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Bills sink private jet service

Aspen-based firm files bankruptcy

Chris Walsh, Rocky Mountain News

Published September 18, 2007 at midnight

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An Aspen-based company that provides jet services for business executives and wealthy individuals has filed for bankruptcy protection.

Aspen Executive Air, which does business as Aexjet, listed the value of its debt and assets at less than $100 million, according to documents the company filed Sept. 14 with U.S. Bankruptcy Court in Wilmington, Del. Specific figures were not included.

Officials said the filing allows Aexjet to continue day-to-day operations and renegotiate lease agreements as it prepares to merge with a similar company.

John Gallaher, Aexjet's president and chief executive officer, stressed that the move likely won't affect customers.

The company's problems are the result "of a number of things that, when put together, challenged our ability to be successful from a financial perspective," Gallaher said.

Aexjet, which grosses tens of millions in annual revenue, is cementing plans to merge with another private air charter company. Gallaher declined to provide a name, but hopes to finalize the deal in the next two weeks.

Aexjet's top 25 unsecured creditors are owed an estimated $32.4 million. The largest, Minnesota-based JTL Aircraft Holding Company, has a $19.8 million claim related to aircraft leases.

Aexjet sells memberships that let customers fly on smaller, private jets, allowing them to avoid commercial air travel without actually having to own a plane. Its fleet of five planes includes a seven-seat Bombardier Lear 35A and a nine-seat Gulfstream 200. The company focuses on flying between Aspen and nine cities, including Los Angeles, New York, Chicago and Dallas, though it also will fly to other member-requested destinations. Memberships range from $125,000 to $500,000.

Aexjet, founded in 2000, also handles maintenance and other operations for private-jet owners.

The company's struggles won't have a big effect on Aspen's airport, local officials say.

"We're one of the most popular private-jet destinations in Colorado, but it still represents less than 2 percent of total skiers we have each year," said Bill Tomcich, president of Stay Aspen Snowmass.

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