Changes in the air for AEXJet
ASPEN ” A company name change, personnel moves, an office relocation and a new parent company are on the horizon for Aspen Executive Air, a once struggling charter service that appears poised to emerge from Chapter 11 bankruptcy.
Better known as AEXJet, the upscale carrier sold all of its assets for “millions of dollars” to an Arkansas charter service on Jan. 8, said John Gallaher, now an executive vice president with the company that has taken over AEXJet. The buyout will be key to AEXJet’s exit from bankruptcy, Gallaher said.
“Essentially we have emerged from bankruptcy,” he said.”There’s still a shell of AEXJet that does exist in bankruptcy, and we’re trying to finish all of that.”
Gallaher’s new position as an executive vice president ” he had been CEO of AEXJet until just recently ” is among a bevy of changes that will alter AEXJet’s operations.
The company also plans to move its administrative offices from Basalt to Aspen-Pitkin County Airport within the next two months.
“The Basalt office is going to close and all of our presence will be at the airport,” Gallaher said.
And fairly soon, the AEXJet name will be dropped in favor of another, Gallaher said.
“It is unknown what our name will be at this point,” Gallaher said.
AEXJet currently is doing business with its original name, while Pinnacle Air LLC, the Arkansas carrier that bought the assets, operates it. Whatever the new company is called, one of its controlling shareholders will be John P. Calamos Sr., a managing member of Calim Private Equity LLC, which had helped finance AEXJet.
Calamos Sr. also gave AEXJet a $3.9 million bankruptcy loan, court papers show.
A portion of the estimated 40 employees who were with AEXJet when it sold its assets might not stay on board with the new arrangement, Gallaher said.
“A lot of employees were offered positions with the company and a few have chosen not to take them,” he said.
The latest developments with AEXJet come after it filed for bankruptcy protection in Delaware on Sept. 14. The charter airline was forced to reorganize its debt because of financing problems, delinquent tax debts to the IRS, and court-ordered judgments that it make good on leases on some of its planes.
The financial turmoil was hardly what the company had in mind when it announced in March 2003 that later that year it would be offering daily service between Aspen and Dallas and Los Angeles.
The carrier hoped to capture business from wealthy travelers who had grown tired of the hassles of flying commercial in the wake of the Sept. 11 terrorist attacks. AEXJet had marketed its services through a three-tier program with memberships ranging from $125,000 to $500,000. The programs function like a debit account, with fliers’ accounts charged each time they fly, based on an hourly rate and other fees. As part of the buyout, Pinnacle acquired all of AEXJet’s clients, Gallaher said.
Gallaher said he is now focused on the future and did not want to discuss what put AEXJet into bankruptcy.
But bankruptcy papers tell the story, more or less. Indeed, when AEXJet went bankruptcy it listed $6.5 million in assets and $64.6 million in debts.
Its future looked even more dim in November, when a U.S. bankruptcy trustee filed a court bid to convert the airline’s bankruptcy from Chapter 11 to Chapter 7, meaning it would have to sell of all of its assets instead of reorganize. Two weeks later, however, AEXJet won court approval allowing it to borrow $2 million. The loan helped keep AEXJet solvent and flying, albeit with a trimmed fleet of aircraft. Without that loan, AEXJet faced the prospect of folding.
And on Dec. 18, a bankruptcy judge rejected the bid to convert from Chapter 11 to Chapter 7, paving the way for AEXJet to begin settlement discussions with its creditors.
Gallaher said the alliance with Pinnacle will boost the fleet to 26 airplanes. At its peak, AEXJet operated with eight aircraft, but had to surrender a few when it couldn’t pay the firms that leased it the planes. Gallaher said AEXJet currently has a Gulfstream G200, a Cessna Citation X and a Raytheon Beechjet 400A.
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