industry news

FOR IMMEDIATE RELEASE: June 6, 2023
Contact: Tracey Cheek 
TLC@NAFA.aero 
405.285.7005 

NAFA Elects Andrew Farrant as Second Vice President 

Edgewater, MD — June 6, 2023

The National Aircraft Finance Association (NAFA) is pleased to announce the unanimous election of Andrew Farrant as the Second Vice President. Mr. Farrant joins current Vice President Bryan Byers.  

Farrant is Chief Marketing Officer at Global Jet Capital and brings a wealth of experience and expertise to NAFA. He is committed to advancing the industry and serving NAFA members’ needs.  

“I am very excited that Andrew has been elected to a Vice President role with NAFA,” said Ed Medici, NAFA President. “I’m appreciative of the energy, time and advice he has already given NAFA, and I look forward to working with him over the next two years to make NAFA the premier aviation finance industry association.”  

Farrant expressed his gratitude and eagerness to contribute to NAFA’s mission. “I’m honored to accept this nomination, and I’m looking forward to working with Ed, the balance of the board and our membership as we look to build on the great platform created over the past 50-plus years,” said Farrant. 

For more information about NAFA and a full list of board members, visit www.nafa.aero. 

About NAFA: The National Aircraft Finance Association (NAFA) is a professional association that has been promoting the general welfare of aircraft finance for 50 years. Our network of members is comprised of lenders and product service providers who work together to finance general and business aviation aircraft. NAFA sets the standard for best practices in aviation finance by educating its members on the most up-to-date industry trends and best practices. Government legislation, market influences, and industry insights allow member companies to provide the highest quality services the industry has to offer. 

In September 2022, the Canadian government passed the Select Luxury Items Tax Act, which imposes a 10% tax on aircraft valued at $100,000 or more. This tax can potentially impact the large Canadian business aviation industry, including OEMs, buyers, sellers, lenders, dealers and the supply chain of the business aviation industry.   

 Luxury taxes are controversial because they directly affect an individual’s purchasing power. As the Canadian government aims to increase its tax base, this article will discuss how the new luxury tax impacts those involved in aircraft transactions and the aviation business industry.   
 

What is the Select Luxury Items Tax Act?    

The Canadian government passed the Select Luxury Items Tax Act, which levies a 10% tax on selling and importing aircraft worth more than $100,000. The new tax went into effect on September 1, 2022. The Act also applies to luxury cars over $100,000 and boats over $250,000. 

The legislation applies to “subject aircraft,” meaning an airplane, glider or helicopter. The aircraft must be manufactured after 2018. There are a few exemptions, including: 

• aircraft designed and equipped for military activities

• aircraft equipped for the carriage of goods only 

• aircraft registered with a government before September 2022, provided that a user of the aircraft has possession before this date   

The luxury tax also does not apply to the sale of a subject aircraft priced above the price threshold where a purchaser and a vendor have entered into a written agreement for the sale of the subject aircraft before 2022 in the course of the vendor’s business of selling subject aircraft equipped for military activities or solely for carrying goods.  

A manufacturer, wholesaler, retailer or importer is required to register with the Canada Revenue Agency (CRA) under the Select Luxury Items Tax Act if you are, and in the course of your business activities, you sell or import aircraft priced over $100,000.   

Those that qualify are required to apply to register with the CRA as a registered vendor of aircraft by the earlier of:   

• the day of the first sale of an aircraft  

• the day of the first importation of an aircraft  

How does the new tax affect aviation finance?     

This tax can potentially impact the significant business aviation industry in Canada. According to the International Trade Administration, Canada is still one of the world’s largest for engineering and manufacturing in aerospace. Canada is the number one civil flight simulator producer, third in civil engine production and fourth in civil aircraft production. In addition, about 80% of Canada’s aerospace sector is civil-oriented, and 20% is military oriented.    

Because this luxury tax is new, it is hard to determine the exact impact on the Canadian business aviation industry. However, according to a research report by Jacques Roy, professor at HEC Montreal Business School, the luxury tax on aircraft may reduce federal income by 29.9 million a year and lead to at least 2,000 direct jobs lost. 

This tax can impact the large Canadian aerospace industry in several ways.     

First, sellers will likely pass the 10% tax on to the buyer. Therefore, Canadian buyers may look for solutions to avoid the tax, but beware there may be hefty fines if not compliant. 

Lessors may also be impacted if a lessee defaults on an aircraft lease and the lessor is forced to sell the aircraft at a 10% higher price. Sellers who add 10% to an aircraft’s sale price may push the market value for a specific aircraft, which affects the number of potential buyers who would consider that aircraft.     

Secondly, Roy’s report estimated a loss of nearly 540 million for aviation companies because potential buyers will begin looking for alternatives, such as basing aircraft in the US or waiting to see if the details of the law’s applications changed. 

A report by the Parliamentary Budget Officer (PBO) estimated the government would receive nine million in new revenue from the aviation sector, which accounts for less than ten percent of the new revenue gain (would mostly come from auto sales). The report also estimated that the tax might reduce sales of autos, boats and planes by more than 600 million a year.    

In addition, since the tax only applies to aircraft manufactured after 2018, an older aircraft may be more appealing to a buyer, impacting the demand for new aircraft, manufacturers and the labor market. This also counters the government’s efforts to reduce carbon emissions by manufacturing more fuel-efficient planes.  

In a letter written by Anthony Norejko, President and CEO of the Canadian Business Aviation Association (CBAA) to Chrystia Freeland, Canada’s Minister of Finance, Norejko said, “the imposition of a luxury tax on aircraft in Canada will have negative consequences for Canada’s aviation and aerospace sectors, affecting job creation, business competitiveness, and importantly, the ability of operators to adopt the cleanest and greenest aircraft, impeding progress related to achieving Canada’s net-zero goals.”   
 

Moving forward  

CBAA leaders are encouraging the Canadian government to understand the luxury tax’s full impact on jobs and the economy. They suggest changes in the law, such as increasing the sales price threshold and pausing the luxury tax until the Department of Finance can conduct an economic analysis. 

Since the new tax is still in effect, it is important to analyze how it will affect any aircraft transaction. The Canadian Revenue Agency is frequently updating the Luxury Tax specifics, so it is best to consult with a tax professional to determine if you are liable for the new tax and how the purchase of aircraft in Canada will affect your tax obligations.   

In addition, each aircraft lender may approach the Luxury Tax differently, so it’s important to speak with your lender when there's a Canadian entity involved to discuss how the additional tax will be handled in the transaction.   
  

Conclusion    

Similar to the new Canadian Luxury tax, The United States enacted a 10% federal luxury tax in 1991 but repealed it in 1993. Many see luxury taxes as damaging for luxury goods and believe they do not provide enough revenue to outweigh the damaging effects.    

Although we cannot predict the sustainability of the Canadian Luxury Tax, experts agree this will affect the Canadian aviation industry while it is still enforced. To understand how this tax will affect you, the National Aircraft Finance Association (NAFA) recommends speaking with a professional lender and tax professional before engaging in an aircraft transaction in Canada.     

For more information about the Select Luxury Items Tax, please see the website: https://laws.justice.gc.ca/eng/acts/S-8.35/.   

Media Contact:
Aimee Talbert Nardini, Global Jet Capital
561.212.1594 [mobile]
atalbertnardini@globaljetcapital.com

Global Jet Capital Publishes Annual Business Jet Market Forecast

Five-Year Outlook Points to Steady Growth After Record-Setting Demand Cools
Forecast Projects $195 Billion in Total Transaction Volume Over the Next 5 Years

Danbury, CT – May 22, 2023 – Global Jet Capital, a global leader in financial solutions for business aircraft, released its annual Business Jet Market Forecast today. In the updated report, the company projects continued growth for the next five years. The forecast also contains insights and projections for the business aviation market through 2027, including breakdowns of new deliveries and pre-owned transactions. The high level of detail in the report is based on outputs generated by Global Jet Capital’s proprietary transaction forecast model.

“As expected, we have seen a leveling off from the unprecedented demand that our industry experienced post-pandemic, but looking ahead, we see a steady growth pattern for both new and pre-owned aircraft. Most OEMs have strong backlogs and should see improvements in supply-chain challenges that limited deliveries in 2022 and so far in 2023. Pre-owned transactions continue to return to rates more in line with historical trends and are expected to pick up in 2024 and beyond to reflect increasing demand from new aircraft models,” Andrew Farrant, Chief Marketing Officer, stated.

Based on its econometric top-down model, Global Jet Capital projects $195 billion in total transaction volume of new and pre-owned transactions between 2023 and 2027, with a compound annual growth rate of 3.1 percent during that time.

In the report, the company forecasts that deliveries of all size categories will increase during the period, but heavy long-range jet demand should increase at faster rates than other sizes as demand favors more international travel. North America is expected to remain the largest business jet market over the next five years, with Europe remaining the second largest market.  Latin America is also forecasted to continue its important pre-owned market interest.

Global Jet Capital believes that the projections contained within the forecast are a useful tool for individuals and organizations navigating the business aircraft industry. To download the Market Forecast, visit: https://www.globaljetcapital.com/forecast-2023

About Global Jet Capital

With more than $3.5 billion in originations, Global Jet Capital provides financing solutions for the business aircraft market. The Global Jet Capital management team has served the business aircraft industry for a combined 250-plus years and has completed thousands of aircraft transactions. The Company has the expertise, financial strength, industry relationships and infrastructure necessary to offer a variety of flexible financing solutions at the speed the market requires. Visit www.globaljetcapital.com to learn more.

Planning to finance your next aircraft? What are the restrictions that lenders may impose on the operation of your aircraft? Gerrard Cowan, with AvBuyer, asks the experts, outlining how such stipulations can serve the bank’s and borrower’s best interests simultaneously.

While many aircraft owners finance the purchase of their aircraft, financing can impose restrictions and costs that operators should carefully consider before going ahead with a deal, though such stipulations could also offer significant benefits to the owner.

Mike Smith is President of Scope Aircraft Finance and a long-time member of the National Aircraft Finance Association (NAFA). He explains that every lending institution has its own process and approach to aircraft lending.

“I like the word ‘guidelines’ instead of ‘restrictions’ because an experienced lender will design a loan structure to match the borrower needs while keeping in line with the lending institution’s risk profile,” he says.

In a good lending relationship, both the borrower and lender will understand what usage is allowed per the loan terms well in advance of the loan closing, Smith adds.

“Some examples of guidelines could be maximum hours flown per year and guidelines around usage of the aircraft in charter operations,” he illustrates. “Each lending institution has its own parameters related to aircraft size, age, and more, and the associated ‘guidelines’ tied to the individual aircraft will vary among institutions.”

Read full article here.

This article was originally published by AvBuyer on May 11, 2023.

The private aviation industry is constantly evolving with changes in demand, technology and market trends shaping the industry. One such trend observed in recent years is the increased interest of owners and operators to increase the lifespan of an aircraft. 

The average life expectancy of an aircraft is between 25 to 30 years, but in today's market, where supply is low, and demand is high, people are continuing to fly their aircraft for five to ten years further. In the past, the market may have had three to four owners in an aircraft's lifetime, but now it is seeing potential for five to six. As a result, people have been shifting away from new aircraft due to lack of availability and considering more mid to late-term planes. 

Current Market Trends 

In a typical market, if 8 to 10% of the available operating fleet is for sale on the market, the market is in a supply/demand equilibrium. If that figure exceeds 10%, aircraft prices will see downward pressure and faster market depreciation. Over the past two years, aircraft pricing has increased across the board due to low supply.  

Peak demand post-COVID-19 saw about 2.5% of the operating business jet fleet available for sale. Since COVID-19, the prices and demand for aircraft have remained high. With fewer options, people push more life out of their plane, and new buyers are open to buying pre-owned, mid to late-term models.   
 

Several factors also contribute to the trend of purchasing mid to late-term aircraft, including:  
 

• The wait for new aircraft could be two years or more, so people are pursuing the used aircraft market instead of waiting.  

• Market acceptance for older aircraft is growing, broadening the customer base. 

• Older aircraft sometimes have unique features that owners and operators like (pilot preference, parts availability, and familiar maintenance requirements). 

• Greater demand for rental and exchange engines for older model planes indicates that people are trying to gain more life from their aircraft and run their aviation business more efficiently. 

Things to keep in mind when considering a mid to late term aircraft   

When thinking of purchasing an older aircraft or extending the life of one, people need to consider certain factors. “When considering purchasing an aircraft that is mid-term (15 to 20 years) or late-term (25 to 30 years and beyond), it is like dealing with a different product entirely rather than one straight off of the production line,” said Nathan Schnitzlein, Director of Strategy at JSSI Parts & Leasing.   

New entrants into the market are also looking for the best and most cost-effective way to explore business aviation, and operating costs are a large part of the decision-making process. Schnitzlein explains that the operating costs for an aircraft will have peaks and valleys throughout its life due to large airframe inspections and engine shop visits, and these costs vary depending on what point of the lifecycle the aircraft is in.    

Because operating costs are one of the more important elements in considering an aircraft, and these costs trend up with older aircraft, potential buyers should consider the following when considering purchasing a mid to late-term plane: 

1. The plane’s maintenance records. Tasks in the Airplane Maintenance Program (AMP) can become more expensive as the plane ages, so it's essential to check with the maintenance schedule to see if any checks are due or upcoming. In addition, there is currently a shortage of parts and maintenance services, which may slow the aircraft from receiving the required service.  

2. The engine maintenance program. If the aircraft is not covered on an engine maintenance program, what do the forecasted costs look like? Will a buy in or pro rata enrollment help mitigate future expenses? As aircraft increase in total time and cycles. Life Limited Component (LLC) coverage is important to consider.  

3. The general condition of the airplane and where the aircraft has been operating. For example, the airframe should be inspected for any corrosion due to the elements. Where does the airframe stand in terms of heavy checks and landing gear inspections? A Heavy Maintenance visit (HMV), also known as a D or C check, occurs every six to twelve years, depending on the make and model. These can be an expensive undertaking if one is due. 

4. The aircraft's operating history. It's important to obtain updated records that reflect everything accurately, including how the plane has been operating, such as if it was a charter plane or for personal use. Additionally, understanding where and how an older plane was registered and operated can increase future maintenance costs. For example, if a plane was registered as a Part 91 for the life of the plane and then a new operator wants to register it as a Part 135, the cost of switching is high. 

5. The market liquidity of a particular aircraft. Certain makes and models are always in high demand in the aftermarket. Still, if it's a unique plane, reselling it may be more challenging. If owners and operators look to buy a plane later in life, they should consider whether they want to fly it until its retirement or decide to keep the resale window open. 

6. Total time flown, not just the age of the aircraft. 

7. How will the plane be financed? Older models may require additional financing requirements compared to newer ones. 

Looking Forward 

Heading into the second quarter of 2023, the market is trending back to equilibrium (close to 6%) across all business jets. For some aircraft fleet types, the percentage available for sale has surpassed 10%, and price softening is expected in the near future. For others, that percentage has stayed below 5% and continues to hold strong value among typical charter operating types of aircraft.   

The private aviation industry is constantly changing. The trends discussed above are just a few ways the industry is evolving toward longer lifespans for aircraft, extending the usage of popular models and demanding more rental engines. As the industry adapts to meet the needs of consumers, we can expect to see new trends emerge that will shape the future of private aviation.   

Purchasing an older aircraft can be an attractive option for buyers as it can be less expensive than buying a newer model; however, potential buyers should consider the operating costs that may accompany an older plane. Those interested in a mid to late model should consider several factors before purchasing, including the operating costs, maintenance records, engine maintenance program general condition and operating history of the aircraft. 

About Jet Support Services, Inc. (JSSI) 

For over 30 years, Jet Support Services, Inc. (JSSI) has been the leading independent provider of maintenance support and financial services to the business aviation industry. JSSI offers worldwide support for aircraft owners, operators, and MROs through its Maintenance Programs, Parts and Leasing, Maintenance Software (Traxxall and SierraTrax), Advisory Services and Conklin & de Decker, which provides data and analysis tools. 

About NAFA 

The National Aircraft Finance Association (NAFA) is a professional association that has been promoting the general welfare of aircraft finance for 50 years. Our network of members comprises lenders and product service providers who work together to finance general and business aviation aircraft. NAFA sets the standard for best practices in aviation finance by educating its members on the most up-to-date industry trends and best practices. Government legislation, market influences and industry insights allow member companies to provide the highest quality services the industry has to offer. 

Edgewater, MD — May 5, 2023  National Aircraft Finance Association (NAFA) is pleased to announce the election of Ed Medici as the new NAFA President. NAFA also elected four new board members: Megha Bhatia, Vice President of Sales and Marketing for business aviation at Rolls-Royce; Jack Gilchrist, Founding Director and Shareholder of Gilchrist Aviation Law; Isabelle Lafond, AVP, Aviation Finance at LBC Capital, Inc., and Scott McCreary, Vice President at McAfee & Taft. 

“I am pleased to serve NAFA as the new President, replacing Jim Blessing, who served for four years,” said Medici. “We also welcome Megha, Jack, Isabelle and Scott to the NAFA Board. The arrival of these new members to the board of directors adds a fresh perspective. We will value the unique skills, diverse perspectives and unwavering commitment they will undoubtedly bring to grow the overall quality of NAFA.” 

Outgoing board members include J.C. Ferrer of Holland & Knight, Cathy Nyen of Cirrus Aircraft and Lee Rohde of Essex Aviation. 

About Ed Medici: 

Edward Medici is Managing Director of Capital Markets for Banc of America Global Corporate Aircraft Finance (GCAF) at Bank of America Merrill Lynch. Based in Providence, Rhode Island, Medici is responsible for managing and developing strategic investor and trading relationships, overseeing sales of transactions to third-party investors and supporting GCAF’s activities across its global platform. 

Medici began his work experience in contracts and has been a part of Banc of America Leasing’s Capital Markets group for general equipment and corporate aircraft transactions since 1998. He earned a B.A. from Connecticut College and J. D. from Roger Williams School of Law and is a member of the Rhode Island Bar. 

About Megha Bhatia: 

Megha Bhatia is Vice President of Sales & Marketing for the dedicated business aviation organization at Rolls-Royce. Before her current position, Bhatia specialized for more than a decade in sales and strategy with Rolls-Royce.  

Bhatia’s passion for technology combined with a degree in Aerospace Engineering and a Master of Business from Embry-Riddle University has enabled her to drive change within the aerospace industry. 

During her time in business aviation, she launched CorporateCare® Enhanced, the first aftermarket program to expand its premier comprehensive protection for the full powerplant, including engine & nacelle.  

About Jack Gilchrist: 

Jack Gilchrist is the Founding Director and Shareholder of Gilchrist Aviation Law. He serves as Special Counsel, representing clients involved in all areas of the aviation industry. Since 1989, Gilchrist has specifically focused his career on aviation transactions involving every current structure of aircraft, including engines, propellers and spare parts. 

Gilchrist has counseled clients around the world in aircraft transactions, including many of the major air carriers, aircraft and engine leasing companies, fractional ownership programs, air cargo companies, corporations, banks and other lending institutions. He also works closely with aircraft brokers, dealers and manufacturers.  

About Isabelle Lafond: 

Isabelle Lafond has served as Assistant Vice President Aviation at LBC Capital Inc. for over four years. Previously, she was Financing Manager at Export Development Canada and has spent her career in the aviation business industry.  

About Scott McCreary: 

As Vice President at McAfee & Taft, Scott McCreary represents local, national and international clients in connection with matters involving the buying, selling, leasing and financing of aircraft. His practice is primarily focused on matters relating to the Cape Town Convention, the Federal Aviation Act and the FAA Aircraft Registry, such as aircraft title, registration, finance and leasing law, as well as regulatory issues relating to the operation of aircraft under Part 91 of the Federal Aviation Regulations. 

McCreary is a frequent speaker at aviation conferences in the United States and abroad and has presented at venues such as the Strategic Research Institute’s Annual FAA Aircraft Registration, Lien & Securities Interest Conference, the Federal Bar Association’s Aircraft Title, Registration, Finance and Leasing Law Conference and more.  

Current officers: 

• Ed Medici: President 

• Bryan Byers: Vice President 

• Tobias Kleitman: Treasurer 

• Theresa Myers: Secretary 

• Dave Warner: General Counsel 

• Jim Blessing: Ex-Officio 
   

For more information about NAFA and to see a full list of board members, visit www.nafa.aero.   

About NAFA: 
The National Aircraft Finance Association (NAFA) is a professional association that has been promoting the general welfare of aircraft finance for 50 years. Our network of members is comprised of lenders and product service providers who work together to finance general and business aviation aircraft. NAFA sets the standard for best practices in aviation finance by educating its members on the most up-to-date industry trends and best practices. Government legislation, market influences, and industry insights allow member companies to provide the highest quality services the industry has to offer. 

FOR IMMEDIATE RELEASE:  4 May 2023            

Contact: Tracey Cheek  
tlc@nafa.aero  
405.850.1292  

Edgewater, MD — 22 April 2023  Charlie Sauter, Executive Vice President at Scope Aircraft Finance, was honored with the NAFA Lifetime Achievement Award at NAFA’s 51st Annual Conference held in Key Largo, Florida, on April 22. This recognition is the highest honor presented by NAFA and is given to individuals who have demonstrated exceptional loyalty and service to the association. 

Sauter’s contribution to NAFA has been longstanding, having served twice as a NAFA board member. He has been dedicated to promoting the growth of NAFA and the aviation finance business.  

“The Lifetime Achievement Award is rarely given due to its high standards and eligibility criteria, which is a testament to Charlie’s exceptional contribution to the association,” said Ed Medici, current NAFA President. "Charlie has built a reputation of character and a strong commitment to integrity throughout his service to NAFA. He has been a pillar of support, promoting NAFA through its current growth.”  

The NAFA Lifetime Achievement award underscores the importance of the association’s values. Sauter’s legacy will undoubtedly inspire future generations of aviation finance professionals to continue to drive the industry forward.   

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 the website at www. NAFA.aero.   

NAFA Welcomes New Member: Stratus Financial

National Aircraft Finance Association (NAFA) is pleased to announce that Stratus Financial has recently joined its professional network of aviation lenders. Stratus Financial provides student loans to aspiring aviators at all levels of experience and training. 

“NAFA members proudly finance, support or enable the financing of general and business aviation aircraft throughout the world, and we are happy to add Stratus Financial to our association,” said Ed Medici, President of NAFA. 

About Stratus Financial: 

Stratus Financial develops lending products for pilots at all stages of their careers. Through partnering with flight schools across the United States, Stratus Financial provides financing solutions to aspiring pilots for efficient, hassle-free underwriting. 

Stratus Financial was founded in 2020 by FAA-certificated flight and ground instructors with decades of experience in the aviation industry.  

Stratus brings together the student and school experience with several programs designed by flight schools. A great relationship with flight schools is critical to developing Stratus’ lending products for students and schools to achieve their goals.   

Stratus has a variety of loan products with fixed and variable rates available to flight students. Loans can cover all things needed for flight training. 

For more information, visit https://stratus.finance/. 

About NAFA:  

The National Aircraft Finance Association (NAFA) is a professional association that has been promoting the general welfare of aircraft finance for 50 years. Our network of members is comprised of lenders and product service providers who work together to finance general and business aviation aircraft. NAFA sets the standard for best practices in aviation finance by educating its members with the most up-to-date industry trends and best practices. Government legislation, market influences and industry insights allow member companies to provide the highest quality services the industry has to offer. 

NAFA Welcomes New Member: Verijet 

National Aircraft Finance Association (NAFA) is pleased to announce that Verijet has recently joined its network of aviation professionals. Verijet strives to make private jet charter flights more convenient, economical, safer and sustainable for all who wish to or need to fly.   

“NAFA members form a network of aviation finance services who proudly finance, support or enable the financing of general and business aviation aircraft throughout the world, and we are happy to add Verijet to our association,” said Ed Medici, President of NAFA.  

About Verijet: 

Verijet is a part 135 private charter jet operator with a rapidly growing fleet of single-engine jets that are luxurious, safe and highly convenient for private travelers. Verijet saves valuable time by utilizing smaller, local airports closer to the passenger's origination and desired destination and flying more directly point-to-point. Verijet supplies short-haul regional flights (less than seven hundred miles) covering the Southeast, Northeast, and Western U.S. 

Verijet supports protecting the earth, sustainability efforts and saving the availability and convenience of private aviation for future generations. Partnering with 4AIR, a company dedicated to developing and expanding sustainability programs, monitoring and compliance and sustainable fuel management, all Verijet flights are 100% carbon neutral.  

“Our goal is to decarbonize short-haul regional aviation while making it more accessible, economical and time effective for the passengers,” said founders Richard and Allison Kane. “Our planet and time are among our most precious commodities, and we're working on conserving both one flight at a time.” 

Founded in 2019, Florida-based Verijet is a technology company focused on air mobility – revolutionizing private aviation through proprietary AI and large-scale computing combined with the most innovative, advanced and safest jet in the air today — the SF50 Vision Jet built by Cirrus Aircraft.  

For more information on Verijet, visit http://www.verijet.com/. 

About NAFA:    

The National Aircraft Finance Association (NAFA) is a professional association that has been promoting the general welfare of aircraft finance for 50 years. Our network of members is comprised of lenders and product service providers who work together to finance general and business aviation aircraft. NAFA sets the standard for best practices in aviation finance by educating its members on the most up-to-date industry trends and best practices. Government legislation, market influences and industry insights allow member companies to provide the highest quality services the industry has to offer. 

NAFA Member, David G. Mayer, Partner at Shackelford, Bowen, McKinley & Norton, LLP, discusses the preowned market.

The preowned market for business jets is trending away from the near-manic demand and harsh seller terms we have experienced over the last few years. Ostensibly driven by the pandemic fears and the exuberance of first-time buyers, purchase prices skyrocketed and enabled sellers to restrict the due diligence of purchasers who often willingly accepted severe contract limitations to close an aircraft deal.

Despite and perhaps because of these extreme market conditions, the momentum in the preowned aircraft sales market remains strong and resilient—but not impervious—to inexorable headwinds of high inflation, rising interest rates, global economic and geopolitical risks, stock market wealth contraction, and incessant discussion of a recession.

Amid these strong market forces and slightly rising inventory of used jets for sale, pricing and contractual terms in aircraft purchase and sale agreements (APAs) appear to be rebalancing roughly to pre-pandemic norms. This comes even as some sellers resist lowering their sales prices or easing back on negotiating four major issues in APAs: hard and soft deals; aircraft delivery condition; inspection scope; and defaults and remedies for purchasers and sellers.

Read full article here

This article was originally published by AINonline on March 10, 2023.

NAFA member, AeroAsset, shares their Heli Market Trends 2022 Annual Reports.

Single Engine Edition

Key Findings

–

TRANSACTION VOLUME DOWN, SUPPLY DECREASE SLOWS

·      Retail sales decreased 12% 2022 vs 2021 (YOY)

·      Supply for sale declined 40% year over year (YOY) but rose in the last semester of 2022

·      Absorption rate decreased 30% YOY, to 5 months of supply at current trade levels

ROBUST DEMAND FOR SINGLES IN NORTH AMERICA

·      North American buyers accounted for 2/3rd of all transactions in 2022

·      Retail transactions to Europe dropped 40% YOY

·      North American supply trippled Q4 22 vs Q2 22

MARKET PERFORMANCE BY CONFIGURATION

·      VIP singles accounted for 60% of all transactions in 2022

·      EMS supply remains at all time low

·      Utility supply for sale dropped 30% YOY

LIQUIDITY LINEUP

·      The most liquid preowned market in 2022 was the Airbus AS350 B3/B3e/H125, followed by the Bell 407/GX/P/I and the Airbus EC130 B4/H130. All three models boast 5 months of supply at 2022 trade levels

·      The least liquid market, the Leonardo AW119, ranked last with a nonetheless strong absorption rate of 10 months

Twin Engine Edition

Key Findings

–

TRANSACTIONS DOWN SLIGHTLY, SUPPLY DROP SLOWS

·      Retail sales volume decreased 4% 2022 vs. 2021 (YOY).

·      Supply for sale declined 11% year over year (YOY).

·      Absorption rate at lowest point in 4 years.

WEIGHT CLASS PERFORMANCE

·      Supply for sale continued to decrease in all asset classes through 2022.

·      Medium & heavy twin engine retail sales were stable YOY.

·      Light twin retail sales declined 10% over same period.

MARKET PERFORMANCE BY CONFIGURATION

·      VIP singles accounted for 60% of all transactions in 2022

·      EMS supply remains at all time low

·      Utility supply for sale dropped 30% YOY

REGIONS & YOM

·      North America & Europe accounted for 73% of sales in 2022.

·      Europe saw a 20% decrease in transaction volume YOY.

·      Sales of 20 yr+ aircraft experienced a strong resurgence YOY.

LIQUIDITY LINEUP

·      The best performing preowned twin engine market in 2022 was the Airbus EC/H135, followed by the EC/H145 and the Sikorsky S76C+/C++.

·      The worst performing preowned twin markets were the Leonardo AW169 and Sikorsky S76D markets, with no retail sales last year.

·      The biggest drop in the lineup was the Bell 429, ranked #2 in 2021 and 10th in 2022.

Full Heli Market Trends reports available at:

Single engine edition https://www.aeroasset.com/en/report-download/2022-Singles

Twin engine edition https://www.aeroasset.com/en/report-download/2022-Twins

These reports were originally published by AeroAsset.

The business aviation industry is “between a rock and a hard place” in Europe because environmental pressures are increasing and yet regulatory roadblocks are preventing progress, according to NAFA member and General Aviation Manufacturers Association (GAMA) president and CEO Pete Bunce.

“A lot of the news has not been good as far as the approach of business aviation over there [in Europe],” Bunce said during his association’s annual State of the Industry press conference on Wednesday, referring to environmental activism activities such as the recent interruption of the start of the European Business Aviation Association’s AIROPS23 Conference in Brussels. Activists blocked the entrance to the ExecuJet FBO terminal at Brussels airport and also barged into the AIROPS23 event.

Bunce stressed the importance of the industry being able to move forward on sustainable initiatives, including bringing new technologies to market. He stressed that the availability of sustainable aviation fuel (SAF) is becoming critically important.

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This article was originally published in AINonline on February 24, 2023.

Michael Cole, ATP
Senior Vice President 
Northwest Bank 
Business Aviation Finance Group 
michael.cole@northwest.com 
630.399.0826 

NAFA Welcomes New Member: Northwest Bank 

National Aircraft Finance Association (NAFA) is pleased to announce that Northwest Bank has recently joined its network of aviation professionals. Northwest Bank’s Aviation Finance Group offers the aviation industry a reliable, high-quality alternative to current financing sources.   

“NAFA members proudly finance, support or enable the financing of general and business aviation aircraft throughout the world, and we are happy to add Northwest Bank to our association,” said Jim Blessing, President of NAFA.  

About Northwest Bank: 

Northwest Bank’s Business Aviation Finance Group offers tailored financial solutions to meet the needs of prospective customers. The Business Aviation Finance Group supports loan sizes up to $50 million. 

The Northwest Bank Business Aviation Finance Group has over a combined 100 years of business aircraft finance sales and underwriting experience. Positioned as an industry specialist, the group offers a high level of practical experience and know-how in providing custom financial solutions to clients. 

The Business Aviation Finance Group offers the aviation industry a reliable, high-quality alternative to the current financing sources.  

Northwest Aviation Finance Group is backed by Northwest Bank, a Northwest Bancshares, Inc. subsidiary, traded on the NASDAQ: NWBI.  

For more information, visit: www.northwest.com.  

About NAFA:    

The National Aircraft Finance Association (NAFA) is a professional association that has been promoting the general welfare of aircraft finance for 50 years. Our network of members is comprised of lenders and product service providers who work together to finance general and business aviation aircraft. NAFA sets the standard for best practices in aviation finance by educating its members on the most up-to-date industry trends and best practices. Government legislation, market influences and industry insights allow member companies to provide the highest quality services the industry has to offer.