$450m management buy-out for XL Leisure

A management buy-out team has agreed to acquire the XL Leisure Group from investment group owner Avion in a $450 million deal.

The agreement for the Excel Airways Group parent in the UK plus aviation interests in France, Germany, the US and Austalia, is conditional on Civil Aviation Authority approval in the UK.

XL Leisure Group’s annualised projected turnover is expected to be approximately $2 billion, through passenger numbers of about five million.

Avion is expected to make a profit of $107 million on the sale.

The management buy-out team was led by Philip Wyatt, CEO of XL Leisure Group, Magnus Stephensen, deputy CEO XL Leisure Group, Michael Stoney, COO of tour operating and Geoff Medhurst, group managing director of tour operating.  

XL Leisure Group consists of Excel Airways Group in the UK, Star Airlines in France and Star Europe in Germany, operating across three continents and flying to over 100 destinations. XL Leisure Group also holds a stake in Xtra Airways in the US and a 5% share in Advent Air, which is the parent company of Skywest Airlines in Australia.  

Excel Airways Group is divided into three operational divisions: airline, aviation and tour operating, employing 1,600 staff. Its tour operating arm is the fifth largest in the UK represented by Travel City Direct, Kosmar Holidays, Freedom Flights, Aspire Holidays, XL Holidays and XL.Com.

Charter carrier Excel Airways provides services to more than 50 destinations in Europe, the Middle East, Asia and North America from 12 airports in the UK.

For next summer XL Leisure Group plans to fly over 40 aircraft comprising eight Airbus and Boeing aircraft at Star Airlines, five Airbus aircraft at Star Europe, approximately 30 Boeing aircraft for Excel Airways Group and four Boeing aircraft in operation at Xtra Airways.

Wyatt said: “We are delighted to have agreed the purchase of XL Leisure Group from Avion. 

“XL Leisure Group’s portfolio of European businesses and worldwide destinations has become one of the most significant within the market place. 

“The management team have worked together over many years to achieve that status and we look forward to expanding our vision for the future of XL Leisure Group.”

Avion has also disposed of a 51% stake in Avion Aircraft Trading to a buy-out team for $51 million. The business has purchased 24 Boeing and Airbus aircraft in the past 15 months and specialises in the trading of aircraft.

Avion group chairman Magnus Thorsteinsson said: “Avion is an investment group focussed on transport solutions. As part of our strategy, we are constantly looking for investment opportunities. Similarly, if we are able to realise excellent returns for our shareholders, we will divest our interests.

“These two deals represent a substantial return, whilst retaining an ongoing interest in Avion Aircraft Trading which generates a good contribution to group profits.” 

Report by Phil Davies