Opinion: First Milestone in business jet and helicopter leasing
When Richard Santulli launched his NetJets fractional ownership scheme it did not take long for others to follow. It will be the same with Milestone Aviation his new helicopter and business jet lessor.
In the last 12 months private equity companies have invested more than $4.2 billion into commercial aircraft leasing companies. The $500 million that Jordan Company and Nautic Partners have invested in Milestone is the only private equity firmly allocated to helicopter and private jet leasing.
Private equity firms like the cyclical, asset-based, buy-low-sell-high trade that aircraft offer. Whilst the business aviation market is smaller in dollar terms there are many, many, more investment opportunities with corporate jets or helicopters than there are in commercial aircraft, where it is not unusual for more than 20 leasing companies to bid for a single deal.
While Milestone was the first dedicated helicopter and business jet lessor to launch there are others out there. Airfinance Leasing, targeting business jet operators, had committed equity but wants debt to generate higher returns (Milestone is planning to borrow later). Chinese leasing companies are also going to dominate their home market and will start financing helicopters very soon. Until now corporate aviation has had just two specialist leasing companies – GE Corporate Aircraft and CIT- this is changing quickly.
Milestone met with over 30 private equity firms and sovereign wealth funds when it was raising cash and had several offers. One of these may back the next start-up.
Santulli has changed the business jet market again.