superFLY Invests in Saudi Aviation
superFLY has purchased an internal aviation charter business of a Saudi Arabian Family office established in the 1970’s in a private deal. The family corporation headquartered in Al Khobar, the eastern province of Saudi Arabia, started life as a simple trading business, selling food and textiles in neighbouring Bahrain. Over the decades it has grown into a regional player, benefiting, like other Saudi companies, from the oil boom and subsequent leap in government spending and during this time has used its charter business to organise flights for a very large number of family members and key executives including annual trips to Mecca.
The private Saudi aviation business had close ties to legendary aviation entrepreneur Carl Hirschmann Sr of Jet Aviation Corporation after Hirschmann expanded his company into Saudi Arabia in 1979. One of the most notable deals with Hirschmann was the Sultan of Brunei’s purchase of his first Boeing 727 which Jet Aviation had also secured the position of managing the Royal Flights.
When the Sultan complained that the 727 had to make two refuelling stops to reach London Hirschmann sold the Sultan on the idea of the 747 – SP. The $100 Million deal soured however when Mohamed Al Fayed (later of Harrods notoriety) secured a Power of Attorney from the Sultan and scuppered the deal.
Messy litigation followed and virtually all parties involved except Al Fayed, around fifty people and organisations including sub-contractors working on the 747, all lost out financially.
Carl Hirshman passed away in 1995 and Jet Aviation was eventually sold to the American Arms and aviation giant General Dynamics for almost $2.2 Billion in 2008.
GULF FAMILY OFFICES SHIFTING CAPITAL TO FAMILY BUSINESSES
The family office has invested heavily in its own fleet in recent years which is under management and which has negated the need to charter other aircraft. A Middle East Management Study by investment company Invesco has shown that Ultra-high net worth (UHNW) individuals and family offices in the Gulf Cooperation Council are diverting capital into their own holdings. Based on interviews with more than 100 UHNW individuals and family offices based in the United Arab Emirates, Saudi Arabia, Qatar, Bahrain, Kuwait and Oman, a survey said 40% of family offices were moving capital towards their own family businesses.
“For a company involved in private aviation charter this was a unique opportunity to purchase an exclusive Middle-Eastern contact database and who’s who book which can be used to establish a strong foothold in the region when superFLY's Dubai office is opened in 2018.” said Sam Farshian of Xerxes Capital. "The Private aviation market in Iran is also where we will be investing in. We already have great Iranian partners lining up."
Xerxes owns a stake in superFLY aviation which is headquartered in London and has offices in Monaco, Spain and the USA. superFLY Aviation is involved in private jet charter, developing aviation technology and various other aviation investments.
The 32-year-old crown prince, Mohammed bin Salman, has recently proposed sweeping reforms aimed at diversifying the economy away from oil and opening up Saudi society.
This week, he welcomed more than 3,500 international investors, bankers and corporate chieftains at a luxurious conference in Riyadh to entice them to invest in the kingdom.
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