Valued at $38.5bn
New analysis from global corporate aviation finance specialist Shearwater Aero Capital reveals that as many as 1,071 new private jets could be delivered across Europe between now and 2025. The cost of these aircraft could be in the region of $38.5bn.
Shearwater has provided asset-based loans on aircraft worth over $100 million located around the world since its launch in 2014.
The company’s analysis reveals that the region currently has a fleet of around 2282 business jets, and 1119 of these are classified as ‘heavy’ or large. Some 294 of the jets are medium sized, and 869 are classified as ‘light’ - these represent some of the smallest aircraft models.
Chris Miller, Managing Partner, Shearwater Aero Capital, said: “Europe is a very attractive region for business aviation finance companies like ours. It has larger, more expensive aircraft than other markets, and the market here is increasingly focusing on benefits of using financing to purchase business aircraft as opposed to just paying cash.”
Shearwater Aero Capital provides asset-based financing options to help clients purchase new or pre-owned business aircraft by securing the aircraft as collateral and intelligently managing the asset to preserve its value. Furthermore, asset-based financing also provides an opportunity for investors to capture high yield value in the fastest growth segments of aircraft sales - international developing markets. Last month, fast growing Shearwater Aero Capital announced it’s looking to raise up to $200m to support its growth, following its strongest performance ever in 2018.
The Company provides finance solutions for all types of aircraft. Family offices and private equity firms have provided the vast majority of its funding, and they have received an average Return on Investment (ROI) of between 13% and 15%, with no losses.
Funding is relatively low risk with an average loan to value of 65%. As added investment security, all financed aircraft are independently operated by third parties unrelated to the obligor, so in the event of a default Shearwater can quickly repossess and liquidate the aircraft to satisfy outstanding balances.
2018 was Shearwater’s strongest yet accounting for 60% of the Company’s business since its launch in 2014. Last year, its average loan size was approximately $7 million. It has provided loans from $1.5 million to $15 million for a range of aircraft from a Hawker 400 XP to a Bombardier Global 5000 and financed clients from Asia, the Middle East, Africa and the USA.
BlueSky Business Aviation News | 30th May 2019 | Issue #512