Milestone Aviation Group Leases World’s First Operational Sikorsky S-76D Helicopter to Trinidad and Tobago’s National Helicopter Services Limited

ANAHEIM, CA, USA, February 25, 2014 – Milestone Aviation Group, the global leader in helicopter leasing, announced today at Helicopter Association International’s Heli-Expo that it has financed the delivery of a Sikorsky S-76D to Trinidad and Tobago’s National Helicopter Services Limited (NHSL). The NHSL, which is a joint venture between the Government of Trinidad and Tobago and The National Gas Company of Trinidad and Tobago, is the largest helicopter operator in Trinidad and Tobago. The company will use the helicopter to provide offshore services to Repsol, the multinational energy company that operates several natural gas platforms off the coast of Trinidad. This is the first S-76D ever to be put into commercial operation and it is the first delivery from Milestone’s order of 20 firm and option S-76Ds.

“We are delighted to celebrate our partnership with NHSL with the first lease of the world’s first commercially operating S-76D,” said Walter Horsting, Milestone Senior Vice President. “It’s easy to see why there has been such tremendous demand for this aircraft. The 76D builds on Sikorsky’s highly regarded S-76 series and is ideally suited for these types of offshore operations. We are pleased to work with such a first-class operator as the NHSL as they continue to expand their fleet.”

“We are very excited to work with Milestone to add this state-of-the-art aircraft to our growing fleet,” said Joshey Mahabir, General Manager of NHSL. “As the largest operator in Trinidad and Tobago with a firm commitment to safety, we look forward to enhancing our service for our clients at Repsol.”

This is the seventh helicopter in NHSL’s all-Sikorsky fleet. In addition to this new S-76D, the service also operates three S-76A and three S-76C aircraft.

The latest in the highly successful Sikorsky S-76 family of helicopters, the S-76D delivers the same safety, reliability and efficiency as its predecessors, but with faster cruise speed and a more efficient fuel burn. The S-76D baseline equipment includes powerful and efficient Pratt & Whitney Canada PW210S engines; an advanced THALES TopDeck® integrated avionics system and four-axis autopilot; Health and Usage Monitoring System (HUMS) incorporated into fleet monitoring and analysis through Sikorsky Aerospace Services; active vibration control; and all-composite, flaw-tolerant main rotor blades. A Rotor Ice Protection System (RIPS) for all-weather capability will be available as an option.

The Milestone lease is fully backed by Sikorsky’s comprehensive Parts-by-the-Hour (PBH) and Parts Replacement programs.

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Notes to the Editor:

ABOUT MILESTONE AVIATION GROUP

Milestone Aviation Group is the global leader in helicopter leasing. Since launching in August 2010, and as of December 31, 2013, Milestone has acquired 143 aircraft valued at over US$ 2.2 billion and closed leases with 26 operators in over 20 countries on six continents. The company has a forward order book of over 130 firm and option aircraft valued at over US$ 3.0 billion. These delivery positions of in-demand helicopters are made available for lease globally. Milestone partners with helicopter operators worldwide and supports them through 100 per cent operating lease financing. The company provides financing for helicopters, serving a variety of industries, including offshore oil and gas, search and rescue, emergency medical services, police surveillance, mining and other utility missions. Further information is available at www.milestoneaviation.com.

This press release contains forward‐looking statements. Forward‐looking statements involve uncertainties, risks and assumptions, since these statements include information concerning Milestone’s possible or assumed future results or performance, operations, business strategies, financing plans and potential growth opportunities. Forward‐looking statements speak only as of the date they were made, and Milestone undertakes no obligation to update publicly or to revise any forward‐looking statements because of new information, future events or other factors. In light of the risks and uncertainties described above, the forward‐looking events and circumstances discussed herein might not occur and are not guarantees of future performance. Milestone’s actual results and performance could differ substantially from those anticipated in its forward‐looking statements.

MEDIA CONTACTS FOR MILESTONE AVIATION GROUP:

Eric Berman / Nathan Riggs of Kekst and Company

+1 212-521-4894+1 212-521-4894 / +1 212-521-4804+1 212-521-4804

eric-berman@kekst.com / nathan-riggs@kekst.com

 

Pratt and Whitney Canada and Milestone Aviation Group Sign US$ 75 Million, 15-Year Deal for New Helicopter Engine Fleet Management Program

ANAHEIM, CA (February 27, 2014)—Pratt & Whitney Canada (P&WC), a United Technologies Corporation company (NYSE:UTX), and Milestone Aviation Group, a global leader in helicopter leasing, today announced a US$ 75 million, 15-year agreement under which P&WC will offer its Flexible Turboshaft Engine Fleet Management program to Milestone customers.

The agreement, signed today at HAI Heli-Expo, will provide P&WC’s customized engine maintenance support to helicopter operators worldwide leasing through Milestone. Initially 25 helicopters with P&WC PT6C-67C engines will be covered under the fleet management program with the intent to expand the scope to include PW210S, PW210A, PT6C-67E, PT6B-37A, PT6T and PW207C engine models in the future.

“With more than 3,700 P&WC-powered helicopters flying globally, the helicopter market is a vital part of our portfolio and effectively supporting the needs of these operators is paramount,” said John Di Bert, Vice President, Customer Service, P&WC. “We are particularly excited to join forces with Milestone – a market leader that leverages both its scale and its deep operating expertise to provide its customers with unique benefits.  Together, we will deliver a fleet management program that is tailored specifically for individual operators and provides the peace of mind and predictability of guaranteeed future maintenance costs.”

The engine fleet management program will also offer helicopter operators who lease through Milestone a turnkey contractual framework that easily facilitates enrollment.

“The agreement to deliver P&WC’s fleet management program to helicopter lessees is a testament to our mission to provide unique solutions to our customers that help preserve their capital, reduce their risk and improve their cash flow,” said Matthew Harris, Chief Operating Officer, Milestone Aviation Group. “Pratt & Whitney Canada shares our passion for delivering exceptional customer service. Backed by their 40 years of Turboshaft engine expertise, we have created a flexible offering that best meets the support requirements of the growing number of operators benefiting from helicopter leasing.”

The longstanding relationship between P&WC and Milestone, which started with the first contracted PW206C in 2010, has expanded to include more than 160 P&WC engines across all variants.

About Pratt & Whitney Canada (P&WC)

Founded in 1928 and a global leader in aerospace, P&WC is shaping the future of aviation with dependable, high-technology engines. Based in Longueuil, Quebec (Canada), P&WC is a wholly owned subsidiary of United Technologies Corp. (UTC). UTC is a diversified company that provides a broad range of high-technology products and services to the global aerospace and building systems industries.

About Milestone Aviation Group

Milestone Aviation Group is the global leader in helicopter leasing. Since launching in August 2010, and as of December 31, 2013, Milestone has acquired 143 aircraft valued at over US$ 2.2 billion and closed leases with 26 operators in over 20 countries on six continents. The company has a forward order book of over 130 firm and option aircraft valued at over US$ 3.0 billion. These delivery positions of in-demand helicopters are made available for lease globally. Milestone partners with helicopter operators worldwide and supports them through 100 per cent operating lease financing. The company provides financing for helicopters, serving a variety of industries, including offshore oil and gas, search and rescue, emergency medical services, police surveillance, mining and other utility missions. Further information is available at www.milestoneaviation.com.

This press release contains forward‐looking statements. Forward‐looking statements involve uncertainties, risks and assumptions, since these statements include information concerning Milestone’s possible or assumed future results or performance, operations, business strategies, financing plans and potential growth opportunities. Forward‐looking statements speak only as of the date they were made, and Milestone undertakes no obligation to update publicly or to revise any forward‐looking statements because of new information, future events or other factors. In light of the risks and uncertainties described above, the forward‐looking events and circumstances discussed herein might not occur and are not guarantees of future performance. Milestone’s actual results and performance could differ substantially from those anticipated in its forward‐looking statements.

##

For more information:

MEDIA CONTACT FOR PRATT & WITHNEY CANADA

Catherine Fisette, P&WC

450-647-7-9411 7-7074

catherine.fisette@pwc.ca

www.pwc.ca

Follow us on Twitter at https://twitter.com/pwcanada for the latest news and updates.

MEDIA CONTACTS FOR MILESTONE AVIATION GROUP

Eric Berman / Nathan Riggs of Kekst and Company

+1 212-521-4894+1 212-521-4894 / +1 212-521-4804+1 212-521-4804

eric-berman@kekst.com / nathan-riggs@kekst.com

 

Milestone Aviation Group Signs Contract to Purchase Eight New-Generation AgustaWestland Helicopters as Part of Landmark Framework Agreement

ANAHEIM, CA, USA, February 27, 2014 – Milestone Aviation Group, the global leader in helicopter leasing, together with AgustaWestland, a Finmeccanica company, announced today at Helicopter Association International’s Heli-Expo that they have signed a purchase contract for eight new-generation AgustaWestland helicopters as part of the companies’ landmark framework agreement. The framework agreement was initially announced in September 2013. The contract for five AW139 and three AW189 helicopters will deliver by year-end 2014. The framework agreement, which covers 44 firm and option aircraft delivering over the next four years, when fully executed, represents the largest civilian helicopter sale in AgustaWestland history.

“We are pleased to expand our partnership with AgustaWestland across its family of aircraft,” said Milestone’s Chairman and CEO Richard Santulli. “We believe that the AW189 is going to serve an important role in passenger transport for the offshore oil and gas industry and search and rescue, so we are excited to be one of the launch customers for this state-of-the-art rotorcraft.”

“As the world’s largest helicopter lessor, Milestone has cultivated customer relationships on six continents giving us the confidence that they can lease this level of AgustaWestland equipment,” said AgustaWestland CEO Daniele Romiti. “Our partnership with Milestone provides operators with another way to gain access to AgustaWestland’s product line, allowing them to experience the tremendous benefits offered from the commonalities across the AW139, AW169 and AW189 family.”

The framework order is comprised of AW169 light intermediate, AW139 intermediate, and AW189 eight-ton class twin-engine helicopters.

Milestone had 31 AgustaWestland aircraft in its fleet as of December 31, 2013. These aircraft are on lease to operators in Asia, Australia, Europe and the Americas serving the offshore oil and gas, emergency medical service and search and rescue industries. The new aircraft will be made available for lease to Milestone’s partners and operators globally.

###

Notes to the Editor:

ABOUT MILESTONE AVIATION GROUP

Milestone Aviation Group is the global leader in helicopter leasing. Since launching in August 2010, and as of December 31, 2013, Milestone has acquired 143 aircraft valued at over US$ 2.2 billion and closed leases with 26 operators in over 20 countries on six continents. The company has a forward order book of over 130 firm and option aircraft valued at over US$ 3.0 billion. These delivery positions of in-demand helicopters are made available for lease globally. Milestone partners with helicopter operators worldwide and supports them through 100 per cent operating lease financing. The company provides financing for helicopters, serving a variety of industries, including offshore oil and gas, search and rescue, emergency medical services, police surveillance, mining and other utility missions. Further information is available at www.milestoneaviation.com.

This press release contains forward‐looking statements. Forward‐looking statements involve uncertainties, risks and assumptions, since these statements include information concerning Milestone’s possible or assumed future results or performance, operations, business strategies, financing plans and potential growth opportunities. Forward‐looking statements speak only as of the date they were made, and Milestone undertakes no obligation to update publicly or to revise any forward‐looking statements because of new information, future events or other factors. In light of the risks and uncertainties described above, the forward‐looking events and circumstances discussed herein might not occur and are not guarantees of future performance. Milestone’s actual results and performance could differ substantially from those anticipated in its forward‐looking statements.

FOR MILESTONE AVIATION GROUP:

Eric Berman / Nathan Riggs of Kekst and Company

+1 212-521-4894 / +1 212-521-4804

eric-berman@kekst.com / nathan-riggs@kekst.com

FOR AGUSTAWESTLAND:

Lauren Slepian

+ 1 267-357-0739

Lauren.Slepian@agustawestland.com

 

PARTNERSHIP BETWEEN MILESTONE AVIATION GROUP AND TURBOMECA ACHIEVES LANDMARK

Strong, Growing Partnership Provides Significant Benefits to Helicopter Industry

ANAHEIM, CA, USA, February 26, 2014 – Less than one year after launching a first-of-its-kind partnership offering unique services to Milestone customers, helicopter engine manufacturer Turbomeca (Safran) and Milestone Aviation Group, the global leader in helicopter leasing, celebrated a landmark with the announcement that the Milestone fleet has surpassed 100 Turbomeca engines. As of December 31, 2013, the Milestone fleet included 106 Turbomeca engines with an additional 56 engines on firm and option order.  This unprecedented growth gives Milestone customers unique benefits and value associated with this level of scale.

By leasing Turbomeca powered products through Milestone, customers can better control their maintenance costs and maximize the availability of their aircraft through the novel engine support solutions made available through the relationship – including access to Turbomeca’s Support by the Hour (SBH) program.

“Turbomeca manufactures exceptional products and cares greatly about serving the market and its customers,” said Milestone Chairman and CEO Richard Santulli. “When we launched this partnership, Turbomeca joined us in developing innovative ways to deliver high levels of service and customer support to small and mid-sized helicopter operators that are typically only made available to large-fleet operators. We look forward to working with Turbomeca as we continue to deliver increased value to Milestone lessees for years to come.”

“Our first year of partnership with Milestone has delivered clear value to our organizations and the helicopter lessees for whom it was designed” said Olivier Andries, Chairman and CEO of Turbomeca. “Through facilitating access to our SBH program and preferred access to the Turbomeca pool of assets we have enhanced aircraft serviceability and availability of the latest-standard engines”.

“We would like to congratulate Milestone for their exceptional growth and thank them for having chosen Turbomeca as their first engine partner. We are excited to pursue our collaboration and answer the needs of the market through innovative engine and support solutions.”

###

Notes to the Editor:

ABOUT MILESTONE AVIATION GROUP

Milestone Aviation Group is the global leader in helicopter leasing. Since launching in August 2010, and as of December 31, 2013, Milestone has acquired 143 aircraft valued at over US$ 2.2 billion and closed leases with 26 operators in over 20 countries on six continents. The company has a forward order book of over 130 firm and option aircraft valued at over US$ 3.0 billion. These delivery positions of in-demand helicopters are made available for lease globally. Milestone partners with helicopter operators worldwide and supports them through 100 per cent operating lease financing. The company provides financing for helicopters, serving a variety of industries, including offshore oil and gas, search and rescue, emergency medical services, police surveillance, mining and other utility missions. Further information is available at www.milestoneaviation.com.

ABOUT TURBOMECA (SAFRAN)

Turbomeca (Safran) is the leading helicopter engine manufacturer, and has produced 70,000 turbines based on its own designs since the company was founded. Offering the widest range of engines in the world and dedicated to 2,500 customers in 155 countries, Turbomeca provides a proximity service thanks to its 17 sites, 28 Certified Maintenance Centers, 18 Repair & Overhaul Centers, and 90 Field representatives and Field technicians. Microturbo, the subsidiary of Turbomeca, is the European leader in turbojet engines for missiles, drones and auxiliary power units. For more information: www.turbomeca.com and www.safran-group.com .

This press release contains forward‐looking statements. Forward‐looking statements involve uncertainties, risks and assumptions, since these statements include information concerning Milestone’s possible or assumed future results or performance, operations, business strategies, financing plans and potential growth opportunities. Forward‐looking statements speak only as of the date they were made, and Milestone undertakes no obligation to update publicly or to revise any forward‐looking statements because of new information, future events or other factors. In light of the risks and uncertainties described above, the forward‐looking events and circumstances discussed herein might not occur and are not guarantees of future performance. Milestone’s actual results and performance could differ substantially from those anticipated in its forward‐looking statements.

MEDIA CONTACTS FOR MILESTONE AVIATION GROUP:

Eric Berman / Nathan Riggs of Kekst and Company

+1 212-521-4894 / +1 212-521-4804

eric-berman@kekst.com / nathan-riggs@kekst.com

MEDIA CONTACTS FOR TURBOMECA:

Bettina FREY, Communications

+33 (0)5 59 12 53 66

www.turbomeca.com

Milestone Aviation Group Signs Contract with Sikorsky Aircraft Corporation to Purchase Eight Additional S-92® Helicopters

Milestone’s S-92 Order Book Now at 37 Units Valued at More Than US$ 1.2 Billion

ANAHEIM, CA, USA, Feb. 25, 2014 – Milestone Aviation Group, the global leader in helicopter leasing, and Sikorsky Aircraft Corporation announced today at Helicopter Association International’s Heli-Expo that Milestone has increased its S-92 order book by eight units. Sikorsky is a subsidiary of United Technologies Corp. (NYSE:UTX).

Milestone is already one of the world’s largest S-92 owners and with today’s announcement, it has increased its firm and option S-92 orders to 37 aircraft valued at more than US$ 1.2 billion. The forward orders are scheduled to deliver over the next five years with 15 scheduled for completed delivery in 2014 and 2015; more than half of which are already on lease or under letter of intent.

“The S-92 is a great helicopter and vital component of the offshore oil-and-gas, and the search-and-rescue markets,” said Milestone’s Chairman and CEO Richard Santulli. “We are pleased to expand our partnership with Sikorsky with these eight additional units. This will allow us to serve helicopter operators around the world with near-term delivery positions of this highly sought-after aircraft.”

“Milestone has quickly become one of our largest and fastest-growing customers,” said Carey Bond, president, Sikorsky’s Commercial Systems & Services. “This innovative company has provided a valuable service to the helicopter community in the form of 100% financing and near-term delivery positions of the world’s most in-demand, heavy-twin helicopter, the S-92. We are excited to grow our partnership with this order for eight more.”

Milestone already has 73 Sikorsky aircraft in its fleet today, including 45 S-92’s and 28 S-76 family aircraft including four of the brand new S-76D aircraft. These aircraft are on lease to operators in Asia, Australia, Europe, North America and South America serving the offshore oil and gas, search and rescue and emergency medical service industries. The new aircraft will enter into service globally in support of Milestone’s lessees serving offshore oil and gas transportation services, helicopter-based emergency medical service (HEMS), search and rescue (SAR), para-public and other utility missions.

Since entering service in September 2004, the S-92 has become one of the world’s leading helicopters.  Worldwide, more than 200 of the aircraft have logged more than 600,000 flight hours to date. Offshore oil operators fly the aircraft for an average of 90–110 hours per month in often challenging conditions. In addition to serving the offshore oil segment, the S-92 helicopter performs Head of State missions, search and rescue (SAR) operations as well as a variety of transportation missions for utility and airline passengers.

The aircraft incorporates numerous safety features, including a flaw-tolerant design. It was certified to harmonized Federal Aviation Administration, European Aviation Safety Agency and Transport Canada Part 29 requirements, as amended through Amendment 29-47, and remains the only aircraft in its class that is certified to this rigorous airworthiness standard without exception or waiver.

###

Notes to the Editor:

ABOUT MILESTONE AVIATION GROUP

Milestone Aviation Group is the global leader in helicopter leasing. Since launching in August 2010, and as of December 31, 2013, Milestone has acquired 143 aircraft valued at over US$ 2.2 billion and closed leases with 26 operators in over 20 countries on six continents. The company has a forward order book of over 130 firm and option aircraft valued at over US$ 3.0 billion. These delivery positions of in-demand helicopters are made available for lease globally. Milestone partners with helicopter operators worldwide and supports them through 100 per cent operating lease financing. The company provides financing for helicopters, serving a variety of industries, including offshore oil and gas, search and rescue, emergency medical services, police surveillance, mining and other utility missions. Further information is available at www.milestoneaviation.com.

ABOUT SIKORSKY AIRCRAFT CORPORATION

Sikorsky Aircraft Corp., based in Stratford, Conn., is a world leader in helicopter design, manufacture and service. United Technologies Corp., based in Hartford, Conn., provides a broad range of high technology products and support services to the aerospace and building systems industries worldwide.

This press release contains forward‐looking statements. Forward‐looking statements involve uncertainties, risks and assumptions, since these statements include information concerning Milestone’s possible or assumed future results or performance, operations, business strategies, financing plans and potential growth opportunities. Forward‐looking statements speak only as of the date they were made, and Milestone undertakes no obligation to update publicly or to revise any forward‐looking statements because of new information, future events or other factors. In light of the risks and uncertainties described above, the forward‐looking events and circumstances discussed herein might not occur and are not guarantees of future performance. Milestone’s actual results and performance could differ substantially from those anticipated in its forward‐looking statements.

MEDIA CONTACTS FOR MILESTONE AVIATION GROUP:

Eric Berman / Nathan Riggs of Kekst and Company

+1 212-521-4894 / +1 212-521-4804

eric-berman@kekst.com / nathan-riggs@kekst.com

MEDIA CONTACT FOR SIKORSKY AIRCRAFT CORPORATION:

Callie Ferrari / Communications Manager

Sikorsky Aircraft Corporation

+1 203-383-7150

Callie.Ferrari@Sikorsky.com

AIN: Success Begets Success for Milestone Aviation Group

by  Rob Finfrock

February 25, 2014, 3:45 AM

“We are very bullish on the rotorcraft market, and on the future,” said Milestone Aviation Group managing director Robert Dranitzke. The company placed an exclamation point on that statement on the show’s opening day, as Milestone announced its fleet has grown to 143 helicopters valued at over $2.2 billion since the company’s founding in August 2010 and it placed eight new orders for Sikorsky S-92 medium-lift helicopters, which increased the company’s total of firm orders and options for the type to 37 aircraft worth $1.2 billion. The leasing company also holds more than $3 billion in firm orders and options from rotorcraft manufacturers AgustaWestland, Airbus Helicopters and Sikorsky.

Today the company also holds $450 million in unsecured borrowing capacity, against a total revolving credit line of $800 million, thanks to what Dranitzke terms increased confidence from lenders.

“We’ve spent the past three and a half years educating financiers about the attractiveness of the rotorcraft segment,” he added. “Helicopters remain a relatively niche market for lenders, but as they have taken the time to learn more about the industry, banks are further encouraged to work directly with operators [to secure financing.]”

Dranitzke also noted Milestone’s ability to build a relatively large and diverse order portfolio–representing operators from the oil industry, EMS, law enforcement, and many other segments–has further encouraged investment in the rotorcraft segment. Most of Milestone’s 26 operating partners have signed multiple contracts with the company.

“From the beginning, Milestone set out to support any company that relies on working helicopters,” he said. “Whether we’re talking about EMS, search and rescue, pipeline surveillance, these are all great businesses in and of their own right, and Milestone is happy to support them any way we can. Banks often won’t do a deal for a single helicopter, but a large order shows strength,” Dranitzke concluded. “We’ve been successful thanks to the confidence of our financiers and partners.”

Vertical: Surpassing Expectations

By: Elan Head
2/25/2014

It has been an incredible few years for Milestone Aviation Group.

Since Milestone launched in August 2010, the helicopter leasing company has grown to become one of the industry’s biggest players. How big? At Heli-Expo 2014 in Anaheim, Calif., the company is announcing that it now has more than 143 aircraft valued at over US$2.2 billion in its fleet. That’s in addition to firm and option orders with AgustaWestland, Airbus Helicopters, and Sikorsky Aircraft Corp., delivering over the next five years, for more than 130 helicopters valued at over $3 billion at list prices. With 26 operating partners — including such industry leaders as Bristow Group and CHC Helicopter — Milestone now has helicopters working in more than 20 countries on six continents. Not a bad record for 42 months in business.

“Our size, order book, and relationships are unparalleled in the industry,” Milestone president Daniel Rosenthal told Vertical in the run-up to Heli-Expo. “We had a lot of expectations at the beginning, but our success has surpassed even our expectations.”

Last year was a particularly active one for the company, which executed 10 new financing facilities also totaling $2.2 billion. These facilities tapped multiple markets, including bank lending, life insurance companies and the Export-Import Bank of the United States. Highlights included the first Ex-Im backed bond for the helicopter market, a $600 million secured revolver, a $200 million unsecured revolver, a $80 million PDP facility and a $575 million private placement with an investment-grade corporate rating from Kroll. All told, the company now has more than 40 financing partners.

“We have ample access to capital to support our business plan and our customers,” Rosenthal said. “Because of our size, we are able to offer choices to our customers . . . and we are able to offer flexibility.”

Milestone is the creation of Richard Santulli, who is widely known as the founder and former chair and CEO of the fractional private jet ownership company NetJets. Drawing on his previous experience in helicopter leasing (as the head of RTS helicopters in the ’80s), Santulli brought to Milestone the same visionary approach and emphasis on customer relationships that characterized NetJets — what Rosenthal described as “the Richard Santulli school of doing business.”

“We look for customers who are devoted to long-term partnerships,” Rosenthal explained, adding that when Milestone begins a relationship with a customer, “there’s no one better” at meeting that customer’s needs. “I think the market understands the different approach we take to our customers,” he said.

Beyond its commitment to customer service, however, Milestone knows its market. The company’s rise to prominence has coincided with an increase in deepwater oil-and-gas drilling, which has driven demand for larger helicopters, such as the Sikorsky S-92 and Eurocopter EC225, that can carry more passengers farther offshore. Such helicopters are expensive, however, and even operators with hundreds of millions of dollars in turnover each year are coming to appreciate the flexibility that comes with leasing rather than buying.

“A lease can extend their balance sheet and allow them to bid on tenders they otherwise might not bid on,” Rosenthal said, noting that Milestone’s growing order book allows it to offer customers near-term delivery positions for aircraft that are in high demand. While the company has made some significant placements in the search-and-rescue and emergency medical services markets — and has identified other opportunities for diversification in the future — Rosenthal said he expects oil-and-gas to remain Milestone’s primary market as the company continues to grow.

And it does expect to grow. According to Rosenthal, the percentage of helicopters that are leased is still relatively small when compared to the percentage of leased assets in other capital-intensive industries, such as rail transportation. That suggests that the helicopter leasing market is far from tapped out. However, “we want to grow intelligently,” he said, emphasizing once again Milestone’s focus on sustainable, long-term partnerships. As for the recent entry into the market of other helicopter leasing companies, Rosenthal said that Milestone doesn’t see them as a major threat. “We view ourselves as being in a very different position [than other leasing companies],” he said, suggesting that, if anything, the new entrants have “brought more attention to the helicopter leasing space.”

Milestone’s growth has been so rapid that it is still feeling out the implications of its new position of influence (after all, the owner of the world’s largest fleet of S-92 helicopters will inevitably have some sway in the industry as a whole). While Milestone has been relatively quiet on industry issues thus far, Rosenthal said the company acknowledges that “growth has given us a seat at the table,” and is working behind the scenes to better understand operators’ needs with respect to technology and safety.

“We care very deeply about the helicopter industry,” he said, “and we want to participate in the dialogue about where the industry goes in the future.”

 

AIN: Leasing Spurs Helo Sales

by Thierry Dubois and Mark Huber

February 1, 2014, 1:05 AM

The rarefied deepwater oil and gas market has spawned new players and big deals in the helicopter operating leasing market, but to date these transactions have largely been confined to medium and large helicopters. What will be the impact of leasing on the industry as a whole, especially for smaller operators with light helicopters in the non-oil-and-gas segments, and will it ever become as predominant as it is for airlines, where approximately one-third of the fleet is leased?

The worldwide credit crunch and the trend for more deepwater energy exploration have created an environment for expansion of the leasing market, and new players–and some smart money–have entered the fray. These new rotorcraft leasing companies–Milestone Aviation, Waypoint Leasing, LCI Aviation, Lobo Leasing and Macquarie Rotorcraft Leasing among them–are promoting operating lease (an arrangement under which the lessor retains ownership of the helicopter), as opposed to financial lease, and are thus opening new possibilities for the operators to expand their fleets. Money has rapidly flowed into, and aggressive aircraft orders have been placed by, these new leasing entities: Milestone Aviation, as of September 30, had acquired more than 115 helicopters valued at over US$ 1.7 billion. It had closed leases with 25 operators in over 20 countries on six continents. It had raised $541 million of equity and $2.4 billion in committed debt financing.

Milestone Aviation has placed significant orders–mainly for medium twins–with AgustaWestland, Eurocopter and Sikorsky. Milestone is now talking to Bell, according to managing director Robert Dranitzke. LCI placed an order for $400 million worth of AgustaWestland helicopters in 2012.

Waypoint Leasing, capitalized with $375 million, made its first transaction in April with CHC and has placed a major order for several models of new AgustaWestland helicopters. Last fall, it announced that it had closed on a five-year $335 million (U.S.) revolving credit facility. Financial institutions involved include Credit Suisse, Goldman Sachs and Union Bank.

Milestone was founded by NetJets creator Richard Santulli; Waypoint is backed by funds–hundreds of millions of dollars–from personal computer impresario Michael Dell and global investor George Soros; Macquarie is run by former Sikorsky CEO Jeff Pino. Perhaps reflecting past loyalty, Macquarie has already placed orders for new Sikorsky S-92s and S-76s.

Revenue Stream for Operators

The smart money and minds are jumping into rotorcraft leasing for one simple reason: Often leasing is more lucrative than operating. Sometimes, even the operators know this. In September 2012, Bristow Group, one of the world’s largest OGP helicopter companies–it owns and/or operates 350 aircraft and its affiliates operate another 127–bought a $250 million minority stake in Canada’s Cougar Helicopters. The deal included the purchase of Cougar’s eight S-92s, which Bristow promptly leased back to Cougar and have been the source of revenue growth, according to Bristow’s latest quarterly report.

Bristow is playing both sides of the leasing coin, buying and leasing helicopters to others while leasing helicopters for its own operations. Indeed, leasing has become an integral part of its business strategy over the last several years. In its form 8-K filed with the Securities and Exchange Commission in May 2012 Bristow specifically targeted operating leases as a strategy for “lowering the cost and amount of capital needed to grow.” Twenty-two percent of Bristow’s fleet, worth approximately $750 million, is leased and that percentage may grow; the company’s goal is to boost the total share of its leased fleet to 30 to 35 percent, according to its most recent financial filings.

The strategy appears to be paying off: Bristow’s share price has increased from $48 to a high of $84 over the last 12 months and the company was able to fuel growth with an amazing $340 million worth of new capital expenditures over the first six months of the year, while at the same time boosting its overall cash position and improving liquidity.

However, leasing is not cheap. Many lessors now require lessees to protect the value of assets by enrolling them in hourly maintenance plans with engine, avionics and airframe manufacturers; these are either add-on costs or part of the base lease rate.

“Lessors recognize the costs to operate the helicopters, especially the engines and major components. To protect their asset value, one thing lessors like to have is a guaranteed maintenance program. It could be Power by the Hour on the engines, or in some cases tip-to-tail coverage,” said David Wyndham, president of aircraft consultancy Conklin and de Decker.

For operators like Bristow, which need to buy ever more expensive helicopters to meet customer demand, leasing has become an integral part of their business strategy.

The leasing companies can make large fleet purchases at a discount, further increasing their margins, while the OEMs can better predict demand in fluctuating markets–up or down. At last year’s Heli-Expo, Milestone’s Santulli cautioned OEMs against over-expanding production during boom times, counsel that meshes with lessors’ strategy of monopolizing production-line capacity during economic upswings. Milestone is partnering with Eurocopter on marketing its helicopter portfolio and offering customers the OEM’s parts-by-the-hour program.

How the Boom Began

Banks have long offered financial lease services for helicopters. At the end of the lease period, the lessee–usually the operator–becomes the owner. Therefore, in the operator’s accounting books, the helicopter has to appear as an asset.

What new players are offering is operating lease. In that instance, the lessor retains ownership of the helicopter. The operator buys a service, which appears in its results. “This is a major difference in accounting, as the helicopter no longer appears as an asset,” Fabrice Arfi, Eurocopter’s head of business development, explained.

“For an operator, having helicopters on financial lease tends to have a negative impact on the balance sheet, reducing the capacity to get into debt and thus impeding growth,” Arfi said. Operators are eagerly expecting a way to improve their balance sheets. This is the need the new leasing players are meeting. “Some companies, even those with access to plenty of capital, understand the benefit of having a portion of their fleet [typically 20 to 40 percent] off balance sheet; this frees capital for other aspects of their business,” Dranitzke said.

From the operator’s perspective, there is also the benefit of shifting the asset residual value risk to the lessor. “In addition, an operating lease generally allows matching the lease term with the underlying customer contractor length,” said Andrea Cicero, CFO of the Avincis group (better known under its Bond and Inaer brands). The cash-flow factor is important, too. “We start charging lease fees when the operating contract starts; this is different from buying a helicopter, where you typically have to put up a minimum of 15 to 25 percent of the aircraft’s capital value (the bank providing the rest) and start paying financial costs before you have an aircraft that generates revenue,” Dranitzke noted.

Leasing can provide tax advantages to lessees as well. Lease costs can be amortized and deducted over the term of the lease and “leasehold improvements,” which could include engines, avionics and interior refurbishments, can be deducted up to 50 percent within the first year of placing the asset into service–an important consideration when leasing a used or incomplete “green” helicopter. The cost of other improvements can be recovered over longer periods. Additional fixed costs associated with the lease can also be deducted.

By equipping operators to show they have aircraft available for the contract, the new leasing companies are enabling deals with oil companies that otherwise would not have happened. According to Bob Kokorda, Sikorsky’s v-p for sales, in the past, when a bank told an operator “You cannot take on more debt,” the operator had to pull out of competing for a contract.

Some believe the 2008-2009 financial crisis helped spawn the new lessors. “With the credit crisis, other lessors such as us looked at the world differently,” Ed Washecka, Waypoint’s CEO, told AIN. Moreover, the industry has undergone changes in company management. Traditionally, the operators’ bosses were mostly pilots. This began to change in the early 2000s, when more MBA graduates took the helm. They learned the helicopter industry’s culture, Arfi said, and did not want to disrupt the way their companies were run…until the 2008 crisis. Then, they felt free to institute new fleet management methods, Arfi believes.

Now, less than four years after pioneer Milestone Aviation started with the new model, operating lease agreements account for large numbers of helicopters. For example, Avincis has 24 aircraft under such terms. “We expect this number to increase to approximately 100 aircraft over the coming years,” Avincis’ Cicero added. According to Sikorsky’s Kokorda, Milestone owns about 50 S-92s, a combination of the ones it ordered directly from Sikorsky and the ones it bought from operators under leaseback agreements.

Skepticism Downstream

Will other segments of the industry take advantage of operating lease services? Not all operators are convinced yet. Christophe Rosset, president of SAF Hélicoptères, an EMS/aerial-work specialist in France, told AIN that his company has chosen not to lease. “This industry is very capital intensive; when you have finished paying for a helicopter, you begin earning money or you can sell the helicopter for a good price,” he explained.

Likewise, Air Methods CEO Aaron Todd told AIN at the start of the recent leasing boom that his company could attract capital for new helicopter acquisitions more cost effectively from the capital markets, as opposed to partnering with leasing companies. Air Methods is the largest helicopter EMS operator in the U.S., with 31 percent of market share and more than 400 aircraft operating in 42 states. It has grown in recent years through the acquisition of competitor companies and has embarked on an aggressive strategy of paying off aircraft leases that came with those transactions, spending more than $110 million in lease buyouts last year. The company says this strategy will reduce interest and depreciation expense.

From the lessors’ perspective, the offshore oil-and-gas industry was the low-hanging fruit. Nevertheless, Eurocopter’s Arfi is convinced other segments of the industry will come round to the idea sooner or later. “Aerial-work operators are not finance experts yet but it’s just a matter of time,” Arfi said. Meanwhile, lessors will have to get out of their comfort zone and educate segments other than oil-and-gas. This may be the strategy for survival in an increasingly crowded market.

Milestone’s Dranitzke said he would be happy to work with firefighting, pipeline surveillance and search-and-rescue specialists, providing the operator has a contract for using the helicopter. After oil and gas, EMS could be the next segment but the aircraft are smaller and less complex (and thus less expensive) and the fleets are smaller, according to Kokorda. Most attractive for lessors will be those EMS operators that fly relatively large helicopters on long-range missions such as hospital transfers, he said.

Leasing to EMS would translate into orders for smaller aircraft. “There is a market for lighter aircraft; [in fact] we have a letter of intent for Eurocopter EC145s,” Waypoint’s Washecka said. He noted, however, that his company’s portfolio of light singles and twins is unlikely to grow large. It’s just as much work to lease an AStar as a Super Puma, he explained, but the light single is 15 times cheaper, making it more difficult to justify the time.

On October 30, Kroll Bond Rating Agency assigned a rating of BBB, with a stable outlook, to Milestone. On the positive side, Kroll Bond mentioned the “significant advantage over newer entrants” the company has in terms of scale and senior management relationships with helicopter operators and manufacturers. However, while helicopters are an asset class with strong residual value, Milestone has a “somewhat high level of asset encumbrance,” in Kroll Bond’s view. The rating also reflects the “limited income and cash flow associated with Milestone’s short operating history.”

Early in January, Milestone announced that it had completed the private placement of US$ 575 million of senior secured notes, which Kroll Bond rated “BBB+.”

The commercial helicopter leasing industry is still in its infancy, the agency said, but this doesn’t seem to have dissuaded Milestone’s institutional backers. To date, Milestone has attracted the financial support of global banking heavy-hitters such as Lloyds, Barclays and Lombard, the asset finance division of the Royal Bank of Scotland; and the U.S. Export-Import bank is backing the sale of $187 million worth of Sikorsky S-92s to the lessor.

Expanding leasing downstream to light helicopters may in time drive sales to smaller operators, if they can meet lessor covenants, maintenance and other asset protection requirements. However, the parapublic markets might be more ripe for the taking, at least indirectly, as governments outsource traditional helicopter missions to private contractors such as Bristow, which recently landed a SAR contract in the UK, and the growing list of U.S. civil operators serving the U.S. Department of Defense.

Milestone Aviation Group Closes US$ 200 Million Unsecured Revolving Credit Line

Dublin, Ireland (January 9, 2014) – Milestone Aviation Group, the global leader in helicopter leasing, announced today that it has closed on an unsecured US$ 200 million revolving credit line. The new facility increases Milestone’s unsecured borrowing capacity to US$ 450 million and revolving borrowing capacity to US$ 800 million. Today’s announcement follows on the heels of the company’s January 7, 2014 announcement that it had successfully completed the private placement of US$ 575 million of senior secured notes.

“This revolver increases Milestone’s liquidity and provides greater financial flexibility to exploit the many opportunities we see to grow our business and serve our customers,” said Milestone’s Chairman and CEO Richard Santulli. “We believe that receiving this level of support in an unsecured facility from such an impressive group of financing partners reflects confidence in Milestone and our business model. We will use these additional resources to respond quickly to the needs of our operating partners around the world.”

A global mix of seven lenders participated in the facility. SunTrust Robinson Humphrey, Inc. served as Joint Lead Arranger and Sole Bookrunner and JPMorgan Securities LLC and Deutsche Bank Securities Inc. served as Joint Lead Arrangers. The other participating lenders include: Jefferies Finance LLC; Nomura Corporate Funding Americas, LLC; Bank of America, N.A.; and The Huntington National Bank.

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Notes to the Editor:

ABOUT MILESTONE AVIATION GROUP

Milestone Aviation Group is the global leader in helicopter leasing. The company partners with helicopter operators worldwide and supports them through 100 per cent operating lease financing. Milestone provides financing for helicopters, serving a variety of industries, including offshore oil and gas, search and rescue, emergency medical services, police surveillance, mining and other utility missions. Since launching in August 2010, and as of September 30, 2013, Milestone had acquired more than 115 helicopters valued at over US$ 1.7 billion and closed leases with 25 operators in over 20 countries on six continents. Further information is available at www.milestoneaviation.com.

This press release contains forward‐looking statements. Forward‐looking statements involve uncertainties, risks and assumptions, since these statements include information concerning Milestone’s possible or assumed future results or performance, operations, business strategies, financing plans and potential growth opportunities. Forward‐looking statements speak only as of the date they were made, and Milestone undertakes no obligation to update publicly or to revise any forward‐looking statements because of new information, future events or other factors. In light of the risks and uncertainties described above, the forward‐looking events and circumstances discussed herein might not occur and are not guarantees of future performance. Milestone’s actual results and performance could differ substantially from those anticipated in its forward‐looking statements.

MEDIA CONTACTS FOR MILESTONE AVIATION GROUP:

Eric Berman / Nathan Riggs of Kekst and Company

+1 212-521-4894 / +1 212-521-4804

eric-berman@kekst.com / nathan-riggs@kekst.com

Milestone Aviation Group Completes US$ 575 Million Private Placement Debt Financing

Dublin, Ireland (January 7, 2014) – Milestone Aviation Group, the global leader in helicopter leasing, announced today that it has successfully completed the private placement of US$ 575 million of senior secured notes. The company intends to use the proceeds to fund the continued expansion of its business and to refinance existing debt.

The senior secured notes, which have an average maturity of 8 years with tranches of 7 to 10 years, was upsized to US$ 575 million from the original offering size of US$ 300 million to satisfy investor demand. Seventeen investors participated in the private placement, sixteen of which are new to Milestone.

“We believe the investment community’s strong support for this offering is further validation of our business model,” commented Daniel Rosenthal, Milestone’s President. “Through this private placement, we have extended debt maturities, reduced interest rate exposure and further diversified funding sources, positioning Milestone to continue delivering for our operating partners for years to come.”

As announced in October, Kroll Bond Rating Agency assigned Milestone an investment-grade issuer rating of “BBB” with a stable outlook. The offering of senior secured notes was rated “BBB+” by Kroll Bond Rating Agency.

Merrill Lynch, Pierce, Fenner & Smith Incorporated (“Merrill”) served as Sole Bookrunner and Lead Placement Agent.

Deutsche Bank AG, London Branch (“DB”) and Nomura Securities International, Inc. (“Nomura”) served as Co-Lead Placement Agents; and Merrill, DB, Nomura, The Huntington Investment Company and SunTrust Robinson Humphrey, Inc. served as Co-Placement Agents.

The senior secured notes have not been registered under the Securities Act of 1933, as amended (the “Securities Act”), and may not be offered or sold within the United States or to, or for the account or benefit of, U.S. persons except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act. This press release shall not constitute an offer to sell or the solicitation of an offer to buy the senior secured notes, nor shall it constitute an offer, solicitation or sale in any jurisdiction in which, or to any person to whom, such an offer, solicitation or sale is unlawful.

###

Notes to the Editor:

ABOUT MILESTONE AVIATION GROUP

Milestone Aviation Group is the global leader in helicopter leasing. The company partners with helicopter operators worldwide and supports them through 100 per cent operating lease financing. Milestone provides financing for helicopters, serving a variety of industries, including offshore oil and gas, search and rescue, emergency medical services, police surveillance, mining and other utility missions. Since launching in August 2010, and as of September 30, 2013, Milestone had acquired more than 115 helicopters valued at over US$ 1.7 billion and closed leases with 25 operators in over 20 countries on six continents. Further information is available at www.milestoneaviation.com.

This press release contains forward‐looking statements. Forward‐looking statements involve uncertainties, risks and assumptions, since these statements include information concerning Milestone’s possible or assumed future results or performance, operations, business strategies, financing plans and potential growth opportunities. Forward‐looking statements speak only as of the date they were made, and Milestone undertakes no obligation to update publicly or to revise any forward‐looking statements because of new information, future events or other factors. In light of the risks and uncertainties described above, the forward‐looking events and circumstances discussed herein might not occur and are not guarantees of future performance. Milestone’s actual results and performance could differ substantially from those anticipated in its forward‐looking statements.

MEDIA CONTACTS FOR MILESTONE AVIATION GROUP:

Eric Berman / Nathan Riggs

of Kekst and Company

+1 212-521-4894 / +1 212-521-4804

eric-berman@kekst.com / nathan-riggs@kekst.com