San Francisco-based on-demand operator XOJet has today announced $2.4 billion of fresh investment and has unveiled ambitious plans to launch operations from Abu Dhabi later this year.
“No one’s ever raised this kind of capital in this industry,” says chief executive Paul Touw. “Of course, no one’s ever had a model like ours.” In September the first of 80 Challenger 300s joins the fleet, and soon the company will select a long-range aircraft – the third and final model for the fleet.
The fourth round of XOJet’s financing revealed at EBACE is from the Economic Development Corporation of Canada, White Oak Investments, and TPG Growth.
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| Paul Touw: "We are taking delivery of 107 aircraft over the next five years" |
Morgan Stanley led the effort that brought $964 million in immediate financing. The remaining $1.5bn is via a joint venture with Tasameem Real Estate Company, which is awaiting United Arab Emirates approval of a new air operator’s certificate. “That will take between three and six months so we’ll begin operations towards the end of 2008,” says Touw.
Interested parties there want range, he adds. “We’re looking at aircraft in the 4,000-5,000nm range. Dubai to London, for example, or Dubai to Singapore. Now we have an enormous purse to begin our ultra-long range cabin programme. Our plan is to have no more than three types of aircraft. Our large cabin may actually be the Citation Columbus or another aircraft type that gives you about 4,000nm.”
In the US XOJet will have two aircraft types, says Touw: “One we call our super-midsize fast cabin (Cessna Citation X) and the second is our super midsize large cabin (Bombardier Challenger 300). The Challengers actually begin delivering in September. We will have 23 by the end of 2009.”
The total value of XOJet’s aircraft and aircraft orders is $3.1bn. “We are taking delivery of 107 aircraft over the next five years and this will finance aircraft currently on order,” Touw adds.
Under XOJet’s business model, a trip from Los Angeles to New York costs $25,000 one-way, with only the customer’s party taking all eight seats of the Citation X. “If you fill the plane, we’re beginning to compete with a first class airline ticket,” says Touw.
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Source: Flight Daily News
