Jim Noonan is senior managing director for the asset management arm of Global Jet Capital. The US aircraft finance and leasing company has a portfolio of more than 140 clients representing a mix of corporations and high-net-worth individuals
How did you get involved in aviation?
It’s not your classic story where my father was in the industry and I grew up loving aircraft. I’m more of a classic business finance guy who stumbled into the industry and then fell in love with it. My introduction was back in 2005 when I was hired to manage sales operations for the original Landmark Aviation, a business aviation services company that ran fixed-base operators and MRO facilities. Since then, I’ve spent time with StandardAero, the legendary Hawker Beechcraft business, and I was one of the first employees of Global Jet Capital in 2014.
How would you describe Global Jet Capital and your role?
I’m responsible for the company’s asset management strategy, the purpose of which is to effectively re-deploy our post-lease aircraft. We manage the asset portfolio throughout the life-cycle of the aircraft to ensure maximum return to the organisation. I’m based in our Boca Raton office, but before the current crisis, I spent a great deal of my time traveling and working with the team out of our Danbury, Connecticut location. Global Jet Capital is primarily focused on helping our clients efficiently deploy capital and our operating lease products help our clients reduce the downside risk of aircraft value depreciation. The business really took off in 2015-2016 and since that time we have deployed over $4.6 billion in capital. Our main operation is in Danbury, just outside New York, and we have offices in Boca Raton, Florida, Mexico City, Zurich and Hong Kong. Our current portfolio consists of more than 140 clients representing a global mix of corporations and high net-worth individuals, plus almost 170 aircraft – primarily in the midsize to ultra-long-range segments from across the spectrum of OEMs. We are a team of highly experienced business aviation and financial services experts who pride ourselves on understanding client needs and developing customised solutions.
How common are operating leases in business aviation?
Far more so than you might expect. While it’s true that approximately 70% of business jet purchases are cash transactions, we find more and more clients are looking to protect capital or redeploy it into their businesses. Our operating lease provides a client far greater flexibility to upgrade or change aircraft as operational dynamics evolve, as selling an aircraft can be problematic, depending on spot market conditions. With our operating lease, the aircraft won’t be carried as a non-earning asset on a client’s balance sheet and the lease payments will be recorded as monthly expenses. An operating lease client returns its aircraft at the end of the lease, never having been exposed to depreciating value risk. Related to the current global situation, we expect the operating lease will be even more popular when the rebound comes.
What does the asset management group do?
My team is responsible for ensuring that when aircraft come back off lease, we maximise the value of those assets either by re-leasing or selling them to existing or new clients. I have a small team with deep domain experience in aircraft valuation, refurbishment and sales. This is a unique capability for a company in our space and we believe we are a true differentiator.
What does your working week look like?
Aside from standard business practices and meetings, from one moment to the next, we can find ourselves embroiled in negotiations for the sale of an inventory aircraft, negotiating with an engine manufacturer over an unscheduled maintenance issue, or finalising the refurbishment plan for an aircraft we are about to receive back off lease. We maintain a consistent and active dialogue with our clients and often provide them with value-added opportunities. Last year, as automatic dependent surveillance – broacast compliance requirements were bearing down on the industry, we negotiated discounted slots with major MRO providers and made them available to clients who had not yet made an individual arrangement. Our objective is to provide support for our clients when appropriate, while leaving no rock unturned in our efforts to reduce downside exposure for the business as it relates to portfolio and inventory aircraft.
Where do you see business aviation going, considering the impact coronavirus is having on all elements of our industry?
When it comes to coronavirus, first and foremost our hearts go out to everyone whose lives have been impacted by this savage disease. As for the ultimate impact on our industry, as we sit here early in May, we really feel it’s too soon to tell. Right now, we’re trying to better understand the supply side disruption as aircraft OEMs and key supply chain players across the globe are grappling with shutdowns and furloughs. But the broad economic disruption is bound to result in demand-side impacts as well. From our perspective, we continue to see transaction activity. The fact that for the past several years the aircraft manufacturers have done such a good job managing backlog in the context of supply and demand dynamics gives us hope that we will not see a long-term loss in aircraft values.
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