Apollo is putting nearly $10 billion behind a bet on the infrastructure that keeps America’s private aviation industry moving.
The investment firm has acquired a significant stake in Atlantic Aviation, one of the largest fixed-base operator networks in the United States. KKR, which has owned the company since 2021, will remain a substantial shareholder following the transaction.
The deal values Atlantic Aviation at nearly $10 billion and gives the company two major investment firms backing its next stage of expansion.
For the aviation industry, the transaction is notable for another reason. It puts a large valuation on the infrastructure sitting behind private and business aviation — the fuel facilities, hangars, airport concessions and ground services that aircraft operators depend on but that passengers rarely see.
Why Atlantic Aviation is attracting investors
Atlantic Aviation operates FBO facilities at airports across the United States, serving corporate and general aviation customers.
Its services include aircraft fueling, hangar leasing and other essential support. The company also benefits from long-term airport concession agreements and a broad presence at high-activity airfields.
That footprint is a central part of Apollo’s investment case.
David Cohen, a partner at Apollo, said Atlantic has developed an “irreplicable infrastructure footprint” across some of the nation’s busiest airports. He also pointed to its long-term concessions and a customer base that puts a high value on reliability and service.
Those factors can make an FBO business difficult to replicate. Securing a presence at a strategically important airport is not simply a matter of opening a new facility. Access to airport property, concession arrangements and the capital required to build and maintain facilities can create meaningful barriers for competitors.
Apollo sees that position as an opportunity to participate in what it believes will be continued structural growth in private aviation.
The firm plans to work with Atlantic Aviation CEO Jeff Foland, the management team and KKR on investments aimed at expanding the business and entering additional markets.
KKR is staying in for the next phase
KKR’s role in Atlantic Aviation is not ending with Apollo’s arrival.
The investment firm acquired Atlantic Aviation in 2021 and has spent the past five years helping expand the company through acquisitions and organic growth. Its funds will continue to hold a substantial interest after the new transaction.
KKR Partner Dash Lane said Atlantic represents the type of scaled, essential infrastructure platform the firm looks for in its portfolio.
The company has expanded its network in the United States and certain international markets during KKR’s ownership. At the same time, it has invested in customer offerings and operational capabilities.
Safety has also been a focus.
KKR supported significant investments in employee health and safety, with Atlantic Aviation saying those efforts have helped it establish one of the strongest safety records in the industry.
That combination of expansion and operational investment has helped shape the company that Apollo is now buying into.
The infrastructure behind private aviation
The FBO business is easy to overlook when discussing private aviation.
Aircraft, charter companies and private jet demand usually dominate the headlines. But every flight still requires a place to land, fuel, park and, in many cases, undergo servicing or other ground operations.
That is where companies such as Atlantic Aviation come in.
An FBO can effectively serve as the private aviation gateway at an airport. Its customers can include business aircraft operators, corporate flight departments and general aviation users.
Location matters enormously.
An FBO with a presence at a busy airport can have an advantage that is difficult for a new competitor to reproduce. Long-term concession agreements can further strengthen that position by providing access to airport facilities for extended periods.
For investors looking for infrastructure businesses with established physical assets and recurring demand, those characteristics can be particularly attractive.
That helps explain why Apollo and KKR are treating Atlantic Aviation as more than an aviation services company. They are investing in an established infrastructure platform with room to grow.
Apollo’s infrastructure push
The Atlantic Aviation transaction also fits into Apollo’s wider strategy.
The firm said it has originated more than $155 billion in infrastructure transactions and financings over the past five years across sectors including transportation, energy, digital infrastructure and industrials.
Infrastructure has become an increasingly important part of Apollo’s business as investors look for assets tied to essential services and long-term demand.
Atlantic Aviation fits that model neatly.
The company owns and operates infrastructure that customers need to use regardless of whether they are flying for business, corporate travel or general aviation purposes. Its airport footprint adds another layer of scarcity because suitable locations are not unlimited.
Apollo said its infrastructure group is focused on deploying flexible, large-scale capital into essential infrastructure assets.
Atlantic Aviation gives the firm an established platform in a specialized part of the transportation market.
KKR brings deep aviation experience
KKR also has a substantial history in aviation investment.
The firm said its infrastructure business manages more than $120 billion in assets globally and has been investing in infrastructure for nearly two decades. Since 2015, KKR has invested more than $12 billion across the aviation sector.
That experience will remain relevant as Atlantic Aviation moves forward with Apollo as a new major investor.
Rather than handing the company to a new owner, KKR is effectively bringing another large investor into the business while continuing to participate in its future.
For Atlantic Aviation, that could mean access to additional capital and investment expertise without losing the institutional knowledge built during KKR’s ownership.
Atlantic Aviation sees more room to grow
For CEO Jeff Foland, the transaction represents recognition of what Atlantic Aviation’s employees and management team have built.
Foland described the investment from Apollo and the continued backing from KKR as a strong endorsement of the company’s performance and future potential.
The company now has an opportunity to build on the progress made since 2021.
That could include expanding into additional markets, making further acquisitions and investing in existing facilities. The strategy will likely depend on finding airports where Atlantic can strengthen its network while maintaining the service levels that have helped define its business.
Apollo’s Cohen said the firm expects the structural growth trends supporting private aviation to persist.
That outlook will be important to Atlantic Aviation’s next chapter. Private aviation is not a uniform market, and demand can vary significantly by region, airport and customer type. A diversified network gives the company the ability to participate across multiple markets rather than relying on a single location or customer segment.
A nearly $10 billion bet on aviation infrastructure
The valuation attached to Atlantic Aviation may ultimately be the most revealing part of the transaction.
A nearly $10 billion price tag signals how much value investors can place on the infrastructure supporting private aviation when it combines scale, strategic airport locations and long-term concession rights.
The transaction also shows where some of the investment opportunity in aviation lies beyond airlines and aircraft manufacturers.
As Apollo joins KKR behind Atlantic Aviation, the focus will now turn to what the company does with that backing.
If the two firms can continue expanding the FBO network, add attractive locations and improve the services offered to aviation customers, Atlantic could emerge from the transaction as an even larger player in the private aviation infrastructure market.
For now, the message from Apollo and KKR is clear: they see Atlantic Aviation as an infrastructure asset with considerably more room to run.
And at a valuation approaching $10 billion, they are making a substantial bet that the demand for the infrastructure behind private aviation will keep growing.
Foe more on Apollo, see: Apollo’s easyJet Takeover: What It Means for easyJet
Leave a Reply