After a year of reinforcing its capitalization, business aviation financier Global Jet Capital (GJC) is encouraged by the “long runway” of demand it sees ahead as the pandemic starts to fade and markets begin to reopen, said recently appointed CEO Vivek Kaushal.
Previously COO, he stepped into the post formerly held by Shawn Vick, who is now executive chairman. Kaushal, who joined GJC in 2015 with its acquisition of GE Capital’s business aircraft portfolio, takes the new leadership post as the firm prepares for business to take off once again. “We believe that there is a ton of pent-up demand," he said. "We see a lot of growth ahead of us."
GJC (Booth 733, SD A507) was founded in 2014 by a group of seasoned senior business aviation executives and expanded substantially with the acquisition of the GE portfolio. In 2019, before the pandemic hit, it enjoyed one of its strongest years with a business jet portfolio of more than $2.6 billion. Also that year, the company widened its international reach with the addition of full offices in Zurich and Hong Kong that joined existing facilities in Danbury, Connecticut; Boca Raton, Florida; and Mexico City. That enabled GJC to put its executives in key time zones and the regions where its clients were based, Kaushal said.
All of this prepared the company for when the pandemic hit. Like many businesses, GJC responded first to Covid by taking care of its people and having them set up home offices. Then it focused on clients; Kaushal noted that “we told them we’d be there for every single delivery. And we were.”
As the pandemic slowed new business for the market, it also tempered GJC’s growth. Its portfolio is still near where it was in 2019 but Kaushal estimates that had Covid not hit, the company would have been on pace for another 10 to 20 percent of growth.
However, despite the turmoil in the market, GJC saw little delinquency in its customer base and no defaults, he said. Working in partnership with customers has been a “tremendous experience and tremendous differentiator,” Kaushal said, adding that "people really appreciated how our portfolio performed.”
GJC closed on an asset-backed securitization (ABS) in November 2020 that raised approximately $522 million, bringing its securitized assets to more than $2.8 billion and bonds issued to more than $2.3 billion. GJC followed that with another ABS offering that raised about $663 million, bringing its total assets securitized to more than $3.6 billion and bonds issued to more than $2.9 billion.
“We were the very first aviation securitization to come back to the market [since the onset of the pandemic], and we reopened the market for aviation related-assets,” Kaushal said, noting that in both issuances the bonds GJC brought to market were oversubscribed.
Investors began to see the value of business aviation through the pandemic, including its efficiency, safety, and security, he added. In addition, they saw the strength of the GJC client base. “They have the ability to withstand very difficult times and it’s been proven in spades,” he said.
Moving forward, Kaushal added, “I really believe the pandemic is going to be part of everyone’s playbook,” and that will benefit business aviation. The industry is already seeing strong demand although some countries are just beginning to open up and others have yet to reopen. “The trends are accelerating in this marketplace,” he said, noting that GJC has readied for it with the teams it has put in place and the financial backing it has lined up.
Kaushal noted that large-scale business aviation providers are seeing growth but “they are going to need capital to grow and we’re going to be there.”
Furthermore, new additions to the market are also turning to lease options that provide them with more flexibility without the long-term commitment or worries about long-term asset valuations that may come with ownership, he said.
“Our business is to provide access to business aviation,” he said, pointing to what he sees as a large opportunity for GJC. “This is a $30 billion-a-year transaction market.”
Kaushal also believes that this is not a temporary bubble, saying, “We are in a very rational market.” The OEMs are measured in their response to demand, he added. And while values have gone up, only a few sales have involved “eye catching” numbers. Most are reasonable, he said, and are marking a correction made from years of softening.
Returning to NBAA, GJC is looking forward to reconnecting with the marketplace in a live show. “We want to reinforce our commitment to business aviation and show our confidence in the industry,” he said, adding, “We have the capital and a full stack of products.”