State of the Industry

[Evil Twin]

A sinking ship, need cash not assets no matter what the cost. As has been said The end of an Era is ahead

[industry insider]

Key words are "cash proceeds". Sold aircraft were probably mortgaged, so that has to be paid off.

Recent sales show 225s are worth between 10 and 15 cents on the $. Good value for the purchaser.

[rotor-rooter]

Major activity in the Leasing business today. It looks like this deal may actually be executed after the previous attempts became unglued prior to concluding. Still an awful lot of impaired asset values, no matter the spin you put on it. The GECAS-Milestone relationship is obviously one of the important ones from the helicopter side, as well as the CHC angle from the assistance with the exit from Chapter 11. The helicopter business shrinks into insignificance in the overall scale and impact of a deal of this magnitude but is still an important feature due to the large number of parked and devalued helicopters within the portfolio.

https://www.aerotime.aero/27414-aercap-gecas-merger

https://www.aerotime.aero/upload/files/1250x420/boeing_737_max_in_a_aercap_livery_render_crop.jpg (https://www.aerotime.aero/upload/files/boeing_737_max_in_a_aercap_livery_render.jpg)on 8th March 2021
Image : AerCap
https://www.aerotime.aero/upload/profile/1797/80x80/50802620_2137369433239996_7964165231431647232_n_crop.jpg (https://www.aerotime.aero/rytis.beresnevicius)
RYTIS BERESNEVICIUS (https://www.aerotime.aero/rytis.beresnevicius)Merger of biggest leasing companies GECAS and AerCap on the horizon?Share this news https://www.aerotime.aero/img/Facebook.svg (https://facebook.com/sharer/sharer.php?u=https://www.aerotime.aero/27414-aercap-gecas-merger) https://www.aerotime.aero/img/Twitter.svg (https://twitter.com/intent/tweet?url=https://www.aerotime.aero/27414-aercap-gecas-merger) https://www.aerotime.aero/img/Linkedin.svg (http://www.linkedin.com/shareArticle?mini=true&url=https://www.aerotime.aero/27414-aercap-gecas-merger) https://www.aerotime.aero/img/Reddit.svg (https://www.reddit.com/submit?url=https://www.aerotime.aero/27414-aercap-gecas-merger&title=Merger%20of%20biggest%20leasing%20companies%20GECAS%20 and%20AerCap%20on%20the%20horizon?&styled=off&newwindow=1) ?subject=Merger%20of%20biggest%20leasing%20companies%20GECAS %20and%20AerCap%20on%20the%20horizon?&body=https://www.aerotime.aero/27414-aercap-gecas-mergerGeneral Electric (GE) is near a deal to merge its aircraft leasing subsidiary General Electric Capital Aviation Services (GECAS) with AerCap, another leading aircraft leasing company.

The deal, estimated to have a market valuation of around $30 billion, would combine GE’s aircraft leasing arm GECAS and AerCap, an Ireland-based aircraft lessor. The two companies are one of the largest aircraft lessors in the market, as GECAS owns or has on order approximately 1,650 airctaft. Meanwhile, AerCap, which also acquired International Lease Finance Corporation (ILFC) in 2014 to grow into one of the leading companies in the market, with 939 owned and 286 aircraft on order.

The two companies should announce the deal, if it will happen, on March 8, 2021, reported (https://www.wsj.com/articles/ge-nears-deal-to-combine-aircraft-leasing-unit-with-aercap-11615157471?mod=hp_lead_pos1) the Wall Street Journal (WSJ), citing sources familiar with the matter.

Aircraft lessors suffered throughout the COVID-19-induced crisis, as drying revenue streams within airlines have resulted in pleas to defer lease payments. As of January 2021, GECAS has a $400 million deferral balance, as customers have paid 84% of their invoices. In addition, the leasing company had 27 Aircraft on Ground (AOG), which was primarily driven by repossessions, according to GE’s latest financial results announcement. GECAS ended 2020 with a loss of $786 million, including an $836 million Goodwill charge booked at the end of Q2 2020. A year prior, the aircraft lessor ended 2019 with a net profit of $1 billion.

AerCap ended the year with a net loss of $299 million, while in 2019, it managed to achieve a net profit of $1.1 billion. Comparing the results of the two years, AerCap lost $519 million of revenue alone. Furthermore, it had to write-off a $1 billion asset impairment charge that was “related to lease terminations and sales transactions and were partially offset by related maintenance revenue,” read the company’s 2020 result announcement.

Nevertheless, 2020 still had a few bright spots for aircraft leasing companies as 49.6% of the world’s active aircraft were operated under an operating lease, increasing by 1.8%, inching ever closer to the 50% mark, according to Cirium Fleets Analyzer Data. Furthermore, Sale and Leaseback (SLB) active was relatively similar to levels seen in 2019, despite the fact that during 2020, manufacturers delivered fewer new aircraft and the absolute aircraft fleet has not grown in size.

Still, out of lessors with more than 50 aircraft in its fleet, neither AerCap nor GECAS had more than 65% of its aircraft active as of February 2021, ch-aviation.com data (https://blog.ch-aviation.com/2021/02/12/the-worldwide-active-fleet-is-decreasing-in-february/) pointed out. To further complicate the situation, Ascend by Cirium analysis pointed out that the aviation industry will see a significant feet surplus through late-2022 at best, minimizing opportunities for lessors to remarket their aircraft.

[JulieAndrews]

Was it the Bristow 225 sim that was recently flogged off to China at, what sim salesman said was 'a very low price'. Cash is King!

[Hot_LZ]

I believe they had no further need for it. Probably thrown in as part of the deal while flogging the idle 225s they had collecting dust.

LZ

[Variable Load]

I believe they had no further need for it. Probably thrown in as part of the deal while flogging the idle 225s they had collecting dust.

LZ

Exactly - a sweetner as part of the 225 deal.

[rotor-rooter]

MIlestone under new ownership as well.

https://www.swfinstitute.org/news/85096/aercap-holdings-to-buy-ge-capital-aviation-servicesAerCap Holdings to Buy GE Capital Aviation ServicesPosted on 03/10/2021
AerCap Holdings N.V. (NYSE: AER), a major company in the aircraft leasing space entered into a definitive agreement with General Electric (NYSE:GE) under which AerCap will acquire 100% of GE Capital Aviation Services (“GECAS”), a GE business.

The combined company will have over 2,000 owned and managed aircraft, over 900 owned and managed engines, over 300 owned helicopters and approximately 300 customers around the world. The deal between Ireland’s AerCap and GECAS would create the largest buyer of Airbus and Boeing planes.

Under the terms of the agreement, which has been unanimously approved by the boards of directors of AerCap and GE, GE will receive 111.5 million newly issued AerCap shares, US$ 24 billion of cash and US$ 1 billion of AerCap notes and/or cash. Upon completion of the transaction, GE is expected to own approximately 46% of the combined company and will be entitled to nominate two directors to the AerCap Board of Directors.

GE will transfer US$ 34 billion of GECAS’ net assets, including its engine leasing and Milestone helicopter leasing businesses, to AerCap. Current GECAS purchase obligations will transfer to AerCap, and GECAS’ more than 400 employees also will transfer to AerCap upon completion of the transaction.

Citi and Goldman Sachs have provided AerCap with US$ 24 billion of committed financing for the transaction.

AerCap expects to maintain its current investment grade credit ratings with S&P, Moody’s, and Fitch Ratings.

The transaction is subject to approval by AerCap shareholders, receipt of necessary regulatory approvals and satisfaction of other customary closing conditions. The transaction is expected to close in the fourth quarter of 2021. The combined company will retain the name AerCap, and GECAS will become a business of AerCap.

GE claims the transaction simplifies GE and focuses it on its industrial core—Power, Renewable Energy, Aviation, and Healthcare—while significantly reducing GE Capital assets and generating proceeds to further de-risk and de-lever.
AdvisorsCiti and Morgan Stanley acted as financial advisors to AerCap. Cravath, Swaine & Moore LLP, NautaDutilh NV and McCann Fitzgerald acted as legal advisors to AerCap.

PJT Partners LP, Goldman Sachs, and Evercore acted as financial advisors, and Paul, Weiss, Rifkind, Wharton & Garrison LLP, Clifford Chance LLP, and A&L Goodbody acted as legal advisors to GE on the transaction.

[92Driver]

Is Bristows in Australia going to be kept going?

[Medevac999]

A lot of chat going around that the Dutch SAR contract has been awarded? Might be a new provider.

[helicrazi]

A lot of chat going around that the Dutch SAR contract has been awarded? Might be a new provider.

It has been awarded, about a month or so ago, new provider

[Medevac999]

It has been awarded, about a month or so ago, new provider
I haven’t seen any announcement. Do you have a link?

[helicrazi]

I haven’t seen any announcement. Do you have a link?

No sorry, as far as I know, its awarded but not announced, I havent seen it publicised either.

[Medevac999]

No sorry, as far as I know, its awarded but not announced, I havent seen it publicised either.

thanks anyway. If it has been awarded 1 month ago then it should be announced soon.

[Hot_LZ]

I believe the winning bidder has been informed but it has not yet been publicly announced as it is in a period where other bidders can lodge disputes. There may have been a dispute from the incumbent and this has to be assessed.

LZ

[212man]

Some interesting Q&A in Parliament here, if you get your google translate page open......(or speak Dutch!)
https://www.parlementairemonitor.nl/9353000/1/j9vvij5epmj1ey0/vlgdj78hyhzr

[EESDL]

As this is ppRune - Bristows seem to have won it

[Medevac999]

They had the contract before. Translating 212's post it looks like the Dutch want a bigger air frame.

[Same again]

Translating 212's post it looks like the Dutch want a bigger air frame.

Or even one that actually meets the contractural requirements....

[Self loading bear]

They had the contract before. Translating 212's post it looks like the Dutch want a bigger air frame.

I think you have mis-interpreted it.
There was indeed a question about size but this has been answered.
The requirement for 16 persons rescue may been fulfilled by 2 aircraft.

indeed now machines with nightvision and true anti-icing.
and both aircraft manned with certified paramedic

[Medevac999]

I think you have mis-interpreted it.
There was indeed a question about size but this has been answered.
The requirement for 16 persons rescue may been fulfilled by 2 aircraft.

indeed now machines with nightvision and true anti-icing.
and both aircraft manned with certified paramedic

Google translate 😂

[dustycraphopper]

Whilst not the rotary element - hasn't the fixed wing element of Dutch SAR/Coastguard, formerly covered by a couple of DO-228's been awarded as well , currently in the process of being replaced by a couple of Dash 8's via a non European provider/operator ? I'd read that on the web somewhere a couple of months ago if I recollect correctly , although this is a rumour network (of course).

Changes a foot all around ?

[finalchecksplease]

Whilst not the rotary element - hasn't the fixed wing element of Dutch SAR/Coastguard, formerly covered by a couple of DO-228's been awarded as well , currently in the process of being replaced by a couple of Dash 8's via a non European provider/operator ? I'd read that on the web somewhere a couple of months ago if I recollect correctly , although this is a rumour network (of course).

Changes a foot all around ?

Correct, a consortium of JetSupport and PAL Aerospace were awarded the contract end of September last year for Maritime Surveillance Aircraft and it is with Dash 8's.

[Self loading bear]

Whilst not the rotary element - hasn't the fixed wing element of Dutch SAR/Coastguard, formerly covered by a couple of DO-228's been awarded as well , currently in the process of being replaced by a couple of Dash 8's via a non European provider/operator ? I'd read that on the web somewhere a couple of months ago if I recollect correctly , although this is a rumour network (of course).

Changes a foot all around ?

Dutch Coastguard Dash8’s are on wet lease from Dutch company Jetsupport (from spring 2022)
Jetsupport is backed by Canadian company Provincial Aerospace (or Provincial Air Lines??)
Jetsupport does currently the maintenance of the Dorniers. And PAL has previously delivered 2 Dash8s to Dutch Caribian Coastguard.

Dutch coastguard (https://www.luchtvaartnieuws.nl/nieuws/categorie/72/algemeen/nederlandse-kustwacht-vliegt-vanaf-voorjaar-2022-met-dash-8)

[Medevac999]

I believe the winning bidder has been informed but it has not yet been publicly announced as it is in a period where other bidders can lodge disputes. There may have been a dispute from the incumbent and this has to be assessed.

LZ
Still no announcement, so must be a big dispute if you are correct

[Medevac999]

As this is ppRune - Bristows seem to have won it

Maybe they have changed their mind? Nearly June with nothing announced!

[rotor-rooter]

https://www.ainonline.com/aviation-news/business-aviation/2021-08-26/bristow-orders-50-estols-launch-air-services-2026Bristow Orders 50 eSTOLs To Launch Air Services in 2026by Charles Alcock (https://www.ainonline.com/charles-alcock)
- August 26, 2021, 10:57 AM
https://www.ainonline.com/sites/ainonline.com/files/styles/ain30_fullwidth_large_2x/public/uploads/2021/08/electra_gray_helibasec46_hires_copy.png?itok=46SzNNiS&timestamp=1629994300 (https://www.ainonline.com/sites/ainonline.com/files/uploads/2021/08/electra_gray_helibasec46_hires_copy.png)
Helicopter operator Bristow intends to pursue new business opportunities by adding Electra's new eSTOL aircraft to its fleet from 2026. (Image: Electra)Helicopter operator Bristow today committed to buying up to 50 hybrid-electric STOL airplanes being developed by Electra Aero for air services starting in 2026, when the aircraft is set to enter service. Under a memorandum of understanding, Bristow will also support the startup in “development of the eSTOL aircraft’s operations, design, and safety features to meet customer, as well as FAA, EASA, and Transport Canada certification requirements.”

In addition, the two companies intend to jointly explore potential new applications for the hybrid-electric short takeoff and landing airplane, with a focus on middle-mile logistics needs for retailers.

The aircraft will feature Electra’s proprietary blown-lift design and eight electric motors, as well as an as-yet-unspecified turbogenerator to recharge batteries in flight. According to Virginia-based Electra, it will be able to carry between five and seven passengers or 1,800 pounds of cargo on trips of up to around 500 miles in all weather conditions. Currently unnamed, the eSTOL model is expected to need a surface of no more than 300 feet to take off and land, allowing it to operate many missions currently being performed by rotorcraft.

The move marks a significant departure for Bristow, which today operates a worldwide fleet of around 240 rotorcraft, mainly serving customers in the oil and gas sector, as well as providing services such as search-and-rescue for governments and civil organizations.

Want more? You can find a longer version of this article at FutureFlight.aero (https://www.futureflight.aero/news-article/2021-08-26/helicopter-group-bristow-shifts-business-model-commitment-50-estol-aircraft?__hstc=108169181.ae0af5cedb06327849c62ff9fe39e266.1 624902188607.1629905915336.1629994447409.28&__hssc=108169181.2.1629994447409&__hsfp=703819143), a news and information resource developed by AIN to provide objective coverage and analysis of cutting-edge aviation technology.

[Sir Korsky]

Investing in aviation + Bristow = :ugh:

[chcoffshore]

https://www.energyvoice.com/oilandgas/north-sea/346820/babcock-completes-10m-sale-of-aberdeen-headquartered-helicopter-business-to-chc/

All done then!