100 aircraft craze that all these new start up air taxi companies were shouting about 10 years ago.
I am getting to old for this stuff... Congratulations to the shareholders selling their companies to LUX: finally some people making money in Business Aviation
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Nicely put Global.
Reading the hot air blooo hah about rivaling net jets is palpable bollux£s. Net jets are a cohesive world wide operation with centralised administration, marketing, training,crewing and ops.
Every time Lux buys another company it is doubling up again on overheads.....as it leaves all existing management structures, training, crewing and operations exactly as they were.
from anecdotal and direct comment from the guys and gals in LEA Lux head office is not remotely interested in getting involved at a local level, preferring to leave it to the existing organisation. You even have the ludicrous situation where lux companies are competing with each other for business!!!
For sure the lucky shareholders who sold out are laughing all the way to their bank..........but there is a dark side to all this as alluded to earlier.
Reading the hot air blooo hah about rivaling net jets is palpable bollux£s. Net jets are a cohesive world wide operation with centralised administration, marketing, training,crewing and ops.
Every time Lux buys another company it is doubling up again on overheads.....as it leaves all existing management structures, training, crewing and operations exactly as they were.
from anecdotal and direct comment from the guys and gals in LEA Lux head office is not remotely interested in getting involved at a local level, preferring to leave it to the existing organisation. You even have the ludicrous situation where lux companies are competing with each other for business!!!
For sure the lucky shareholders who sold out are laughing all the way to their bank..........but there is a dark side to all this as alluded to earlier.
