Santulli Back in Bizjet Business
Richard Santulli announced today the launch of a new business jet and helicopter leasing company, Milestone Aviation Group, headquartered in Dublin, Ireland. Santulli in the mid-1980s founded fractional share company NetJets, which was sold in 1998 to Warren Buffett’s Berkshire Hathaway. Santulli left that company last year. He is now chairman of Milestone. Before launching NetJets, Santulli was in charge of equipment leasing for Goldman Sachs Leasing and founded helicopter leasing company RTS Helicopters. William Kelly, former CEO of NetJets Europe, is Milestone’s CEO.
Milestone is starting with $500 million of equity capital provided by The Jordan Company,a private equity firm. It is leading the investment team and partner Nautic Partners. Milestone will purchase aircraft selected by customers then lease the aircraft to the customer. The lease covers new, pre-owned and sale-leaseback transactions, and customers are responsible for all operating costs for the leased aircraft.
According to Santulli, Milestone has already signed up one firm customer and is working on deals worth about $110 million in Brazil, Canada and Nigeria. He expects about 80 percent of Milestone’s business to be helicopter related, with the rest business jets. Milestone will lease only turbine-powered aircraft, and helicopters will be available solely for customers that use them for revenue-producing purposes, such as oil and gas work, aeromedical operations and private and government search-and-rescue activities. The customers that Milestone will partner with must have excellent operational and maintenance records, he said, but their balance sheets might be stretched to the point where it’s difficult to obtain traditional financing, making it hard to bid on contracts.
Business jet buyers will be able to obtain short-term leases through Milestone. “We’re not competing with Bank of America,” Santulli said, “which does a spectacular job. We’ll tend to be a creative player in the airplane space.” Milestone will offer lease periods as short as one to three years and limit customers to about a dozen jet types. No deals involving fractional shares will be considered, however.
Santulli said that he decided to return to the aviation business because, in consulting with Kelly and other team members, he saw that there wasn’t much competition in the helicopter and business jet leasing arena. “We felt that we had the ability to service that market very well,” he said. “I believe we will build a successful company and provide help to companies that otherwise would not be able to bid on these contracts.” Both Santulli and Kelly have an equity stake in Milestone Aviation. Berkshire Hathaway is not financially involved in Milestone.