Million Air, a luxury aviation company, is set to borrow $120.5 million from Wall Street to expand its operations in Austin, Texas. This move aims to address the growing demand for hangar space for private jets, reflecting a significant trend in the aviation industry.
Key Takeaways
- Million Air is borrowing $120.5 million to expand its facilities at Austin-Bergstrom International Airport.
- The expansion will include new hangars, luxury lounges, and additional ramp space.
- The municipal bond market offers lower borrowing costs compared to corporate bonds.
- The expansion is expected to boost earnings significantly by 2030.
Overview of Million Air’s Expansion
Originally founded to serve Mary Kay Inc., Million Air is tapping into the municipal debt market to fund its expansion. The company plans to double the size of its facilities at Austin-Bergstrom International Airport, which ranks among the top 25 busiest airports in the U.S. for business jet operations.
The funds raised will not only enhance the Austin location but will also contribute to improvements at Million Air’s facilities in Marathon, Florida. The Public Finance Authority (PFA), a Wisconsin-based agency, is facilitating the bond sale, which is designed to support eligible projects like airports and docks.
The Rise of Private Jet Travel
The demand for private jet travel surged during the COVID-19 pandemic, with many travelers seeking to avoid crowded commercial flights. Although private jet flight hours saw a slight decline in 2022, the industry remains robust, with 2023 being the second-busiest year on record.
Roger Woolsey, CEO of Million Air, noted, "Any luxury used more than once becomes a necessity," highlighting the ongoing appeal of private aviation.
Planned Enhancements at Austin-Bergstrom
The expansion at Austin-Bergstrom will feature:
- Two New Luxury Departure Lounges: Designed to provide a premium experience for travelers.
- Three New Hangars: To accommodate more private jets.
- 535,000 Square Feet of Additional Ramp Space: Enhancing operational capacity.
- Valet Parking Services: Offering convenience for passengers.
These renovations are projected to increase Million Air’s earnings by 104% by 2030, with expected revenues rising from $4.7 million in 2023 to approximately $16.2 million.
Million Air’s Unique Offerings
The Austin facility already boasts a Texas ranch-style private terminal, complete with a Starbucks. To enhance the travel experience, Million Air has decorated its facilities with themes related to local events, such as the Formula One race and University of Texas football games.
The company provides comprehensive services for private jets, including fueling, hangaring, and aircraft servicing, making it a key player in the general aviation sector.
Conclusion
As Million Air embarks on this significant expansion, it underscores the growing trend of private aviation and the increasing demand for luxury travel options. With strategic investments in infrastructure and services, Million Air is poised to enhance its market position and cater to the needs of high-flying executives and affluent travelers alike.