The Three Year Tsunami

It was in the fall of 2007 when the worst case of prosecutorial excess struck the general aviation industry.  But it was the week of June 7, 2010 that the final nail may have been driven into the coffin of one of the most bizarre and saddest stories in general aviation history.

In 2007 TAG Aviation, USA/AMIJC had become the largest, safest, and probably the most highly respected aircraft management/charter company in the United States if not the world. Aviation Methods, Inc. was founded by Roger McMullin, Duncan Higgins and Jim Markel some thirty plus years ago.  Jake Cartwright, who later would become CEO of TAG Aviation, USA was an early partner of McMullin and company.  In 1998 the company was sold to TAG Aviation, a Swiss company controlled by the Ojjeh brothers, who had been early clients of AMI. Therein lay the rub.  The Ojjeh’s were Swiss citizens.  An archaic U.S. law forbids foreign nationals from owning a controlling interest in a U.S. air carrier.

TAG Aviation USA was a division of TAG Aviation, a global company that today operates the London Farnborough Airport and is actively engaged in aircraft management in Europe and Asia.  For almost ten years TAG Aviation, USA operated under an arrangement whereby AMI, which was majority owned and controlled by U.S. citizens, was the air carrier/charter operator for US-based TAG-managed clients seeking Part 135 charter.  The FAA was fully aware of this arrangement and frequently audited the company’s operations, as did the DOT, which conducted their own audit in 2004. In 2007 an aggressive lawyer at the FAA, decided the arrangement was not legal, and despite TAG’s perfect safety and operations record, revoked their air carrier certificate, and assessed the company a $10 million fine, the largest FAA fine in history.

What was left of TAG Aviation, USA’s assets were sold in early 2008 to JetDirect Aviation, a charter/management roll-up which operated under the Sentient Jet card banner and was directed by Sentient executives. This new amalgamation could not handle the influx of more than 100 business jets to their operations, and sold the Sentient charter division in an attempt to salvage the management business under the JetDirect brand. But it was to no avail, as JetDirect declared bankruptcy in early 2009, stiffing employees, customers, and vendors.  A third resurrection, under the name of Wayfarer Aviation, was attempted by Robert Pinkas of Brantley Partners.  Wayfarer was the name of another highly regarded aircraft management company started by the Rockefeller family.  (The original White Plains-based Wayfarer Aviation had been acquired by TAG in 1999.)  This effort, too, failed, and Brantley investors removed Pinkas from any management of Wayfarer.  

Most recently Arcadia Aviation, a relatively new company, has signed a binding letter of intent to acquire “certain assets”, which can only mean the “10 or more” Part 135 air carrier certificate of Wayfarer.  Arcadia acquired two very small FBOs at, Martinsburg, VA, and Monticello, NY.  Monticello is in the Catskill Mountains near the site of the infamous Woodstock Festival held during the summer of love.  Neither of these are centers of business jet activity.  But Wayfarer’s customers could use some love.  We will have to wait and see if this deal closes.  Is this the end of the story?  Stay tuned.

For more on this disaster see General Aviation Tsunami and The Debacle Story Continues.