In a deal that could be a preview for the red-hot helicopter leasing market, GE Capital Aviation Services (Gecas, Booth 2631) announced October 13 that it plans to acquire helicopter leasing firm Milestone Aviation Group for $1.775 billion. The deal is expected to close next year.
Gecas, the U.S. and Irish commercial aircraft financing and leasing business of GE Capital, has a fleet of approximately 1,600 owned and serviced aircraft with more than 230 airlines. Gecas also provides spare engine leasing, aviation consulting services and spare parts financing and management.
Since launching in August 2010, Milestone has acquired a fleet of 168 helicopters worth $2.8 billion and supports 31 operators in 25 countries on six continents. The company has a forward order book of 131 firm and option aircraft with an estimated aggregate purchase price of $3 billion. The helicopters in Milestone’s fleet are primarily used in offshore oil and gas, search and rescue, emergency medical services and mining.
Milestone’s management team, including founder and chairman Richard Santulli, will remain in place. Santulli will become an officer of GE and join its board. Considered the founder of fractional-share ownership, he started NetJets in 1986, sold it to Warren Buffett’s Berkshire Hathaway in 1998 and left NetJets in 2009. Milestone will continue to operate as the Milestone Aviation Group. Santulli said the company would “continue to operate as we always have.”
Following its founding, Milestone quickly drew competition. The helicopter leasing space has been increasingly crowded in recent years, as the deepwater offshore oil market has taken off. Many of the helicopters ordered for, or already serving, the offshore energy market–including the Sikorsky S-92, the AgustaWestland AW189 and the Bell 525–are fitted with GE Aviation engines.
Over the last few years Milestone has been joined in the market by new entrants including Waypoint Leasing, LCI Aviation, Lobo Leasing and Macquarie Rotorcraft Leasing. Milestone was backed with capital financing from financial powerhouses including Lloyds, Barclays and Lombard, the asset finance division of the Royal Bank of Scotland.
Milestone has tied up a substantial amount of production from the big three OEMs–Airbus, AgustaWestland and Sikorsky–currently serving the offshore energy market. Within its $3 billion order portfolio, Milestone holds orders and options for 37 Sikorsky S-92s worth a potential $1.2 billion, 30 Airbus EC225s and 44 twin-engine helicopters from AgustaWestland.