The helicopter leasing environment is enjoying a steady flow of financing and robust demand from customers, but increased competition in the sector is a cause for concern.
“Other than the growth in competition, the market is looking much better. When we entered the business, financiers had cut back on lending to helicopter operators, and there were few folks willing to support helicopters and operating lessors,” says Ed Washecka, chief executive of Waypoint Leasing in an interview with Flightglobal Pro.
“But now, there is a lot more financing interest, and that has made our business better.”
Solid financing demand has resulted in more capital markets activity – an opportunity Washecka is keen to explore.
“We are only 10 months old, so it is relatively early for us, but it is something we would anticipate down the road,” he says. “We need to reach a certain size first before entering the capital markets.”
Although export credit financing for helicopters has been extremely popular, it is not a form of financing Waypoint is actively considering at the moment.
“We are not looking at it at this time as we are relatively new and as we are getting a lot of support from banks with traditional financing means.”
Washecka also notes stronger demand for helicopter leasing since the lessor launched operations in May. Waypoint joined existing lessors Milestone Aviation and Lease Corporation International, while Macquarie Helicopter Leasing entered the market in July.
“We have definitely seen improved demand from customers that were not traditional users of leasing - these are the guys that are saying they want to lease now.”
However, Washecka is cautious about whether the existing demand warrants the number of lessors interested in the sector.
“It remains to be seen if demand is sufficient for all the folks that want to be in helicopter leasing,” he says. “The space is becoming increasingly crowded.”
Looking ahead, Washecka admits the uncertain interest rate environment is a concern for the lessor.
“It will be interesting to see how it will turn out because interest rates do matter to us in terms of the debt cost, and they matter to our customers in terms of the debt costs,” he says.
Waypoint anticipates growing its $250 million balance sheet to $400 million by the time of Heli-Expo in February. It expects to end 2014 with $1 billion in assets.