Million Air chief executive officer Roger Woolsey. — AP
NEW YORK: Million Air, a luxury aviation company catering to the ultra-rich and high-flying executives, is borrowing US$120.5mil from Wall Street to expand its operations in Austin to meet pent-up demand for hangar space to park private jets.
Originally founded for the Mary Kay Inc cosmetics company, a wholly owned subsidiary of Million Air’s parent company plans to tap the municipal debt market or muni market in November.
Proceeds from the sale will be used to roughly double the size of Million Air’s facilities at the Austin-Bergstrom International Airport, which is among the top 25 busiest in the United States for business jet operations.
Some of the bond money will also go toward adding enhancements to the company’s facilities in Marathon, Florida. Raymond James is underwriting the unrated bond offering.
The muni market can offer certain companies a lower cost of borrowing compared with corporate bonds or direct lending.
The debt is being sold through the Public Finance Authority (PFA), a Wisconsin-based agency set up over a decade ago to issue municipal bonds for businesses and non-profits all over the country.
The PFA has a programme that allows private borrowers to sell muni debt for eligible projects like airports and docks.
Private-jet activity soared in 2021 and reached a peak in 2022 as flyers sought to avoid being exposed to Covid.
But private jet flight hours last year declined by 3.7% from a year earlier, though 2023 was still the second-busiest on record, according to PrivateJetCardComparisons.com, which tracks aviation analytics.“Any luxury used more than once becomes a necessity,” said Million Air chief executive officer Roger Woolsey, a pilot who used to fly celebrities.
The Austin expansion will include two new luxury departure lounges, three new hangars, an additional 535,000 sq ft of aircraft ramp space and more parking space with valet service.
The renovations are expected to boost earnings by 104% when the new facilities open in 2026 and reach about US$16.2mil by 2030 from US$4.7mil in 2023, according to bond-offering documents.
The Austin facility already includes a Texas ranch-style private terminal with a Starbucks.
To welcome travellers attending the Formula One race or the University of Texas at Austin’s football game against the University of Georgia recently, Million Air decked out its facilities with alternating race car and football paraphernalia including a US$2mil Bentley.
Servers handed out shots of Tennessee whiskey to passengers. Private jet operations accounted for 69% of Austin-Bergstrom’s air taxi and general-aviation operations in 2023, according to an investor presentation.
“We’re like the first impression of a city,” Woolsey said.
Million Air’s facilities provide private jets with fuelling, hangaring and aircraft servicing at general aviation airports.
The 40-year-old company was launched in 1984 by Mary Kay Ash of Mary Kay Cosmetic Co in Dallas to fly in customers and sales representatives.
The brand was acquired in 2002 and is now controlled by Woolsey.
The company is one of the largest fixed-base operator chains in the industry with 36 facilities across the United States, Canada and the Caribbean. — Bloomberg
