opportunities mike walsh, in the asian charter market · based on feedback on 36 business jet...
TRANSCRIPT
Mike Walsh, CEO Asia Jet Partners Limited
24th June 2013
Opportunities
In the Asian Charter
Market
Brief Background
Established in 2008
Hong Kong-based management & charter jet company
Four Pillars of Services:
Aircraft Management
Consultancy
Jet Card Membership
On-Demand Charter
Senior management
David Erich,
COO
Lynn Sloan,
Dir. of Ops
Adam Parnes,
Dir. Of Maintenance
Bill Papariella,
President & CEO Jaslyn Chan,
Commercial Dir.
Mike Walsh,
CEO
Jet Edge International
Don Frankera,
Base Maintenance
Manager
Anders
Bertilsson,
Chief Pilot
Opportunities in the Asian Charter Market
Key Routes and Demand
Will Charter Customers Buy Aircraft?
How Big Can The Market Get?
Demand in Asia
Pre GFC
IPO Road Shows / Financial Industry
2010-2011
Mining Industry / Private Equity Road-Shows around S.E. Asia & China
2012 - Present
Leisure Trips / Entertainment Industry Trips / International Corporations
Trends and Key Routes
Current key routes out of GCR
HK – Shanghai / Beijing
HK – Phuket
Taipei – Shanghai
Shanghai - Tokyo
Rising Hubs Around Asian Countries
(Growing Economies):
Indonesia / Malaysia / Thailand
Jakarta – Singapore
Kuala Lumpur – Dhaka
Bangkok - Shanghai
Will charter customers buy aircraft?
Justifying the buy – annual usage ~ 100 hrs +
Economic focus from West to East
Status symbol
Ultimately wanting to own the asset
WHO?
Will charter customers buy aircraft?
What is the motivation to buy?
Private aviation enables wealth to grow “Time well spent”
Provides clout, trust factor
Tax benefits for the customer’s core businesses
Charter customers Profiles
HNWI
Private Companies
Public Companies
Government
Brokers
How Big Can The Market Get?
Drivers: - Access to a fleet; Int’l Corps expansion in Asia; Access to natural resources
Constraints:-
Availability of slots
Lack of infrastructure
Availability of commercial 135 registered aircrafts in the region
Controlled airspace
Lack of governmental support for GA to be accommodated
Walsh’s Chinese Zodiac Prediction
Thank You!
Q & A
June 2013
Structuring Trends in Asian Aircraft Finance – an Offshore
Perspective
Simon Lawrenson, Mourant Ozannes
Overview
Survey sent to all of the leading international offshore law firms with offices in Asia –
received surveys from Maples and Calder, Appleby and Mourant Ozannes
Based on feedback on 36 business jet financings in Asia between May 2012 and May 2013
Mourant Ozannes advised on 53% of the financings analysed in the survey – substantial
market share in Asia
Survey addresses 3 areas:
Aircraft
Aircraft Ownership
Financing Structures and Security
Offshore Trends: Registry’s Perspective
Conclusion: Why Offshore?
Aircraft
Type of Aircraft
Challenger 605 16%
Gulfstream G450 16%Challenger 300 5%
Global Express XRS
6%
Learjet 60 6%
Haw ker 4000 6%
Gulfstream G500 6%
Falcon 900LX 6%
Falcon 7x 6%Airbus ACJ 319 6%
Global 5000 21% Global 5000
Challenger 605
Gulfstream G450
Challenger 300
Global Express XRS
Learjet 60
Haw ker 4000
Gulfstream G500
Falcon 900LX
Falcon 7x
Airbus ACJ 319
Class of Aircraft
Large
63%
Medium
28%
Light
3%
Corporate Liner /
Heavy
6%
Corporate Liner / Heavy
Large
Medium
Light
Jurisdiction of Aircraft Registration
Cayman Islands 61%USA 14%
Europe 11%
Hong Kong 3%
Australia 3%
Isle of Man 8%
Cayman Islands
USA
Europe
Hong Kong
Australia
Isle of Man
Aircraft Ownership
Nationality of Beneficial Owners
0%
10%
20%
30%
40%
50%
China Hong Kong Indonesia Malaysia Singapore Philippines Others
Number of Beneficial Ow ners
Jurisdiction of Borrower
BVI companies
Cayman companies
Bermuda companies
Isle of Man companies
BVI 53%
Cayman
Islands
33%
Bermuda
8%
Isle of
Man 6%
HNWI v Institutional Purchaser? No Competition!
100% HNWI
0% Corporate / Institutional
Financing Structures and Security
Financing Structures and Security
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
50%
secured loan
financings
finance lease financing structures
unknown
sale and lease back
transactions
Financing structures and
security
Secured Loan Financing Structure
HNWI / Corporate
SPV Lender
Loan
Security Manufacturer
Purchase Agreement
Assigned
Purchase Agreement
Operator
Operating Agreement
Share Charge
Tripartite Agreement
Common Types of Security Used in Aircraft Financing Transactions
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Aircraft Mortgage Borrower / Lessee
Assignment
Equitable Share
Mortgage
Guarantee Security Deposit
Charge
Types of security used in the aircraft financing
transactions
Offshore Trends: A Registry’s Perspective
Civil Aviation Authority of the Cayman Islands responded as follows:
Percentage of registered aircraft with operations in Asia Pacific:
2013: 18%
2012: 13%
2011: 9%
Growing trend towards Asian client base
Most common aircraft type in last 2 years: Gulfstream 450, Bombardier Global 5000
Percentage of newly registered Asian aircraft subject to aircraft mortgage:
2013 (year to date): 70%
2012: 46%
Points towards a trend towards debt finance rather than cash buyers
Why Offshore?
The main structural concerns of the financier include:
Limiting structural risk
Limiting insolvency risk
Maintenance of the value of the aircraft
Ability to enforce its security and to repossess and sell/lease the aircraft upon default
The main structural concerns of the borrower / borrower shareholder include:
Tax neutrality
Confidentiality
Cost
Mitigation of risk for lenders to obtain best possible margin
Why Offshore?
Commercial/political neutrality
Legal certainty
Tax neutrality
Aircraft registration
Investor confidence and familiarity
Modern and flexible legislative framework
Security enhancement mechanisms
Utilisation of self-help remedies
Pricing
Questions?
Contact details:
Simon Lawrenson, Partner: [email protected], T +852 3995 5707
Mourant Ozannes is one of the world's leading offshore law firms.
We advise on the laws of the BVI, Cayman Islands, Guernsey and Jersey.
David Colindres, The San Marino Aircraft Registry
Jorge Colindres, The Registry of Aruba
Are all registries equal?
June 2013