Charter/management and FBO company Key Air completed an arrangement in December to recapitalize its debt.
For the business aviation industry, the past year has been a trying one, to say
the least. Aircraft sales and usage declined steeply as the economic downturn tightened its grip, forcing operators to cope with the new financial realities, and in some cases with disparaging views of the industry.
Credit is tight, but money is available. That’s the message from Jim Pulie, director of business development for Center Capital’s general aviation division.
Last year when AIN took a close look at the aviation finance industry, the prevailing sentiment among industry insiders was that if you were looking for money to finance a business jet, the money would find you. At the time, many of the aircraft finance divisions still felt they were relatively insulated from their mortgage brethren, even within the same company.
Buying an aircraft can be a daunting task. Unless a company or individual has deep pockets, it will inevitably require either leasing with an option to buy or financing a purchase. Even if paying in cash is an option, doing so can be problematic. Dave Labrozzi, senior v-p and general manager of Danbury, Conn.-based GE Corporate Aircraft Group, explained the difference between leasing with an option to buy and outright purchase.
Students of the now-defunct training school Silver State Helicopters are suing KeyBank, one of the banks that financed their tuition, charging that it engaged in fraudulent loan practices and was an active participant in a Ponzi scheme concocted by Silver State executives. Silver State filed Chapter 7 liquidation bankruptcy on February 3.
The Springfield-Branson Regional Airport (SGF) in Missouri has become the first borrower under a new $300 million airport projects pooled loan financing program created by the American Association of Airport Executives (AAAE).
Mission Oaks National Bank in Temecula, Calif., hopes to become the lender of choice for pilots shopping for general aviation airplanes and, in some cases, helicopters in the western U.S. from New Mexico to Washington, as well as Nevada and Arizona, and occasionally other states. The bank will consider loans on aircraft valued up to $3.5 million. Veteran aviation lender Juan Alonzo has been hired to manage the new aircraft loan department.
- Page 2