If you represent a bank, you may find yourself in one of several possible scenarios:
If you already own an aircraft portfolio, your key priorities likely include the following:
- To know precisely the value of each aircraft serial number held in your portfolio at a given point in time.
- To get a good understanding of the future asset value in its context, i.e. market condition, economy, competitors, etc.
- To protect the value of each aircraft listed in your portfolio.
- To implement a strategy to reduce the risks attached to:
- Operation of the aircraft
- Maintenance of the aircraft
- The lessee, client and/or operator
- The aircraft’s country of operation and registration
- Each specific mission role in which the aircraft is contracted
Aside from the above, you may also be looking to sell either part of your portfolio or its entirety. Alternatively, you may
be seeking to acquire or finance additional aircraft/helicopter or to purchase new aircraft/helicopter portfolios.
Uplifting Aviation can re-market aircraft under the most challenging circumstances
To demonstrate Uplifting Aviation’s unique capabilities in managing, designing, engineering and executing aircraft/helicopter
transactions, I would like to talk you through a special mission we completed for and on behalf of SpareBank 1 and QBE
Insurance. For further context on this project, you can refer to our Investors page.
Context and background
On 29 April 2016, the 2008 Airbus H225 - serial number 2721, registered LN-OJF operated by CHC Helicopter - crashed while making a return flight to Bergen-Flesland Airport, Norway, from the Statoil Gullfaks Boffshore rig. On that day, 13 people on board tragically lost their lives. The cause of the crash was attributed to a failure in one of the gears within the helicopter’s main transmission, in turn causing the main rotor assembly to separate from the mast and the helicopter. For those unfamiliar with helicopter technology, losing one or more main rotor blades is roughly equivalent to losing the wing of an airplane mid-flight.
The whole industry was devastated. The pain endured by family, friends and their acquaintances, at the loss of the 13 individuals in this flight, is simply unfathomable.
Following the LN-OJF tragedy, the Norwegian and UK civil aviation authorities, acting in coordination with EASA (European Aviation Safety Agency), grounded the H225 and AS332L2 fleet. At the time of the accident, there were 170 x H225 and 45 x AS332L2 civil helicopters in operation worldwide. The H225 and AS332L2 models are amongst the largest twin turbine-powered helicopters. In 2016, the manufacture price for a new H225 in an oil and gas configuration averaged US$26 million, while a new AS332L2 cost nearly US$20 million, depending on the specific mission equipment installed.
To make matters much worse, this came right in the middle of the 2016 oil crisis, leading to the bankruptcy of CHC Helicopter, the world’s largest commercial helicopter operator. CHC had significant exposure, having substantial operations within the oil and gas industry and being owners and lessees of 38 x H225 helicopters.
But the damage didn’t stop at CHC. Indeed, every helicopter Lessor, bank, commercial operator and government agency that
owned, financed or leased the H225 or AS332L2 was impacted.
When helicopters are grounded, they still need to be maintained to the highest OEM standards or otherwise preserved in compliance with stringent short- or long-term storage protocols. After going through the Chapter 11 process, CHC returned its fleet of leased and financed helicopters to their respective Lessors and banks in poor condition, namely:
- Without any maintenance reserves
- In unairworthy condition
- With major components missing
- With inaccurate or out-of-date maintenance records
Uplifting Aviation’s Role
In June 2017, Uplifting Aviation was appointed by SpareBank1 and QBE to return to service and then sell the bank’s 2008 Airbus H225 - serial number 2716, registered LN-OJE. Our mission was to be executed within a maximum of six months.
It is essential to note that, at this point:
- There was absolutely no demand whatsoever for the H225 anywhere around the world. In fact, there were no buyers willing to commit to investing in the model;
- There were more than 100 x H225 and AS332L2 helicopters available on the market;
- Airbus Helicopters put extensive safety checks and reviews in place requiring each H225 and/or AS332L2 to undergo special audit by the manufacturer’s engineering team prior to granting their release back to service;
- All helicopter Lessors had abandoned the funding of H225 and AS332L2; and
- Aircraft valuation specialists were refusing to produce valuations for either of these two helicopter models.
The situation was extreme and the task at hand was epic. We joined a fabulous team in charge of the project. As helicopter specialists, Uplifting Aviation was brought in to provide oversight for the project, as well as to facilitate negotiations with Airbus Helicopters and liaison between all teams involved. Additionally, we were contracted to engineer a specialised solution to return the helicopter in accordance with the lease return condition and then to find a buyer.
To turn this catastrophe into a success, we needed to rely on Airbus Helicopters, whose directors and engineering team provided remarkable support for the project from start to finish.
Specific challenges involved in the return to service of LN-OJE included the differences between the terms of the lease agreement, the protocols in place by the OEM, the grounding of the H225 and AS332L2 by both UK and Norwegian CAA for all commercial flights, as well as the massive efforts in coordinating, negotiating, synchronising and executing all the moving parts of this project, including:
- Recovery of all documentation back to birth;
- Meeting the OEM review in time and successfully presenting a fully airworthy helicopter to the OEM in less than six months;
- Getting a valid airworthiness certificate by an EASA authority, in this case the Norwegian Civil Aviation Authority (CAA);
- Sourcing, replacing, exchanging and supplying engines, components and parts on time to meet the return to service conditions; and
- Finding a buyer in an extremely depressed market.
Working in close coordination, our team achieved a near-impossible feat. We returned LN-OJE to service as of January 2018 with a Norwegian certificate of airworthiness. To have any hope of selling LN-OJE within the given timeline, we had to actively promote the H225 to our client base from the very start of our mission. By month six, we sold the H225 to Agrarflug Helilift Gmbh. We were able to achieve this only because we understood the underlying value of the asset. Indeed, we know the market like the back of our hands and we thoroughly understand the features and benefits of our helicopters, as well as knowing how to pitch them most effectively to our client base.
This mission could not have been accomplished without the total dedication and outstanding professionalism of the team, matched only by the sheer motivation of the individual team members and the outstanding support we received from Airbus Helicopters.
Any deviation from the process and strategy we put in place would have caused the entire project to fail. In the end, as
a team and hand in hand with the OEM, we became the first to return an H225 to service with a valid EASA certificate
of airworthiness, and then the first in the world to sell a preowned H225 after the Norwegian H225 accident.
How Uplifting Aviation can support your project
If you own one or more aircraft, you want to ensure your assets are properly managed. Your aim is to protect the value of your aircraft assets or, at the very least, to mitigate any risks attached to ownership or financing.
Uplifting Aviation can deploy unique solutions to achieve your specific objectives. We manage and re-market your aircraft as if they were our own. Aircraft safety, asset value protection, cash flow generation and asset disposal are at the heart of what we do. When appointing a specialist to support your portfolio, it is imperative to select professionals with certain key characteristics:
- Hands-on and intimate approach with the aircraft they specialise in;
- Dedicated, solution-driven, reliable and accessible professionals who can work very quickly yet precisely;
- Aircraft consultants who have mastered the art of aircraft maintenance and understand the industry inside and out;
- Reputable aircraft brokers who can demonstrate track records of buying, selling and managing the most complex aviation transactions in an impartial manner;
- Expert aircraft consultants and brokers with established reputations and extensive networks of buyers, sellers and traders around the world.
If you own or finance helicopter/aircraft, engage with Uplifting Aviation to find out how we can minimise the risk and maximise
returns on your portfolio.
Essentials of aircraft portfolio investments
If you are looking at acquiring, investing in or funding an existing aircraft/helicopter portfolio, you’ve come to the right place.
There are always opportunities to buy, invest in or fund the right aircraft/helicopter portfolio at the right price.
To safeguard your investment or funding in the safest possible manner whilst ensuring expected returns, you should absolutely ensure the following:
- Each asset is technically assessed and accurately valued not only on paper but, most importantly, according to its actual market value at any given time throughout the ownership lifecycle;
- All risks associated with the ownership, registration, maintenance, management, leasing, operation, depreciation and repurposing of the aircraft/helicopter are clearly identified and continuously monitored;
- Aircraft and helicopter models forming your portfolio are sought after and can be sold, leased or parted out in less time than competitor models;
- Your fleet/portfolio management is deliberately structured around safeguarding its entire value throughout the ownership or financing period; and
- Maintenance is carried out by the very best providers; all contracts are carefully monitored; major repairs, overhauls and retrofits are negotiated in a manner that protects the assets’ value and, where possible, increases their resale value; and all power-by-the-hour agreements (PBH) are fully under your control.
Uplifting Aviation can guide you through all of these key aspects of aircraft/helicopter portfolio investment, in addition to negotiating new acquisitions and securing funding for aircraft/helicopter portfolio assets.
The founding base of our methodology resides in the design, engineering, implementation and execution of aircraft transactions. With just over 60,000 hours spanning three decades buying, selling, trading, maintaining, operating and managing rotorcraft and planes, we have developed a unique ability to deliver on our client’s objectives.
Get in touch to find out the instrumental role we can play in supporting your aircraft/helicopter portfolio objectives.
Bank representatives will undoubtedly surround themselves with aviation professionals, industry captains as well as aviation lawyers and independent audit specialists.
The expertise required for your aviation project will invariably be highly specific to the market segment you will be operating in, the company’s capabilities and the aeronautical assets on the balance sheet.
Generally speaking, the helicopter market is very fragmented. For instance, the worldwide helicopter industry comprises only a dozen of airframe manufacturers and less than a handful of engine manufacturers. The helicopter trade, for the most part, serves the needs of national and – for specific missions – regional operations. Then there is the business jet market, with its myriad of models – light-, medium- and long-range – flown across the world, with each market segment having its own dynamic and clientele. In the airline industry, on the other hand, there are essentially three types of players: airlines, aircraft Lessors and financiers.
Without intimate knowledge of the industry and access to the right buyers, it can be exceptionally difficult to achieve your objectives in time and on budget.
Contact us for a free, thorough and unbiased assessment of your aviation investment or funding project.
If you are seeking to sell an aviation business or liquidate aviation assets, please get in touch as we may have the right buyer within our network.
If you are interested in buying an aviation business or developing a group of aviation companies, it could pay dividends to engage with us on your project.
Finally, if you are looking to invest in emerging aviation technologies such as electric-powered aircraft, eVTOL (electrical vertical take-off and landing vehicles) or unmanned aerial vehicles, please contact us for a brief on the best opportunities and to find out about essential do’s and don’ts. us. We will be delighted to work with you.
Contact us to find out how we can help you.