Asset Finance Europe – By Paul Walsh
Milestone Aviation Group (Milestone) the first global specialty finance company for the helicopter private jet market is setting up in Dublin after securing $500m in equity capital commitments. US middle-market private equity firm The Jordan Company led the investor team, in partnership with Nautic Partners.
Santulli is back in business
With the launch, aircraft financing guru Richard Santulli returns to the aviation industry. Santulli has nearly 40 years of experience in the helicopter and private jet business and will be chairman of Milestone’s board of directors. Santulli is best known for inventing the fractional jet ownership industry and growing NetJets into a successful multinational corporation.
Before starting NetJets, he founded RTS Helicopters which quickly became the world’s largest helicopter lessor. Santulli also ran equipment leasing for Goldman Sachs. He and the rest of Milestone’s management team have purchased, operated and financed more private aircraft than anyone in the world.
“Milestone brings together my experience in helicopters, private jets and finance to address an important and underserved market niche,” said Santulli. “Starting a new business when I see a marketplace opportunity is what I love to do. Today, many good helicopter operators worldwide cannot get access to capital despite a demand for their services. At Milestone, we believe the quality of an operator should be defined by more than just its balance sheet.”
“No one knows this industry better than Richard Santulli and the Milestone team,” said John W. Jordan II, chairman and managing principal of The Jordan Company. “We couldn’t imagine a more highly qualified partner for this deeply compelling market opportunity. In the future, I suspect that people will point to Milestone as yet another example of this management team’s visionary leadership.”
Dublin is the place to be for aviation leasing
Milestone will be based in Dublin where it plans to create 40 new jobs. Chief executive William Kelly, former chief of NetJets Europe said “For aviation leasing there is only one place to be based, and that’s Dublin,” said Kelly, who highlighted the importance of Ireland’s skill set and tax infrastructure.
The company will launch with a staff of four, but Kelly expects job numbers to grow to about 40 within 18 to 24 months. Although Milestone executives sound confident about the future, the company is striking out in difficult terrain. Its launch follows financier Domhnal Slattery’s failure to date to get his executive jet business, JetBird, off the ground. Jetbird planned to buy 100 very light jets (effectively small air taxis) and rent them out to top execu-tives all over Europe. This year it cancelled its original aircraft order with Brazilian aircraft manufacturer Embraer.
100% financing on new, pre-owned and sale-leaseback transactions
Recent statements from Milestone say it will succeed where others have failed. “Our entire management team has experience in running an aviation company, which helps us uniquely understand our customers’ needs,” said William Kelly. “We understand safety, flight operations and maintenance. We believe it is important to look beyond a company’s capital structure into the hangar and cockpit to evaluate the true quality of an operator.”
The Company offers 100% financing on new, pre-owned and sale-leaseback transactions. Customers select their own aircraft and, following a credit review process of between three to five days, Milestone purchases the aircraft and enters into a lease agreement with the customer. Customers operate the leased aircraft and cover all operating costs without bearing residual risk.
Milestone will target any sectors where helicopters or private jet aircraft are needed. These may include oil and gas exploration and production, air medical services, search and rescue, law enforcement, environment, construction, coast guard and other government services, fire fighting, forestry, mining, and utility work.
Capitalising on an underserved market
Leasing is popular for businesses interested in private jets because it allows them to free up capital and avoid residual risk. Milestone says it will target public and private corporations, high net worth individuals and customers looking for an interim solution while they await a future delivery.
“Milestone offers us another compelling opportunity to invest in the leasing of transportation related assets,” said Richard Caputo, managing principal of The Jordan Company. “We see strong growth drivers for the business and think the Milestone team is uniquely qualified to capitalise on this underserved market.”
Milestone is led by an experienced executive team that has purchased, financed and operated billions of dollars of private aircraft – reportedly more than any other group in the world. The team includes people with a broad range of experience, including prior management experience in aviation and other industries, as well as leader-ship in top global financial, capital markets and legal firms.