Recent Airline Advisory Projects
1. Middle East Flag Carrier Airline
The Team advised a major Flag carrier airline in respect of the replacement of its entire Narrowbody fleet including spare engines and spare parts. This included the following key tasks:
Running a full RFP process between Airframe and Engine Manufacturers and supporting the Airline in discussions and negotiations with these OEMs;
Gathering key requirements from all of the main internal stakeholders Finance, Treasury, Fleet Strategy and Planning, Maintenance and Engineering, Powerplant, Training, Marketing, Revenue Management and ensuring where appropriate their key requirements were delivered throughout the process;
Analysing the Airline’s current and future proposed Route Network and modelling each potential aircraft option (including configuration (LOPA)) to determine the contribution and profitability on each route;
Negotiating key aspects of the offers including availability and delivery dates of firm and purchase right aircraft, price, discounts and credits, escalation (levels, sharing and caps), spare engines, support and support credits, performance guarantees, PDP levels and timing, financing support;
Supporting senior management in making recommendations and presentations to the Board and Shareholders;
Considering the most appropriate financing strategy for PDPs and Term Finance upon Entry into Service taking into account the Airline’s Cash Flow, Accounting and Fiscal requirements.
2. European Long haul Airline
The team advised a European long haul airline in respect of its fleet renewal programme, capital restructuring and cost savings programme. This included performing the following key tasks:
Phasing out of old widebody aircraft including successfully remarketing the aircraft for part-out and the engines and spare engines for running off remaining useful life or ‘green time’ to support a fleet of aircraft;
Renegotiating lease rentals and terms for leases previously negotiated but deemed unaffordable for new widebody aircraft due to deliver and managing the entry into service of those aircraft;
Advising the airline on recapitalisation with new investors and support from the state;
Sourcing and negotiating the leases of four new widebody aircraft with a lessor for entry into service following an RFP and competitive tender process;
Advising the airline on lease returns of older widebody aircraft, negotiating redelivery condition and lease return compensation; and
Structuring and arranging sale and leaseback of owned aircraft as an efficient disposal mechanism with lease end and return matched to new aircraft delivery dates.
1. European/US – Global Alternative Investment Fund
The team advise the European subsidiary of a US based Global Alternative Investment Management Firm in respect of its investment in an Engine Lease pool. This includes the following key tasks:
Sourcing suitable Engines and advising on price, maintenance condition, remaining ‘green time’ and re-lease and exit options including sale with or without lease attached, and part-out;
Reviewing monthly useage data to determine how the engines are being used and operated and calculating useage fees;
Monitoring the financial performance of the Lessee and Operator;
Ensuring Engines are operated in strict adherence to the lease including Geographic limits and operating environments (hot and harsh);
Monitoring the market for the engine types in the pool to determine current and future Residual Values and identifying optimal times to sell and buy; and
In conjunction with an MRO partner considering appropriate maintenance events and planning to obtain as much life from the engines at the lowest cost.
Recent Asset Management Projects
2. Australian Investment Fund and Far Eastern Airline
We advised a new Australian based Investment Fund on its acquisition of and investment in a used Airbus A320-200 ceo aircraft which involved the following key tasks:
Negotiations with the prior owner of the Aircraft (a major Lessor) prior to return of the Aircraft by a major Middle East airline in respect of the transition to the new owner, transfer of records, temporary parking;
Sourcing a Lessee for the Aircraft, a relatively young airline based in the Far East;
Negotiating a six year lease with specific requirements for the Aircraft by the local aviation authority and documenting a detailed LOI;
Arranging for certain work to be done to comply with both local aviation authority requirements and specific Airline requirements;
Arranging a Ferry Flight for completion of work and temporary transfer to a friendly Registry;
Oversight of completion of work at a major MRO facility in Europe; and
Final negotiation of Lease Agreement and oversight of Aircraft Delivery/Acceptance and Lease Commencement.
