College, Pro Teams Face Turbulence as Charter Carriers Merge

(Bloomberg) -- For two years, professional and college sports teams have struggled to cope with a growing shortage of charter planes, making it more difficult and costly to ferry athletes around the country. Now a big carrier in the industry is getting bought.

IAero Group agreed on Wednesday to purchase Swift Air, a leader in the charter business, for an undisclosed sum. It’s the latest consolidation in the world of charter flights, where capacity was already constrained by prior deals and commercial carriers backing away from the business.

The company, which was formed this year, plans to expand Swift Air with additional aircraft, according to President David Doerr. That could alleviate some of the troubles confronting sports teams that spend millions a year flying teams to away games. Swift Air already bills itself as the largest independent airline charter operator, with a fleet of 27 Boeing 737s.

“We think there’s growth potential in the marketplace,” Doerr said in an interview. “There’s a relatively small number of commercial charter businesses out there, and there’s been a bit of consolidation of that area.”

Last week, Boston College canceled a men’s basketball game at Texas A&M because of problems with its charter flight to College Station. The game was scheduled to be televised by ESPN’s SEC Network, and Texas A&M had to refund tickets. The high-profile incident underscored the depth of the challenges facing travel coordinators across the country.

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A major college athletic department might spend more than $1 million a year to fly just its football team to and from games, with charters costing between $20,000 to $30,000 per flight hour.

“There is no doubt our member institutions have experienced a growing number of challenges with respect to team air travel,” said Tom McMillen, chief executive officer of the Lead1 Association, which represents athletic directors in college football’s top tier. “The sharp reduction in airlines flying in the charter market has caused upward pressures on pricing.”

The concerns in the sports world reached a critical point last year, when carriers including JetBlue Airways Corp. and United Continental Holdings Inc. cut or threatened to drop the number of teams they serve. American Airlines Group Inc. last year stopped providing service to several National Football League teams and colleges across the country faced the prospect of busing players to games.

For its part, Phoenix-based Swift has also been a player in consolidation, acquiring Miami-based Eastern Airlines in June 2017. Eastern had focused its business on service to Cuba and on sports charters, including the NHL’s Florida Panthers.

Swift’s business also includes vacation charters, entertainment productions and federal government contracts. Greg Raiff, chief executive officer of aviation consultant Private Jet Services, said the deal may mean higher prices and more scheduling woes for sports teams.

“I am concerned about the lack of inventory and competition,” said Raiff, whose clients include a number of National Hockey League teams and about three dozen top-tier college athletic departments, including the University of Maryland. “It wouldn’t surprise me if a large platform like IAero intends to further consolidate the marketplace.”

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