Niche finance company Milestone Aviation is hoping to secure a first customer within the coming weeks to kick off its bid to "democratise the under-served helicopter and private jet markets".
"Until now small to medium-size operators - particularly in the helicopter industry - could not vie for lucrative contracts because they were unable to raise the necessary finance from banks to buy new aircraft to support it," says Milestone managing director Robert Dranitzke, a former chief operating officer with NetJets Europe.
He says this problem is particularly acute in the offshore emergency medical services and search and rescue markets. Here, small players are often barred from entry and the big companies "can't afford to take the next step" to purchase additional helicopters as banks - which have been squeezed by the credit crisis - are no longer willing to lend the money.
Milestone's senior management team includes other former NetJets executives including Bill Kelly, NetJets Europe and now Milestone chief executive, and Richard Santulli, NetJets founder and now chairman of the Milestone board.
"Starting a new business when I see a marketplace opportunity is what I love to do," says Santulli. "Today, many good helicopter operators worldwide cannot get access to capital despite a demand for their services. At Milestone, we believe the quality of an operator should be defined by more than just its balance sheet."
Milestone's plan is to acquire new aircraft and then lease them to operators. "Utility helicopters like the ones configured for offshore or EMS operations have strong residual values and are an attractive long-term investment for us," says Dranitzke, who expects the utility helicopter market to account for around 80% of Milestone's business within five years.
However, he adds: "The risk profile for private jets on the other hand is much greater for Milestone. This market is unstable and the values are always going up and down.
"Therefore we are interested in purchasing [more profitable and secure] nearly new large and super midsize business jets, ideally for public companies, private corporations and high-net-worth individuals and customers looking for an interim solution while they await a future delivery. But we will sell the assets in around three to five years when this market is stable again."
Dranitzke says Dublin, Ireland-based Milestone has raised enough capital to "compete globally and put us in a position where we do not have to say 'no' to a potential deal. Within the next three to 12 months we will tap the debt market with a view to rising around $500-$600 million."
Source: Flight International