aviation

  • Tracey Cheek posted an article
    JETNET LLC Releases Statement on the Passing of Vincent Esposito, President see more

    JETNET mourns the loss of our colleague and JETNET President, Vincent Esposito. Along with his brother, JETNET Executive Vice President Tony Esposito, Vincent helped grow JETNET from a small aircraft listing service to a worldwide aviation intelligence powerhouse. He kept our focus on growing JETNET’s research base, expanding our markets and products, embracing new technologies, and allowing us to thrive.

    Vincent brought a steady hand and great vision to JETNET, steering the firm to phenomenal growth, both domestically and internationally. He supported and encouraged his management team to constantly innovate and think ahead.

    The entire JETNET team will continue to honor and grow his legacy under the strong leadership of Tony Esposito.

    This article was originally published on AviationPros on January 10, 2019.

  • Tracey Cheek posted an article
    Aeronautical Systems and Rudy Tenore, V2 Aviation Join Forces see more

    FOR IMMEDIATE PRESS RELEASE:

    February 7, 2019, Miami, FL- Aeronautical Systems (ASI), a leading aviation consultancy specializing in business jet acquisitions and appraisals, diminution valuations, and asset management services, is pleased to announce that it has joined forces with Rudy Tenore, ASA, along with his newly formed V2 Aviation Consultants LLC, in a collaborative venture.

    Rudy chose to join with Aeronautical Systems because of their professionalism, dedication, diversity of service offerings, high ethical standards, and commitment to best-in-class products and services.  Both ASI founders, Randy De Long and Joe Zulueta, consistently demonstrated these high standards during Rudy’s tenure at Bank of America.

    V2 Aviation Consultants will provide support to ASI’s specialty business aircraft appraisal products.  Rudy’s passion for determining accurate aircraft values makes him a natural fit to collaborate with Aeronautical Systems.

    Rudy brings a wealth of aircraft and equipment finance experience, including valuations from his tenures at Bank of America, Hong Kong and Shanghai Banking Corporation, and General Electric Credit Corporation.  He was responsible for generating new debt and lease finance opportunities and developing business relationships with airframe manufacturers and the aircraft broker community. 

    In conjunction with Miami-based Aeronautical Systems, Rudy is excited to provide accurate, sophisticated, and reliable aviation consulting services to corporate professionals serving a broad range of industries and high net worth individuals.  The suite of services offered by both firms includes corporate jet acquisitions, portfolio management, technical and financial consulting, and litigation support.  

    As their joint venture prospects grow, they look forward to being of future service to you. Together, they will continue to demonstrate how expertise and accuracy meet distinction and excellence.

    This press release was originally published by Aeronautical Systems on February 7, 2019. 

  • Tracey Cheek posted an article
    Blue Ridge Jet Management Joins National Aircraft Finance Association see more

    FOR IMMEDIATE RELEASE

    FORT LAUDERDALE, Fla. - Jan. 16, 2019 - National Aircraft Finance Association (NAFA) is pleased to announce that Blue Ridge Jet Management has recently joined its professional network of aviation lenders. “NAFA members proudly finance - support or enable the financing of - general and business aviation aircraft throughout the world, and we’re happy to add Blue Ridge to our association,” said Ford von Weise, President of NAFA.

    Blue Ridge Jet Management is a multi-faceted private aviation company offering services designed to evolve with the needs of their customers, including aircraft management, charter brokerage, aircraft sales and acquisitions, business aviation consulting and flight crew services.  Their team encompasses over 100 years of aviation experience and supports their clients’ private aviation needs throughout the various phases of growth and development.  

    Many of their clients start with charter, transition through jet cards or a fractional share program and ultimately end up owning an aircraft.  The goal at Blue Ridge Jet Management is to foster the client relationship by finding the right solution for every need, now and in the future. 

    “Blue Ridge Jet Management shares the commitment of the National Aircraft Finance Association to our mutual clients who require the expertise of a team of professional partners to receive the best guidance, advice and counsel regarding the complex process of aircraft acquisitions, financing, operations and management.  It is an honor to be associated with NAFA and its Members,” stated Greg Kinsella, Co-founder of Blue Ridge.

    Much like NAFA, Blue Ridge Jet Management promotes the highest standards of customer service in private aviation. Blue Ridge and NAFA contribute greatly to the aviation industry as committed partners with their clients. 

    For more information about Blue Ridge Jet Management, visit www.blueridgejet.com.  

    About NAFA: 

    The National Aircraft Finance Association (NAFA) is a non-profit corporation dedicated to promoting the general welfare of individuals and organizations providing aircraft financing and loans secured by aircraft; to improving the industry's service to the public; and to providing our members with a forum for education and the sharing of information and knowledge to encourage the financing, leasing and insuring of general aviation aircraft. For more information about NAFA, visit www.NAFA.aero

  • Tracey Cheek posted an article
    Antares Jet Appraisals Joins National Aircraft Finance Association see more

    FOR IMMEDIATE RELEASE

    FORT LAUDERDALE, Fla. – Oct. 16, 2018 - National Aircraft Finance Association (NAFA) is pleased to announce that Antares Jet Appraisals has recently joined its professional network of aviation lenders. “NAFA members proudly finance - support or enable the financing of - general and business aviation aircraft throughout the world, and we’re happy to add Antares to our association,” said Ford von Weise, President of NAFA.

    Antares Jet Appraisals provides aircraft appraisal services for all types of aircraft, specializing in business jet and turboprop appraisals. With a team of accredited senior appraisers from the American Society of Appraisers, they comply with the Uniform Standards of Professional Appraisal Practice (USPAP), putting their more than 40 years of combined experience in the aviation industry to work for banks and financial institutions, insurance companies, and aircraft owners among others.

    ​Antares’ appraisers are certified by the American Society of Appraisers(ASA), comply with USPAP, and have access to recognized aircraft databases in the industry like Vref, Amstat, Jetnet, etc. The company performs full appraisals and inspections, desktop appraisals, future value estimations, orderly liquidation values, marketability analysis of aircraft, aircraft maintenance cost analysis, and personalized market studies.

    Much like NAFA, Antares Jet Appraisals promotes quality aircraft appraisal solutions, fostering continuity and safety throughout the aviation industry. Antares and NAFA are committed to the education necessary to maintain the highest of standards inaviation appraisals.

    For more information about Antares Jet Appraisals, visit https://www.antaresjetappraisals.com/.

    About NAFA: 

    The National Aircraft Finance Association (NAFA) is a non-profit corporation dedicated to promoting the general welfare of individuals and organizations providing aircraft financing and loans secured by aircraft; to improving the industry's service to the public; and to providing our members with a forum for education and the sharing of information and knowledge to encourage the financing, leasing and insuring of general aviation aircraft. For more information about NAFA, visit www.NAFA.aero.

     

  • Tracey Cheek posted an article
    planesworth Joins National Aircraft Finance Association see more

    FOR IMMEDIATE RELEASE

    FORT LAUDERDALE, Fla. – Feb. 11, 2019 -  National Aircraft Finance Association (NAFA) is pleased to announce that planesworth™ has recently joined its professional network of aviation lenders. “NAFA members proudly finance - support or enable the financing of - general and business aviation aircraft throughout the world, and we’re happy to add planesworth™ to our association,” said Ford von Weise, President of NAFA.

    The company focuses on adding value to UNHW individuals, wealth managers, investment bankers and their tax advisors through asset valuation, acquisition and equipment finance processes. The company also aids aircraft owner-operators, managers and brokers with services such as USPAP appraisal, market insight (market or fleet evaluations), diminution of value, expert witness testimony, brokerage and aircraft management consulting.

    Led by founder, Stephen J. Coo­nan, Sr., planesworth™ has built up a strong acumen and affinity to the aviation industry with over $25B worth of evaluated corporate aircraft. Mr. Coonan, Sr. spe­cial­izes in air­craft val­u­a­tion and acqui­si­tion. He spent 17 Years as a Senior Air­craft Appraiser of the National Air­craft Appraiser’s Asso­ci­a­tion and is transitioning to the American Society of Appraisers (ASA). He is com­pli­ant with the Uni­form Stan­dards of Pro­fes­sional Appraisal Prac­tices (USPAP). His range of air­craft appraisal expe­ri­ence includes Boe­ing Busi­ness Jets, Gulf­streams, Lear­jets, Chal­lengers, Hawk­ers, Fal­cons and Cita­tions. In the past twenty years, he has com­pleted over $25 bil­lion in air­craft valuations.

    Accompanied by Stephen J. Coonan, Jr., “Junior”, with his expertise in assets and capital markets, planesworth™ is able to find and evaluate up-to-date market data, helping create insight for their clients. In the past three years the group has acted as agent for either the buyer or the seller in the acqui­si­tion of sev­eral cor­po­rate air­craft, val­ued at over $100 mil­lion. Their port­fo­lio includes the pri­vate wealth man­age­ment clients of sev­eral For­tune 50 banks and cor­po­ra­tions, includ­ing Citibank, Mer­rill Lynch, Gold­man Sachs, Wells Fargo and Deutsche Bank.

    Much like NAFA, planesworth™ provides a high level of knowledge and experience to help their clients make smart and informed decisions. planesworth™ and NAFAare dedicated to advancing the aviation industry as a whole byfosteringthe education and communication necessary for safe and timely appraisals and transactions. 

    For more information about planesworth™, visit www.planesworth.com

    About NAFA: 

    The National Aircraft Finance Association (NAFA) is a non-profit corporation dedicated to promoting the general welfare of individuals and organizations providing aircraft financing and loans secured by aircraft; to improving the industry's service to the public; and to providing our members with a forum for education and the sharing of information and knowledge to encourage the financing, leasing and insuring of general aviation aircraft. For more information about NAFA, visit www.NAFA.aero.

  • Tracey Cheek posted an article
    Dick Ramsden is retiring! see more

    As some of you may have heard, Thursday, January 31, 2019 marked Dick Ramsden’s last day at Wells Fargo, following a 30+ year career in aviation financing.

    Dick was a past President & Director of NAFA and Ramjet Aviation is a current member. Dick plans to remain active in the industry, having joined his sons at Ramjet. He is planning on helping them expand their family-owned operation by providing financial consulting in addition to the sales, acquisitions, and appraisal services that Ramjet currently offers. He looks forward to the opportunity to continuing to work with his NAFA friends and asked that we share his new contact information:

    Email: richard@ramjetaviation.com Phone: 954-401-3530

    Best of luck in your next endeavors!

  • Tracey Cheek posted an article
    The Air Law Firm Joins National Aircraft Finance Association see more

    FOR IMMEDIATE RELEASE

    FORT LAUDERDALE, Fla - January 23, 2019 - National Aircraft Finance Association (NAFA) is pleased to announce that The Air Law Firm has recently joined its professional network of aviation lenders. “NAFA members proudly finance - support or enable the financing of - general and business aviation aircraft throughout the world, and we’re happy to add Air Law to our association,” said Ford von Weise, President of NAFA.

    The Air Law Firm LLP is a boutique aviation law practice providing international legal services to the aviation industry. Their practice model sustains a bespoke and focused service from an agile and responsive team who can react quickly to the changing demands of a business environment. Air Law’s services are partner-led and proactive, with lawyers who are recognized internationally as being experts in their fields. 

    The practice has in-depth knowledge and understanding of the global aviation industry including aircraft finance and leasing, acquisitions and sales, litigation, regulatory advice and aviation insurance.The Air Law Firm’s international lawyers are qualified in various jurisdictions, routinely handling and managing transactional and commercial work, claims and litigation around the world on behalf of a multitude of clients – from individuals to the largest airlines.

    The Air Law Firm understands the cultural aspects and nuances of international business. The group is adept at helping to strategize, finding solutions for clients as business people and legal partners rather than a last resort. They often resolve clients’ disputes privately through mediation and arbitration and provide counsel as a respected and trusted advisor, consistently delivering practical advice and adding real value.

    “We at the Air Law Firm are delighted to join NAFA and look forward to sharing experience, opportunities and information with NAFA members. We are avid supporters of doing everything possible to enhance the experience of buyers and lessees of corporate and private aircraft to ensure seamless and professional transactions,but also with a view to investigating where improvements and innovative products can be discussed. NAFA presents us with an excellent forum for this and we welcome the interaction with other members,” stated Aoife O’Sullivan, Partner at the firm.

    Much like NAFA, The Air Law Firm is passionate about aviation and upholding the highest standards in client service.  Air Lawand NAFA foster strong business relationships and global networks in the aviation industry, with the knowledge and dedication to support continued development.

    For more information about The Air Law Firm, visit www.theairlawfirm.com.  

    About NAFA: 

    The National Aircraft Finance Association (NAFA) is a non-profit corporation dedicated to promoting the general welfare of individuals and organizations providing aircraft financing and loans secured by aircraft; to improving the industry's service to the public; and to providing our members with a forum for education and the sharing of information and knowledge to encourage the financing, leasing and insuring of general aviation aircraft. For more information about NAFA, visit www.NAFA.aero.

  • Tracey Cheek posted an article
    YYZlaw Joins National Aircraft Finance Association see more

    FOR IMMEDIATE RELEASE

    FORT LAUDERDALE, Fla. – Feb. 5, 2019 – National Aircraft Finance Association (NAFA) is pleased to announce that YYZlaw has recently joined its professional network of aviation lenders. “NAFA members proudly finance - support or enable the financing of - general and business aviation aircraft throughout the world, and we’re happy to add YYZlaw to our association,” said Ford von Weise, President of NAFA.

    YYZlaw (formerly Clark & Company) is a corporate and regulatory law practice with an emphasis on the aviation and travel industries. Their main clients are scheduled and charter international airlines flying into Canada, domestic air carriers, Canadian aerospace companies, aviation and travel trade associations, tour operators, aircraft lessors, financial institutions and a variety of other organizations and professionals related to the aviation and travel industries.“With our decades of experience serving the regulatory and transactional needs of business aircraft financiers and their clients, YYZlaw is excited to continue to further the growth of our industry by supporting NAFA’s mandate,” said Bill Clark, Managing Partner at YYZlaw.

    The company provides legal counsel services to foreign and domestic corporations conducting aviation and travel businesses under the laws of Canada, including: regulatory advice on all aviation matters, the travel and tour operator industries; commercial and transactional advice on aircraft leasing, acquisitions and financing; commercial advice to aviation and travel companies in regard to laws of general application relating to labor, immigration, real estate and taxation; andadvice regarding the Cape Town Convention, including assistance with forming and maintaining accounts on the International Registry. “We pride ourselves on providing cost-effective, timely and sensible legal advice because we understand the real-life demands present in the business aviation sector,” said Ehsan Monfared, Legal Counsel at YYZlaw.

    Much like NAFA, YYZlaw fosters strong client and business relationships with their expanding network of specialized professionals. YYZlaw and NAFA provide the knowledge and dedication necessary for continued development in the aviation industry.

    For more information about YYZlaw, visit www.yyzlaw.com

    About NAFA: 

    The National Aircraft Finance Association (NAFA) is a non-profit corporation dedicated to promoting the general welfare of individuals and organizations providing aircraft financing and loans secured by aircraft; to improving the industry's service to the public; and to providing our members with a forum for education and the sharing of information and knowledge to encourage the financing, leasing and insuring of general aviation aircraft. For more information about NAFA, visit www.NAFA.aero.

  • Tracey Cheek posted an article
    Financing Your Business Aircraft: Reaping Ownership Benefits, While Avoiding Leasing Pitfalls see more

    NAFA member Martin Ormon, President and Founder of Aircraft Finance Corporation, compares the benefits of buying versus leasing your business aircraft.

    With the new year comes the first full-year's tax filing under the Tax Cuts and Jobs Act of 2017.  If your accountant or Chief Financial Officer (CFO) works like most, you'll have already engaged in a couple of briefings on the charges - on adapting to the law's new language - and you probably have another meeting planned to lay out for you the impact of those changes on this year's numbers.

    For those looking to buy or lease a business aircraft after holding-off a while to weigh up the impact of the 2017 tax changes, now would be an excellent time to answer a recurring question asked before companies make a major decision on a big-dollar equipment outlay.

    Should you buy or should you lease?

    Each approach brings its own benefits and limitations, just as leases themselves vary in type to meet the differing needs of the operator.

    But Martin Ormon of Aircraft Finance Corporation questions why so  many operators are choosing to lease older aircraft, knowing that to keep it at the end of the lease means coming up with a buyout amount for the leasing company.  "Otherwise, they walk away with nothing but their receipts," Ormon notes.

    While Ormon acknowledges that for later-model business aircraft lease terms may benefit an operator's cash flow picture, "for many of the older aircraft (7 years and up), buying it with today's more attractive finance terms can make more sense for cash flow - and at the end of the term leave the owner with an asset, paid off and wholly owned," he elaborates.

    "A lease structure and the supply of good aircraft and low financing costs for 20 years makes more sense financially than leasing."

    But then, financing aircraft sales is Martin Ormon's business.  He owns and operates Aircraft Finance Corporation, a rare lending operation with regular terms as long as 20 years for older business-turbine aircraft.

    Aircraft Finance Corp:  The Backdrop 

    When we last spoke with Martin Ormon in 2016, the topic focused on understanding the benefits to clients from dealing with Aircraft Finance Corp. versus more traditional banks and finance companies, particularly when financing business aircraft aged 10 and older.

    Since then Ormon's business has continued to thrive, so we sought his input on the lay of the land in light of a small renewed 'boom' of recent months.  Some credit the boom to the 2017 tax-reform law signed into law 13 months ago.  Others credit the resurgent economy and strong market growth - a more tentative view recently.

    Still others cite both of the above and a resurgence in market demand after a lengthy period in which many buyers held back.  Against the backdrop of the Great Recession and the crash in business-aircraft sales, the resurgence, for whatever cause, is welcome among companies servicing business-aircraft transactions.

    What hasn't changed is the availability of good finance terms, according to Ormon.  "You get the deals from the secondary (market) guys; you don't get the deals from the guys who make the business."

    That means operators looking to buy an older jet still face tougher terms than operators who are able to shop for new or near-new aircraft.  "Leasing terms aren't what they once were," Ormon claims.  "The guys in the leasing business today are struggling more because of the nightmare hit on residual values.

    "And the residual value on some of these aircraft has gone beyond hitting bottom - and they're still getting a resurgence in market value because of increased demand."

    Aircraft Finance Corporation continues to do a banner business because of its combination of competitive interest rates, competitive down-payment terms and loan terms as long as 20 years.

    "The one thing that i've learned , "Ormon offers, "is that interest rates do not dictate demand for aircraft purchases - while it may effect some who don't have the credit history others do."

    Used Aircraft Competing Against New

    Ormon cites a number of loans recently written by Aircraft Finance Corporation, loans which took advantage of depressed prices of some older aircraft with loan terms more competitive than lease terms.

    "With values where they are today, why would anyone buy a new aircraft?" he asked.  "With our 20-year amortization system we can make an aircraft less expensive than leasing."

    One example Ormon offers is for a Bombardier Challenger 605.  The owner's situation had changed and they needed some relief from the cash-flow pressures.  "We refinanced that Challenger 605, which ahd payments exceeding $70,000/month on a seven-year amortization.  We did it for 20 (years) and their payment came down to about $20,000/month, solving the owner's problem."

    Ormon says that many of the finance outfits don't want people to know that 20-year loan terms are available.

    Lease Versus Buy

    "At the end of the day, that 20-year term gives a lot of people more financial freedom and flexibility," Ormon highlights.

    Todday's terms available from financing firms like Martin Ormon's make financing more attractive than leasing.  "You'd still have to buy out the residual value to own that aircraft at the end of the lease.  That or accept never owning the airplane."

    Weighed against a lease structure with today's supply of good aircraft, the low financing costs for a 20-year term makes borrowing to buy more financially sensible than leasing, Ormon stresses, adding that Aircraft Finance Corporation underwrites its own financing, which makes dealing with the company more streamlined.

    This different approach works for the buyers Ormon finances, for the sellers he helps sell their old aircraft, and for Aircraft Finance Corporation of a business.

    Ormon's small aircraft finance bank began operations in August 2000, and he let it make money for him while he continued in his own business.  "I didn't think much more about the small amount of business we were doing ... until the downturn," he recalls.  

    "Now, it's going great, because we help people and they come back again for their next deal."

    It's good for Business Aviation - and what's good for Business Aviation is good for the aviation economy.

    This article was originally published in the February issue of AvBuyer Magazine

     

  • Tracey Cheek posted an article
    Clay Lacy Aviation Joins National Aircraft Finance Association see more

    FOR IMMEDIATE RELEASE

    FORT LAUDERDALE, Fla. – Feb. 4, 2019 – National Aircraft Finance Association (NAFA) is pleased to announce that Clay Lacy Aviation has recently joined its professional network of aviation lenders. “NAFA members proudly finance - support or enable the financing of - general and business aviation aircraft throughout the world, and we’re happy to add Clay Lacy to our association,” said Ford von Weise, President of NAFA.

    Founded in 1968 by an aviation legend and industry pioneer,Clay Lacy Aviation is considered one of the world’s most experienced operator of private jets. For the past 50 years the company has managed, maintained and globally operated jet aircraft from every major manufacturer- serving business and world leaders, Fortune 500 companies, government agencies, professional athletes, sports franchises, celebrities and dignitaries. 

    “NAFA brings together talented leaders from across the business aviation industry and we are delighted to support and participate in their efforts,”said Scott Cutshall, VP Brand Development with Clay Lacy.

    Clay Lacy Aviation is a trusted partner for aircraft management, charter, maintenance, avionics, interiors and FBO services. The company has aircraft operations and regional offices across the U.S., including a full-service FBO at Van Nuys Airport in Los Angeles, and aircraft maintenance centers in Los Angeles, San Diego, and Oxford, Connecticut. They are also the authorized dealer for the Quest Kodiak 100 Series II in the Northeastern U.S. 

     

     Waterbury-Oxford Airport, Oxford, CT

     

    The company prides itself on having the resources of a large organization, with the agility, responsiveness and personal attention of a small, private flight department. Their highly knowledgeable team of aviation professionals manages every facet of their clients’aircraft- whether one aircraft or a fleet, a light jet or an airliner- anticipating needs, reducing costs and protecting assets.

    Much like NAFA, Clay Lacy Aviation is dedicated to the continuous improvement of safety, service and value throughout the industry.Clay Lacy and NAFA foster highly trained, knowledgeable and passionate aviation professionals worldwide with their expanding networks of experienced and trusted businesses. 

    For more information about Clay Lacy Aviation, visit claylacy.com.  

     

    Van Nuys Airport, Los Angeles, CA

     

    About NAFA: 

    The National Aircraft Finance Association (NAFA) is a non-profit corporation dedicated to promoting the general welfare of individuals and organizations providing aircraft financing and loans secured by aircraft; to improving the industry's service to the public; and to providing our members with a forum for education and the sharing of information and knowledge to encourage the financing, leasing and insuring of general aviation aircraft. For more information about NAFA, visit www.NAFA.aero.

  • Tracey Cheek posted an article
    AINsight Blog: Tax Reform a Deal Changer for Bizav see more

    NAFA member, David G. Mayer, Partner at Shackelford Law, discusses the Tax Cuts and Jobs Act of 2017.

    If the Tax Cuts and Jobs Act of 2017, H.R.1, aimed to simplify federal taxes in the U.S., it missed the mark for business aviation. However, it did include significant tax benefits and other changes worth considering before a prospective business/taxpayer enters into an aircraft purchase, sale, lease, or management arrangement. Changes include full expensing of aircraft cost until 2023, repeal of like-kind exchanges, an exemption of aircraft management fees from federal excise taxes (FET) and continuing incentives for tax leasing.

    H.R.1 should boost new and preowned aircraft acquisitions and sales because it offers buyers immediate cash savings on purchases of aircraft. It does so by increasing “bonus depreciation” on business aircraft purchases from 50 percent to 100 percent starting Sept. 27, 2017, and ending in 2023. After that, it phases down 20 percent per year to zero.

    A business can, therefore, “fully expense” the aircraft cost in the year the business places the aircraft in service in its “trade or business,” meaning it must use the aircraft for more than 50 percent business use. Previously, bonus depreciation applied only to new aircraft, but H.R.1 extends bonus depreciation to preowned aircraft. If the business does not use the aircraft in its trade or business, this benefit does not apply.

    The cash value of full expensing helps offset the disappointing repeal of IRS section 1031 like-kind exchanges. To illustrate, assume a business purchases a preowned, “replacement aircraft” for $5 million in 2018 and sells its fully depreciated, old, “relinquished aircraft,” for $4 million that same year. The business receives $4 million in ordinary income from the sale of the relinquished aircraft and fully expenses the $5 million purchase price of the replacement aircraft.

    At the new corporate tax rate under H.R.1 of 21 percent, down from a previous 35 percent maximum, the business saves $840,000 in taxes on its $4 million sale. Before H.R.1, it would have deferred the taxable income under IRC section 1031 rather than achieve immediate tax savings. Importantly, as bonus depreciation phases down, income taxes will likely increase on proceeds of aircraft sales that a like-kind exchange could otherwise have continued to defer.

    In a change that provides some relief for business aviation, H.R.1 seems to protect management companies and their customers from FET on “aircraft management services.” This new term refers to a broad range of flight, administrative, and support services provided by management companies to aircraft owners and lessees.

    The key to structuring non-FET management arrangements appears to be simple: only aircraft owners and certain lessees may pay for flights of their managed (owned or leased) aircraft, even if they are not on the flight. This rule should ease the concern about IRS imposition of FET and provide a reliable basis for structuring management and leasing transactions.

    One key feature of H.R.1 arises from what it does not include. H.R.1 omits any reference to “possession, command, and control” (PCC) of aircraft, its controversial Chief Counsel opinion in 2012. There, it sanctioned the imposition of FET on management company fees largely because it found that the management companies exercised PCC.

    The absence of that factor in H.R.1 should insulate owners and certain lessees from IRS intrusion based on specious PCC arguments. Nevertheless, owners, lessees, and other operators should scrutinize existing and new aircraft lease and management documentation to align the provisions closely to applicable provisions in H.R.1.

    Management companies beware: H.R.1 does not change the imposition of FET on parties engaged in “transportation by air” under IRS Section 4261 for commercial operations/charter. Further, H.R.1 does not alleviate the existing ambiguity in categorizing private and commercial operations caused, in part, by the IRS’s persistent disregard of FAR Parts 91 and 135.

    Stated differently, the FAR and IRS apply different standards to identify private and commercial flights. Still, this disconnect should not interfere with the practical applications of H.R.1 or the FARs.

    Finally, H.R.1 alters the tax dynamics for leasing. Businesses already use leases, as lessees, to shift residual value risk to owner-lessors and achieve favorable pricing. Although higher pre-H.R.1 tax rates encouraged tax leasing, H.R.1 should nonetheless support tax leasing by lessees that lack a sufficient tax liability to use full benefit of 100 percent bonus depreciation, loan interest, and state income tax deductions.

    A lessor can help reduce its lessee’s after-tax cost of capital when using the tax benefits available to it on acquiring aircraft. By purchasing an aircraft, a lessor with an adequate tax appetite should use tax benefits efficiently and share its reduced tax burden by lowering rents payable by its lessee.

    H.R.1 should help lift the volume of business aviation transactions, but businesses must properly structure deals to make the most of it. As with any tax or legal matter, always consult your own expert to properly address your personal situation.

    David G. Mayer is a partner in the global Aviation Practice Group at the Shackelford Law Firm in Dallas, which handles worldwide private aircraft matters, including regulatory compliance, tax planning, purchases, sales, leasing and financing, risk management, insurance, aircraft operations, hangar leasing and aircraft renovations. Mayer frequently represents high-wealth individuals and other aircraft owners, flight departments, lessees, borrowers, operators, sellers, purchasers, and managers, as well as lessors and lenders. He can be contacted at dmayer@shackelfordlaw.net, via LinkedIn or by telephone at (214) 780-1306.

    This article was originally published on AINonlnie on January 11, 2018.

     

  • Tracey Cheek posted an article
    Tips To Get The Best From Your Business Jet see more

    NAFA member David Wyndham with Conklin & de Decker offers advice on three things to keep in mind that will help you get the full benefits of a business jet.

    Though it’s impossible to prepare for every situation, it is possible to prepare for things to change and to learn what’s needed for adapting and managing those changes.

    The business aircraft is one of the tools that enables and enhances your ability to act, manage and react to the changes within your business. To get the full benefits of a business aircraft, however, it pays to keep the following three things in mind…

    1. Different Aircraft for Different Missions

    Throughout my career as a consultant, the 100% solution (that is, the aircraft capable of flying all the missions you may need) is most often the costliest. Over the long run, it may also be one of the least effective solutions too.

    To illustrate, I once had a client who was looking at a Mid-size jet.

    • This jet had the runway performance to manage the required short trips into smaller airfields, but with a light passenger load.
    • It had the seats for the handful of longer trips with six or seven people.
    • With full seats, however, its range was limited.

    One larger cabin business jet offered the short runway performance and the range with full seats the client wanted, but the acquisition and operating budget was beyond what the board would approve.

    What proved to be a better fit for the client was a turboprop for the short-range, short-runway trips and a fractional share of a Mid-size jet for the longer-range missions. That Mid-size jet fractional share could also be upgraded to a Large jet for the two or three trips annually that required eight to ten seats.

    It’s vital to remember that owning your business aircraft does not prevent you from using other options (such as charter, jet cards and fractional). These lower utilization alternatives can give you the second aircraft for the few times its needed or expand the capability when occasionally needed.

    2. Re-evaluate Your Options Regularly

    How does the business aircraft you use support your current strategies for managing your business and your time? You will need to regularly re-evaluate your options. Planning is necessary for your company, and that includes forward-planning with regards to the aircraft.

    It may be running nicely and not costing a lot of money to operate currently, but you should not wait for a major expense to arise before evaluating your options.

    • Are you looking to grow into new markets in the next five years?
    • Are you in the Mergers and Acquisitions market?
    • Can the current aircraft support the future company?

    An aircraft replacement can take 12-18 months to plan and execute, especially if you’re acquiring an aircraft that will need to be outfitted to your specifications. It’s advisable to have a written plan for when, and how to upgrade or replace your aircraft. Review the plan and revise it as your company changes, grows or develops into new markets.

    3. Numbers Don’t Tell the Whole Story

    While they can help you make an informed decision, a spreadsheet alone should not make the decision for you. So, what are the other factors that need to be considered in the decision? I’ve had several clients where the optics of owning the aircraft were a concern.

    One was a defense department supplier of technology. My analysis showed them that a Light jet was the most efficient for their travel in terms of cost and speed, but they chose to purchase a slower single-engine turboprop that lacked the non-stop range for about 40% of their trips.

    Their decision was based upon appearances. If the Generals saw the supplier with a turboprop single, they believed it would give the impression of frugality in their business and that their technology solution would also be judged as the cost-effective choice.

    Another client upgrading from a Turboprop chose a Mid-size jet over a Large-Cabin jet. The lower cost Mid-size jet would still meet 85% of their needs but also look appropriate to their shareholders.

    But it’s about more than just optics. Comfort plays a role, too. Another client evaluating Large-Cabin jets preferred the slightly smaller cabin alternative as it offered more cabin width, which felt roomier.

    The costs of the applicable options were similar, but in addition to having the slightly wider cabin his choice also had less range. Nevertheless, as the client was going to spend 400 hours per year on board, this was the right choice for him. Comfort was the deciding factor in this case.

    Business aircraft owners and operators all have slightly different criteria that they use for evaluating subjective qualities like comfort. When evaluating different aircraft, it’s important to decide in advance what criterion are important to you.

    Remember that numbers are very helpful but leave some room for the subjective.

    This article was originally published on AvBuyer on August 23, 2018.

  • Tracey Cheek posted an article
    Highlights of the 5 Year FAA Reauthorization Act see more

    NAFA member, Aircraft Guaranty Corporation, shares highlights of the 5 Year FAA Reauthorization Act.

    There were several proposals put forward for the Federal Aviation Administration (FAA) Reauthorization Act of 2018 (HR 302), but not all of them made it through. While privatizing air traffic control will not be happening, the rules regarding re-registration have once again been changed. The bill also includes an edict that all documents will be digitized soon, along with opening records electronically to the public for the first time. The 462-page bill passed on October 3rd, 2018 contains many provisions, a few of which we’ve highlighted here. There are changes on the horizon, and while the overall effects are uncertain, we can surmise some of the possibilities. 

    Re-registration

    In years past, registration was only required once per owner of the aircraft. In 2010 that changed in an attempt to make FAA records more current, with re-registration required every 3 years.  While this involved more work, the change helped update and maintain more accurate information on aircraft owners. In Section 556 of the 5 Year Reauthorization Act, reregistration is changed to every 7 years, to be enacted within 180 days of the bill passing. We can’t be sure why the FAA is modifying the requirement to less frequent updates once again but are optimistic that the integrity of registration records will not be affected.

    Digitization

    There are already a lot of FAA documents consistently digitized, making some functions involving registration and record searches more efficient. What isn’t electronically maintained is held in the public documents room at the FAA and available to those who have access to that room. Section 546 of the new bill states that everything will be digitized within the next 3 years, including all registry information such as paper documents, microfilm images and photographs, as well as the registry manual, business operations and functions, and all paper-based processes. It’s certainly an earth-friendly endeavor but could produce some complications of its own regarding access and security.

    Public Electronic Database

    Possibly the most significant aspect covered in Section 546 of the bill and happening within 3 years is that the FAA records will be made electronically available to the public. For the first time in history, the general public will be able to view any record and file any document they want at the FAA.  Furthermore, anyone using the public documents room to perform any acts that could have been done with the same efficiency by electronic means, will be charged a fine.  The implications of this switch could be quite far reaching.

    The ability to submit documents electronically might make it more appealing for anyone to do individually, but it does not mean they should. While the FAA is opening their records, they are not changing the rules for submitting documents to them. With the extensive rules in place for filing documents, there is a good chance it won’t be done correctly without industry knowledge of FAA rules and regulations for filing of documents.  

    Furthermore, as the registered owner of the aircraft, an owner trustee is going to want to maintain high standards for creating and maintaining the title to the aircraft.  They would therefore be filing all documents affecting title in accordance with their own standards. It would likely mean an unrecordable document otherwise. They also know What to Look for in Owner Trustee Documents, and would never rely on documents created or filed by someone else. They would also perform any title searches since an outstanding lien or break in the title can be easily missed without an experienced eye, resulting in the need for Clearing Clouded Aircraft Titlesas discussed by Wright Brothers Aircraft Title.

    The Owner Trustee’s Role

    There are many possibilities for error in the registration process, increasing the amount of time and money spent. It’s complicated and requires experts for error-free and timely filings. There are many Benefits to Registering an Aircraft in Trustsince the main role of an owner trustee is to represent the interests of the beneficiary. It is the owner trustee’s responsibility to ensure that all documents filed at the FAA are recorded and kept up-to-date. For an owner trustee then, less frequent re-registration filings do not mean less work since they are regularly in communication with their clients. 

    In sum, the changes coming forward could be both helpful and harmful. We’re hopeful that all will go smoothly for the FAA and progress will continue. The risks involved with registration, title searches and filing documents will not change though, and representation by an experienced owner trustee company is key. 

    One question remaining: what will happen to the public documents room? Will it become a part of a bygone era where people and paper mixed?

    This article was originally published by Aircraft Guaranty Corp. in January 2019.

  • Tracey Cheek posted an article
    What to Ask When Your Aircraft Lease is Expiring see more

    NAFA member, Steve Day, with Global Jet Capital, offers insights on what questions you should ask when your aircraft lease arrangement is coming to an end.  

    1. Should I stay in my current aircraft?

    If you like your aircraft and it continues to fit into your business goals, it may be very easy to extend your lease to retain the same plane.

    The advantages of sticking with your current aircraft are obvious including retaining the same staff and (likely) the same hangar space, no need for additional certifications, and no new maintenance requirements—the list goes on.

    Not only that, you’ll probably be looking at minimal, if any, additional capital outlay as you move into the extended agreement. You may even be able to roll in some additional upgrades and improvements.

    That adds to the peace of mind you’ll have when you stay with something that’s been working well for you.

    A lease extension can also be a useful stop-gap measure if you’re not ready to transition. If you don’t have a plan in place or things are in a state of flux, a lease extension can help you find time to regroup.

    Let’s assume you want to move into a new aircraft, but the model you want won’t be available until a year after your lease expires. A flexible financing partner will work with you to create terms that will accommodate your timeframe and move you into the new lease seamlessly.


    2. How does my transition plan fit into my business goals?

    Perhaps recent tax changes have made you take a closer look at your approach to aviation. Perhaps your current aircraft is no longer meeting your needs. Perhaps you’re expanding into new jurisdictions. There’s certainly no guarantee that your aircraft needs will be identical to what they were when you first signed a lease that’s due to expire soon. But change is rarely a simple proposition.

    Larger aircraft don’t just come with a higher price tag—they also come with different operator certification requirements, maintenance needs, more expensive insurance and higher costs for hangar space.

    Together, those new requirements can be a larger-than-estimated drain on cash flow and time.

    Smaller aircraft, while typically less expensive, can create their own logistical struggles. Even changing where you’ll be keeping your aircraft can be a minefield. A holistic and proactive approach to transition goes a long way towards preventing budgetary surprises, and experienced operating lease providers can be a big help during this process.


    3. Do I have a conceptual transition plan?

    If the answer isn’t yes, you may be in for some turbulence. To leverage the flexibility advantages of leasing, a proactive approach to transition is key. If you don’t start planning early, especially if the aircraft you’re considering could take more than a year to deliver, you might be setting yourself up for problems as the end of the term draws near.

    In the best case scenario, a prepared lessee can move from one aircraft into another with minimal issue and little to no overlap or gaps in lease terms.

    In the worst case scenario, an unprepared lessee can find him or herself without an aircraft due to production availability of new aircraft, or difficulty finding the right plane—which can create huge logistical problems.

    Alternatively, the unprepared lessee might find him or herself paying for, maintaining and managing two aircraft at once while the initial contract wraps up.

    That’s why it’s generally a good idea to start making your transition plan 18 months before the end of the lease if you’re planning on leasing a new aircraft. If you’re planning on leasing a used aircraft, 6-12 months should be sufficient.

     

    4. What obligations will I be responsible for as I move out of this lease?

    Most lease obligations aren’t solely financial or limited to regular lease payments. Obligations to manage, insure, maintain and store the aircraft you’re leasing are important components of lease agreements, and can be a large component of the overall expenses.

    In addition, the return conditions specified in the lease will come with its own obligations – specifically written to protect the expected value of the returned asset.

    If you’re unprepared, you might find yourself blindsided, or underbudgeted as the lease term ends.

    You’ll find that an experienced lessor should be flexible in order to maintain an ongoing relationship, even if it’s a pre-expiration move into a different aircraft. In such cases, it’s usually possible to amend or extend the existing contract as necessary.

    Early termination accommodations also exist, and they don’t necessarily have to come with a hefty penalty. Speak directly with your lessor and clearly articulate your needs and concerns as you plan your transition to find out what may be possible for you.
     

    5. What kind of obligations am I getting into if I transition to a new lease?

    Not all contracts are created equal. Depending on the experience of the lessor and how the agreement is structured, your obligations may be reasonable—or they may be draconian. Lessors that are focused on the corporate aviation market, typically take the time to fully understand their customer’s needs.

    They manage their business models with a long-term view. They’re much more likely to structure transactions that are truly win/win agreements.

    Both financial and non-financial obligations (maintenance, operation, etc.) affect the expenses, so it’s important to fully understand what you’re in for with a new lease and plan accordingly.

    If you’re looking for a flexible operating lease that meets your requirements with minimal bureaucracy, you’ll likely want to consider a partner that has the expertise and market presence that cultivates customized solutions for its clients.

    For more information, visit Global Jet Capital.

    This article was originally published by AvBuyer on May 9, 2018.

  • Tracey Cheek posted an article
    NAFA Announces Geoff Colvin as Keynote Speaker for 48th Annual Meeting see more

    FOR IMMEDIATE RELEASE

    Fort Lauderdale, Fla. – Jan. 15, 2018 - The National Aircraft Finance Association (NAFA) is pleased to announce that Geoff Colvin will be the keynote speaker at their upcoming 48thAnnual Conference, to be held March 3rdthrough March 6th, 2019,at Marriott Harbor Beach in Fort Lauderdale, Florida. Mr. Colvin will be presenting to an audience of aviation industry and finance experts with a global reach; supporting or enabling the financing of general and business aviation aircraft throughout the world. 

    Mr. Colvin is one of the most respected voices in business journalism, with a remarkable understanding of the key issues and trends impacting business today: the global economy; government regulation; the impact of Washington politics/policy on the business environment and the economy; leadership and management; global competitiveness and more. He is an award-winning author, broadcaster, and speaker, and has engaged hundreds of audiences on six continents.

    With his extensive experience as longtime editor and columnist for FORTUNE, top broadcaster on the CBS Radio Network, regular lead moderator of the Fortune Global Forum, and moderator for the International Business Leaders Forum in London, Geoff Colvin is one of America’s sharpest minds on leadership, globalization, wealth creation, the infotech revolution, and related issues. He has appeared on TodayThe O’Reilly FactorGood Morning AmericaCBS This Morning, ABC’s World News, CNN, CNBC, PBS’s Nightly Business Report, among other programs.

    The 48th Annual Meeting of the National Aircraft Financing Association will bring together the most active aircraft lenders in North America and worldwide to network and discuss issues topical to the industry, including: aviation regulatory changes, banking system regulatory changes, updates on new aircraft entering the marketplace, and other issues pertinent to aircraft buyers and their support systems. 

    Mr. Colvin will present “Leading Ahead of What’s Next – The New Rules of Business” for the over 250 attendees. He will address how the world of business is changing in historic and profound ways, with technological disruption, government’s role, and the balance of global economic power shifting massively, helping aviation industry leaders successfully navigate the tumultuous environment.

    For more information about Geoff Colvin, visit http://geoffcolvin.com/speaking/

    About NAFA: 

    The National Aircraft Finance Association (NAFA) is a non-profit corporation dedicated to promoting the general welfare of individuals and organizations providing aircraft financing and loans secured by aircraft; to improving the industry's service to the public; and to providing our members with a forum for education and the sharing of information and knowledge to encourage the financing, leasing and insuring of general aviation aircraft. For more information about NAFA, visit www.NAFA.aero.