Priester Aviation (PWA, Chicago Executive) is on the lookout for potential acquisitions of more family-owned aircraft management and charter companies, its chairman Andy Priester told ch-aviation in an exclusive interview during the NBAA-BACE conference in Las Vegas. The company emphasises strong relationships with its customers and prioritises this factor in its growth strategy.

"I believe there are other family-owned companies out there in strategic places where their principals want to exit. Sometimes, those principals look at private equity as not really appetising for them because they don't feel it's going to take care of the customers the same way they have. But Priester Aviation, being an 80-year-old company, having what I believe is a reputation of high-quality, high-integrity operations, offers a comfortable partner in that acquisition process for them because they recognise we're going to preserve what they thought was valuable - the relationships they had with their customers - because that's what we find valuable," he explained.

The acquisition drive began in 2022 with the takeover of Mayo Aviation, followed by the 2023 acquisition of Hill Private Aviation. The three companies retain their individual brands and Priester explained that this will be the strategy going forward. He called both of the recently acquired firms "legacy companies that have developed incredible relationships in their regions." The strength of the brand and deep relationships with local customers are valuable enough to keep the two brands. Any future acquisitions will be driven by the same logic.

While the customer-facing brands remain separate, Priester Aviation is consolidating administration to increase the efficiency of the group.

Besides focusing on family-owned businesses, it is also driven by the geographical and "cultural" fit of any potential acquisition targets. With the main company based out of Chicago Executive, Mayo Aviation out of Denver Centennial, and Hill Private Aviation out of Atlanta Fulton County, the brands are focused on the Midwest, Southwest, and Southeast, respectively. Priester Aviation is looking to add brands covering the Dallas metro and Texas, and possibly the Minneapolis region.

"We think that our companies in those particular regions are culturally aligned. There are other places in the country that we don't necessarily think we're culturally aligned to, that we probably don't have any appetite to go to. Right now we have no real interest, and we're not chasing any opportunities on either coast," Priester outlined.

Customer strategy

All three brands under the Priester Aviation umbrella provide Part 91 aircraft management and Part 135 charter services. Priester described the firm as a "corporate aircraft management company that also charters" and explained that around half of the group's aircraft are currently available for charter, with the remainder operated only privately.

"Of the 85 airplanes, roughly 45-50 of them are on charter, and the rest of them are Part 91-only," he said, adding that the group would prefer to keep the roughly 50/50 ratio of pure Part 91 and Part 135 fleet.

While Priester Aviation is the world's largest family-owned aircraft management and charter company, it has no plans to grow more than its current business model can support. Priester underlined that the main aspect of the firm's strategy is its focus on developing deep relationships with its owners and supporting "their vision for the airplane".

"We have all the robust infrastructure and capabilities of any other major international player, and we have a much more different, personalised approach that really focuses on the relationship at the most senior level," he said.

He distinguished the group's customers in two main categories. The first consists of pure Part 91 owners, while the second is the "150/150" owners, who use their aircraft for around 150 hours a year for their own needs and want to charter it for another 150 hours. Priester Aviation wants to avoid too heavy a reliance on charter hours, as it would render both the operator and the owner too financially dependent on the inevitable fluctuations in the market.

"When we start hearing from owners, 'Can you fly my airplane 400-500 hours [on charter]?' - the answer is yes, we probably can. But my question is, why do you need 400-500 hours of charter? And invariably that answer is that they want the revenue to offset the operational cost of the airplane. Our philosophy is that when you decide to own an airplane, you have to make that decision independently of financial contributions from charter, because there are going to be months that the airplane doesn't fly. And if you're not prepared to afford the airplane without the charter, you probably shouldn't own the airplane only because of charter," Priester explained.

Fleet approach

Priester Aviation does not have a strategic preference for any OEM or size segment - its goal is to support its customers with whatever aircraft type they have. It prefers newer aircraft but is not opposed to accepting older airframes under management as long as the owner is aware of the implications for operations.

The company does not own any jet aircraft. Priester explained that this would create a bias towards more charters. It owns three King Air B200s (through the Mayo Aviation certificate) which are leased to the Flight for Life network for air ambulance and medevac flights.

As Priester Aviation remains committed to its personalised service and deep relationships with customers, it will limit its future growth to a maximum of 120-150 aircraft, less than double its current fleet. Priester believes that beyond this size, the company would no longer be able to have equally close relationships with aircraft owners.

The current Part 135 fleet of Priester Aviation comprises 19 aircraft across all size categories (including one turboprop PC-12), while Mayo Aviation's is eight aircraft, including the three King Air B200/B200GTs operated for Flight for Life. Hill Private Aviation does not have any aircraft on its Part 135 certificate currently. Priester said that on top of the 85 aircraft in the group's total fleet, a further 12 are currently being onboarded.

Maintenance and supply-chain issues

Priester Aviation strategically does not own any Part 145 maintenance facilities. It acquired an MRO shop together with Mayo Aviation but subsequently sold it to Stevens Aerospace in July. Priester explained that this allowed the company to maintain independence and offer its customers the best options.

"We want to make sure we are aligned with the owner. It's our job to make sure that the companies that support the owner and their airplane have the appropriate oversight and quality control. So if we were the people delivering the maintenance and the people that were in charge of delivering the overseeing the quality control, we think there's a conflict of interest," he said.

Given the lack of in-house maintenance facilities, Priester Aviation has less control over delays common due to the current supply chain issues. Priester said that as the operator could do little to expedite maintenance, "creating the appropriate expectations for the owners and then managing the process with the repair facility" became crucial. He added that while the situation appeared to be improving in 2023, the last few months have again seen a resurgence and supply chain and labour market constraints.