Helicopter leasing company Milestone Aviation Group signaled its intention to offer stock to the public–an initial public offering (IPO)–yesterday in a filing with the U.S. Securities and Exchange Commission. No date for the IPO has been set, nor has any valuation been placed on shares to be offered. Milestone was founded by former NetJets CEO and founder Richard Santulli in 2010 with an initial capitalization of $500 million. The company’s current fleet is valued at $2.2 billion and it has more than 145 helicopters on order worth $3.4 billion.
Financing, Insurance and Taxes
Issues regarding financing of aircraft; aviation insurance; tax issues for aircraft operators; new companies and people in the aviation financing and insurance industries.
According to NBAA, IRS officials recently indicated the agency plans to intensify audits of companies for improperly classifying employees as independent contractors, which could include contract pilots frequently used by corporate flight departments. The independent contractor issue is so concerning and complicated that NBAA issued a Best Practices for Utilizing Independent Contractors guide for business aircraft operators in 2011.
The Isle of Man Aircraft Registry, launched with modest expectations by the island’s government in May 2007, is seeing no letting up in activity as business aircraft owners seize on the advantages of using the M-register. Various factors are driving the registry’s popularity, including banks’ advising owners to distance themselves from Russia; VAT rules; impending ratification by the UK of the Cape Town Convention; intensified scrutiny of U.S.
AgustaWestland, a division of Finmeccanica (Outdoor Exhibit 1), congratulated Waypoint Leasing here at the Farnborough Airshow 2014 on the rotor leasing firm’s first year of operation, which kicked off in March 2013 with an order for GrandNew, AW169, AW139 and AW189s from the OEM.
Ilyushin Finance Co. (IFC), Russia’s largest aircraft lessor, says it has lined up various prospective customers to discuss deals for Bombardier CSeries and Sukhoi Superjet aircraft. “We come here to see our airline customers in the first place. Meetings at the show have been arranged with twelve carriers interested in the CSeries and five ones considering the Superjet,” said IFC general manager Alexander Roubtsov. “Besides, we will host a number of events devoted to the Q series and the MC-21. Talking to banks is also important.
Aircraft financing company AirFleet Capital, which is marking its 20th year in business, closed its 5,000th aircraft loan last month. AirFleet Capital has focused solely on the general aviation marketplace, transacting an average of 250 loans per year for customers purchasing aircraft, from warbirds to turbine business aircraft. The company also noted “that an increase in retail demand is well matched with bank appetites that continue to rebound.”
As the softness of the aviation insurance market continues to drive premiums down, aviation insurance underwriters, brokers and agents are struggling to make money. In fact, when asked how much lower premiums could fall before they hit bottom, Aviation Insurance Association (AIA) president Franklin Bass told AIN, “I thought we were there last year.”
NBAA and more than 150 other associations and coalitions sent a letter last week to the U.S. Senate urging swift passage of a bill to restore tax incentives that expired last year, including accelerated depreciation on purchases of long-term capital assets such as business aircraft.
The U.S. Export-Import Bank (Ex-Im) announced a new goal today, pledging $2 billion in financing for U.S.-manufactured business airplanes and helicopters by year-end. It reached a previously announced goal of $1 billion in financing for these exports in December, 10 months ahead of schedule.
Nextant Aerospace launched a financing plan that targets aircraft costing between $2 million and $10 million, a market it says has been underserved by banks in recent years. The company is offering a range of flexible financing packages for customers pursuing the Nextant 400XTi light jet and G90XT twin turboprop. Terms are available from two to 20 years, and a variety of lease types are available. Fixed or floating rates are offered, with fully amortizing or balloon payments.
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