With aircraft owners facing continuing headaches over importing aircraft into the European Union, offshore registrations are increasingly being considered as a more flexible option. At the same time, lawyers have been scrambling to develop elegant solutions to avoid at least immediate liability for punitive rates of value added tax through deferral schemes.
More than 100 business aircraft, with a nominal overall value of more than $1 billion, are currently covered under the FinServe European Business Aviation Placement (F-EBAP) “privileged” insurance program sold by independent broker FinServe Aviation Insurance (Stand 383), which is celebrating its 25th anniversary.
With financing for business aircraft still far from easy to secure, ExecuJet Aviation has stepped up its efforts to help get more people airborne through its SimplyFly Finance program. The plan is to offer fast-access, simplified nonrecourse financing in the shape of five-year loans or leases for up to 70 percent of the value of an aircraft worth at least $20 million and no more than five years old. An initial fund of $400 million provided by ExecuJet’s main shareholder Dermot Desmond is available to support the program.
The European Business Aviation Association (EBAA) is tackling the headaches facing those trying to secure funding for new and preowned aircraft with the recent formation of a finance and leasing working group to report to its associate members advisory committee (AMAC). The group will be chaired by Aoife O’Sullivan, a partner with London-based aviation law firm Gates and Partners.
Hawker Beechcraft announced at 3:30 p.m. EST today that it has reached an agreement with a “significant number” of its senior secured lenders and senior bondholders on the terms of a financial restructuring plan that will “strengthen the company for the future and eliminate approximately $2.5 billion in debt and approximately $125 million of annual cash interest expense.” To move this process forward, the Wichita-based OEM and certain of its subsidiaries today filed voluntary petitions under the Chapter 11 bankruptcy code.
Italy’s parliament passed proposed changes to the aircraft luxury tax today, according to NBAA.
The International Monetary Fund’s April 18 warning that Europe’s banks could lose some $2.6 trillion over the next 18 months lent weight to concerns of a continuing aircraft finance drought recently voiced by airline treasurers and finance bosses.
NBAA staff members met with officials at the Italian embassy in Washington last week to explain the negative effect that a recently enacted business aircraft tax could have on commerce between Italy and the U.S. The new tax, which imposes a levy on all civil aircraft that spend more than 48 hours on the ground in Italy, could total more than $393,630 annually for aircraft weighing more than 22,046 pounds, NBAA said.
Aviation insurer Starr Aviation now has an iPhone app that provides easily accessible information to aviation insurance brokers, Starr policyholders and potential policyholders. Functions include locating and contacting the various Starr offices, finding a local aviation insurance agent and consulting an accident checklist. Additionally, Starr Aviation allows both policyholders and their broker to access their aviation policies directly from mobile devices. Policyholders can also report an accident and file a claim within the application.
Hawker Beechcraft yesterday secured more time to solve its debt problems through a restructuring plan, with lenders granting a 90-day forbearance agreement. The move staves off the immediate threat of a filing for Chapter 11 bankruptcy protection–a move that has been widely expected by industry analysts.
The manufacturer, which is owned by Onex and GS Partners (a division of investment banking giant Goldman Sachs), announced it had “reached an agreement with certain lenders that will provide the company with approximately $120 million of additional liquidity.”