International aviation holding Avia Solutions Group has recently acquired 100% of shareholdings of Chapman Freeborn, a British aircraft charter firm. Signed last month, the acquisition agreement is expected to bring huge rewards for both companies. Just what does each stand to gain, though? And what does that mean for the air travel industry?
To find out, let’s explore the business venture in more depth.
How do both businesses work?
They may belong to the air industry, both businesses work in markedly different ways. While Chapman Freeborn is a cargo charter agency – offering flights for goods by hire – Avia Solutions Group controls shares in leading aviation firms.
For almost 50 years, the former has guaranteed safe and prompt air travel for freight of all kinds, from equipment to humanitarian aid.
The holdings group, on the other hand, has shares in companies across the world, and has taken on 42 subsidiaries since it first began nine years ago.
Why is the agreement taking place?
It’s easy to see why Avia Solutions Group is keen on this agreement. It is, after all, a holdings firm; its main premise is to acquire shares in other businesses.
And of course, it’s likely to enjoy the sector expansion that the agreement allows, as Chapman Freeborn are leaders in air cargo transportation.
But what are the reasons for the charter company entering into it? Chief executive Russi Batliwala emphasises that it’s Avia’s global reach that he and his team are most interested in. The air industry is a global one – so it makes sense to stretch global outreach as far as possible.
He says: “Joining forces with Avia Solutions Group will provide us with a greater level of business scale, resources and expertise to accelerate growth and deliver our services to an even wider client base…”
So, for Chapman Freeborn, the agreement offers the opportunity for wider global outreach while also, in Batliwala’s words, holding onto its “unique company culture and ongoing commitment to charter market innovation.”
How will it benefit each company?
So, how could each company benefit from the agreement?
Regarding cost, both stand to reap huge financial rewards – the predicted revenue of the new partnership for this year alone is €1 billion. Its projected growth is largely down to the current success of the two companies; their combined revenue for 2018 amounts to €800 million.
Aside from a rise in revenue, the partnership offers various other rewards. Chapman Freeborn will be able to grow its audience on a global scale, working with other Avia subsidiaries specialising in other fields of air cargo transport to further enhance its services.
Likewise, the agreement enables Avia to expand its presence in key aviation sectors, in turn helping the group to transform the air cargo industry as a whole. This is an exciting time for not just air freight transport – but the entire aviation industry.