Private-Jet Boom Drives Hangar Builder Sky Harbour to Muni Market for $100M Expansion

Sky Harbour Group Corp. is raising $100 million in municipal bonds to expand its network of private aircraft hangars in response to growing demand in the private jet market. The firm is tapping into the municipal bond market to fund infrastructure projects in Texas, Connecticut, Florida, and New York according to Bloomberg.

The company's expansion aligns with forecasts showing a 3% annual growth in global business jet deliveries through 2034, according to a Honeywell industry forecast. Sky Harbour plans to use the funds to build larger hangars to accommodate the increasing size of private aircraft and the current shortage of suitable storage space.

The muni bond offering, set to price later this month, is backed by rental revenue and the company's operations. The securities are intended for investors willing to take on a high degree of risk, with minimum denominations of $500,000.

Why Did Sky Harbour Choose the Muni Market?

Municipal bonds are traditionally used for infrastructure and public services, such as roads and public transit. However, the tax-exempt nature of muni bonds makes them an attractive financing option for industrial and commercial development, including aviation infrastructure.

Sky Harbour's move leverages the economic benefits of new construction, including job creation and increased local tax revenue. For instance, Daniel Solender, head of municipal securities at Lord, Abbett & Co., noted that such projects bring jobs and potential growth to local areas.

The firm's 2021 bonds, issued through the Wisconsin Public Finance Authority, have not seen much trading activity, indicating a niche market. The 2021 bonds, which mature in 2054, traded at an average yield of 5.5%, 140 basis points above top-rated muni debt.

How Did Markets React to the Announcement?

Sky Harbour's financial performance has shown mixed results. Q3 2025 revenue was $7.3 million, a 78% year-over-year increase, but the stock dipped 0.1% in after-market trading following the announcement. Investors remain cautious despite the company's ambitious expansion plans and a growing cash position of $48 million.

Analysts have generally been optimistic about the stock. Several firms, including BTIG, Lake Street Capital Markets, and Noble Capital, have issued 'Buy' ratings, with price targets ranging from $13 to $23. This reflects confidence in the firm's ability to capitalize on the growing private jet market.

What Are Analysts Watching Next?

The success of Sky Harbour's expansion will depend on several factors. First, the ability to secure and complete projects on schedule is critical, given the projected completion timelines for major projects like the $63 million facility in Salt Lake City and the $44 million facility in Hartford, Connecticut.

Second, the firm's financial projections must align with expectations. Sky Harbour anticipates that its cash flow will exceed the necessary funds to pay principal and interest in some years, but the offering documents warn that investors should exercise caution.

Lastly, broader market conditions will play a role. Sky Harbour plans to expand to 23 airports by the end of 2025, but success will depend on continued demand for private aviation infrastructure. Francisco Gonzalez, Sky Harbour's CFO, emphasized the need for infrastructure to match the increasing size and number of private jets.

The firm's strategic approach, leveraging limited-competition airport locations and focusing on metropolitan areas, is expected to drive long-term growth. CEO Tal Keinan stated that the airport system is akin to Manhattan—its limited supply means new airports cannot be built easily.

The expansion also aligns with broader technological and demographic shifts in the private aviation market. For example, companies like Virtual Hangar are introducing AI-powered valuation tools to increase transparency and efficiency in the sector. These innovations are reshaping how aircraft are valued and traded, potentially affecting demand for infrastructure like Sky Harbour's hangars.

Despite the risks, the firm's unique position in the market and the growing demand for private jet infrastructure make this muni bond offering a significant development in the aviation and municipal debt sectors.