Jet Tycoon amasses $1.5 billion fortune on spikes in air travel
A deal for up to 80 narrowbody jets came shortly after a prolonged strike at one of the US firm’s key factories.
When Boeing Co. was navigating one of its most challenging periods last year, a relatively unknown plane buyer provided the manufacturer with a much-needed shot of relief.
A deal for up to 80 narrowbody jets came shortly after a prolonged strike at one of the US firm’s key factories. And just months earlier, a mid-air panel blowout on an Alaska Airlines had reignited scrutiny of the firm’s manufacturing practices after fatal accidents.
Gediminas Ziemelis saw an opportunity. The Dubai-based entrepreneur had just spent more than a year convincing the manufacturer to work with his Ireland-based plane leasing outfit Avia, a minnow in the political cut-and-thrust of global aviation. Boeing, he says, preferred to deal directly with airlines.
“We hired Michael Pompeo partly to represent our interests, and we finally got attention,” from Boeing’s top management, said Ziemelis, referring to the former US Secretary of State. His firm’s order, he argued, one of the first after the strike, was a “very, very important deal” for Boeing.
Ziemelis, 48, has made a business of convincing others of the merits of so-called wet leasing, a risky aviation trade that involves hiring out planes to airlines, complete with pilots, cabin crew, and maintenance support. It’s proved a lucrative business: He’s built up a fortune of $1.5 billion, according to the Bloomberg Billionaires Index, which is valuing his net worth for the first time.
Boeing didn’t immediately respond to requests for comment.
One-Stop solution
Lithuania is profiting at a time when global airlines are caught between soaring demand for travel and securing enough planes to keep their routes up and running.
Ziemelis steps in to offer a one-stop shop solution during unexpected peaks in demand or when they face unplanned maintenance. He’s amassed an empire of 187 aircraft, leasing planes on a short-term basis to the likes of Germany’s Eurowings and Mexico’s Grupo Viva Aerobus SA.
He speaks of a punishing travel schedule from his base on Dubai’s Palm Jumeirah island as he criss-crosses the globe, pitching his business model to airlines. Wet leasing (named because it comes with operational components, not just ‘dry’ aircraft) typically incurs a higher cost than traditional ‘dry’ leasing, making it a harder sell to cost-conscious and budget airlines.
Ziemelis spends half of the year in the emirate, where his firm is building a 9,000-square-meter regional headquarters for Avia in Dubai South, a new regional air hub that the city is developing between Dubai and Abu Dhabi, which is a centrepiece of its development plans.
“This region is driven by aviation,” he said in an interview from the firm’s Dubai offices, a stone's throw from the glitzy Marina area. “So for me it’s a perfect location.”
His pitch hinges on the promise of speed and flexibility. Airlines facing delivery delays or struggling with staffing and maintenance often can’t wait months to bring new aircraft into service. Wet leasing, formally known as ACMI for Aircraft, Crew, Maintenance, and Insurance, offers an immediate — if pricey — stopgap.
Approximately 28% of airlines in emerging markets utilise wet lessors to avoid making capital-intensive fleet purchases, according to advisory firm IBA Group.
Other advantages of the model, he argues, include allowing carriers to shed excess capacity in off-peak seasons and avoid raising fares during peak periods to offset losses in slower months.
‘Global Shortage’
“In recent years, the ACMI sector has thrived due to the global shortage of new aircraft,” said Piotr Grobelny, an analyst at IBA. “What was once seen as mainly a stopgap for summer peaks has evolved into a year-round strategic necessity for many carriers.”
As a result, 2024 became a record year for ACMI usage, with over 920,000 block hours flown by providers, according to IBA.
The business also comes with risks, as evidenced during the pandemic when demand collapsed and Avia was forced to ground a large portion of its fleet. Since ACMI operators take on full operational responsibility, they are often left with elevated fixed costs and idle planes when demand drops.
If aircraft supply normalises and production ramps up, lease rates and demand for wet leasing could soften, according to IBA.
To help mitigate those challenges, the billionaire is seeking to set up operations on each continent, enabling his fleet to rotate among carriers and take advantage of different demand cycles. One example: holiday peaks in Europe and Asia typically occur in alternate seasons.
A law school graduate, Ziemelis has invested in areas ranging from agriculture to real estate. He began his career in aviation in the early 2000s, helping to privatise and restructure the state-owned airline in his home country of Lithuania.
Over the next two decades, he built an empire that spanned pilot training schools, maintenance hangars, and full-scale charter operators. There are more than 200 firms in the Avia group of companies, supported by about 14,000 aviation workers. By 2030, it plans to have 700 aircraft in its fleet.
The aviation group has been working with American partners for several years. In September 2021, US investment firms Certares Management and Knighthead Capital Management invested €300 million in Avia for a 20% stake.
The businessman, who attended President Donald Trump’s inauguration this year, is unequivocal about what’s been needed to get him this far.
“You just need to contribute your full life to business, get divorced, invest back all you’ve earned and be ready to borrow 10 times more,” he said.
