NBAA Convention News

AirFleet Capital Looks To Extend Reach Beyond U.S.

 - October 16, 2019, 12:00 PM
Steve Smestad, AirFleet Capital president

About 25 years ago, Steve Smestad was reflecting on his career and what he wanted to do in the future. The corporate world, he decided, wasn’t for him. At the same time, he wanted to buy an airplane and to be able to justify the purchase for tax purposes.

It was the genesis of AirFleet Capital (Booth C10498), a general aviation aircraft financing company that since its founding in 1994 has financed more than 7,000 aircraft purchases totaling $3.4 billion.  

“I wanted to get into a business in areas that I loved, which was aviation and financing; and have an aircraft that I could write off,” Smestad, AirFleet Capital president, told AIN. “Those [were] the motivators.”

A licensed pilot with an instrument rating, Smestad grew up as the son of a pilot. His summers in Montana consisted of weekend trips in his father’s airplane to different lakes around the state. “Those were my summers growing up, so obviously I had a deep love affair with aviation,” he explained. 

Before starting AirFleet, Smestad worked for a couple of manufacturers to the regional airline industry. “When you’re talking about that kind of equipment, the passion goes out of aviation” Smestad added. “And so when I was deciding what to do before I started AirFleet, I realized I wanted to be in aviation, but it was general aviation I liked the most. I had a great time doing the commercial side, but after several years, there’s not the passion that you have in general aviation.”

AirFleet underwrites and closes new and used aircraft purchases and sources the capital, mostly from banks. In some cases, he said, AirFleet will service the loans. It focuses primarily on financing fixed-wing airplane types between single-engine pistons and light jets up to the size of a Cessna Citation CJ4; as well as light rotorcraft for the owner-flown market. “The vast majority of our customers are sitting in the left seat,” Smestad said. “We’re 100 percent devoted to this sector.” The company has 15 employees and operates offices near the East and West Coasts.

It emerged from the 2008 financial crisis as one of “just a handful left” of general aviation finance companies, and “over the last several years [business has] gotten stronger,” he added. In 2018, AirFleet was second in the market in the number of turboprops and light jets financed. “That’s not something we necessarily actively pursue,” Smestad said. “We certainly like it, and we certainly want to do it.”

Currently, the market for financing aircraft purchases is strong. Rates are as low as they’ve ever been, he said, and lenders are hungry. “We’re looking for a stronger second half [of 2019] than the first half,” he said, “because we do see it building.”

AirFleet also is looking to extend its business beyond the U.S. Smestad said he hopes to be able to serve customers in Canada within the year, followed by Europe.