Lee Rohde

  • NAFA Administrator posted an article
    Your Private Air Transportation Options – Making An Informed Decision and Executing It Correctly see more

    NAFA member, Anthony Kioussis with Asset Insight, hosts their latest podcast "Aircraft Ownership Lifecycle Podcast" featuring NAFA member, Lee Rohde President and CEO of Essex Aviation Group.  

    Lee Rohde discusses how the consulting company he founded advises aviation-related entities on a wide range of aircraft acquisition, strategic planning, financial, operational and management matters. Specifically, Lee covers:

    • Private Air Transportation options – what should prospective users consider in reviewing their options for meeting their travel requirements?
    • In the event an entity determines they want to acquire an aircraft, how should they go about identifying the best model to meet their travel requirements?
    • What factors have the greatest influence on the decision to acquire a new vs. a pre-owned aircraft?
    • The issues and complexities associated with refurbishing or upgrading a pre-owned aircraft.
    • The expertise an entity should secure if they are planning an aircraft acquisition.
    • The factors to be considered when determining an Offer Price for an aircraft.
    • What a pre-purchase inspection entails and why it is such an important part of acquisition process.

    Listen to the podcast here.  

    This podcast was originally published by Asset Insight.

  • NAFA Administrator posted an article
    Webinar: Ready to Buy & Fly? see more

    Educational Webinar Covers Best Practices & Acquisition Strategies Teaming Strategies

    Are you thinking about purchasing an aircraft? It can be an overwhelming experience, especially if you’re a first-time buyer, but there are experienced industry professionals who are ready to help.

    In a free educational webinar on May 28 2020, Essex Aviation President and CEO Lee Rohde joined GKG Law Principal Chris Younger to talk about everything you need to know when it comes to purchasing an aircraft.

    The webinar, Ready to Buy & Fly? Best Practices & Teaming Strategies for a Successful Aircraft Acquisition, includes resources, tips, and information on the following topics:

    • Steps to a successful aircraft transaction (including a week-by-week timeline!)
    • The necessary parties you should include when it comes to purchasing a plane, including:
      • CFO, CEO, and the COO
      • Corporate general counsel
      • An aircraft technical consultant
      • Commercial lender
      • And many more
    • Key closing checklist items
    • Potential post-closing issues
    • Net operating loss (NOL) carrybacks and The Coronavirus Aid, Relief, and Economic Security (CARES) Act

    Essex Aviation handles everything from new and pre-owned aircraft acquisitions to private jet charter counseling and membership. GKG Law works with purchase and sale transactions, aircraft ownership, federal and state tax planning, aircraft ownership trusts, and more.

    To find out more about purchasing an aircraft or to ask our industry experts any questions, contact Essex Aviation today.

    View Webinar Here

    This webinar hosted by Essex Aviation and GKG Law originally aired on May 28, 2020.

     

  • Tracey Cheek posted an article
    Finding the Right Lender to Finance a Private Aircraft Purchase see more

    NAFA member, Lee Rohde, President and CEO of Essex Aviation, discusses finding the right lender when financing a private jet purchase.

    It is a truth universally acknowledged that private aircraft are expensive. Even those exploring part-time ownership options enter their search knowing that it will require a significant upfront investment. But for frequent fliers with the means to afford it, private aviation is the obvious choice.

    Before taking the first steps toward private aircraft ownership, potential buyers should take the time to carefully evaluate all of the financing options available to them.

    Something to Consider

    Before deciding which financing option to pursue, buyers should consider whether they want to contact lenders directly — a process that typically involves researching lenders, requesting and reviewing lender proposals and assembling a loan due diligence package — or to work with a third-party aviation consultant or aircraft finance broker. Although most high-net-worth individuals have a finance team capable of handling these responsibilities, individuals on the mid-to-lower end of the market might find it useful to partner with an aviation consultant or aircraft finance broker because they have the necessary industry relationships to simplify the financing process and to connect with the most appropriate lender candidates depending upon the buyer’s needs and requirements.

    Finding a Lender

    When seeking financing for a private aircraft purchase, buyers have two main options: traditional banks and non-banking aircraft financing lenders. In most cases, high-net-worth individuals will elect to first work with their existing bank — that way, the buyer can take advantage of their existing business relationship with the bank, which already has a comprehensive understanding of their financial situation.

    If a buyer’s bank is unable to finance the purchase, the next option would be to contact one of the major financial institutions that has an established aircraft finance group. These financial institutions manage a large aircraft portfolio and would be willing to work with a buyer to finance the aircraft even if the buyer does not have an existing relationship with the institution.

    The benefit to this option is that the bank already has an established aircraft financing team capable of working with the buyer to obtain the necessary information to evaluate the loan. 

    The downside to this option is that the buyer will need to prepare and provide the bank with a full package of information on the aircraft, as well as a full set of financial documents and disclosures for the lender to provide a formal proposal. 

    The third option is to finance the aircraft purchase through a non-banking aviation lender. There are decidedly fewer non-banking aviation lenders in the market than there are banking lenders. Currently, there are a few major non-bank lenders in the market that actively provide aircraft financing. These lenders will usually raise their capital in equity markets to support portfolio growth. When choosing a non-banking aviation lender, be sure to contact a private aviation consultant or aircraft finance broker to confirm the lender’s position in the market and whether they’re a viable option to consider.  

    Bear in mind that all aircraft lenders have portfolio parameters and requirements that they must follow and, in some cases, are limited by the age and types of aircraft they can finance. First and foremost, all lenders evaluate potential borrowers based on the “5 Cs” of credit: 

    • Character: What is their reputation as a borrower? Is their credit history stable?

    • Capital: What is the borrower’s net worth? What type of capital assets do they own?

    • Capacity: Does the borrower have sufficient cash flow to repay the loan? What is their debt-to-income ratio?

    • Collateral: What assets can the borrower pledge to secure the loan?

    • Conditions: How does the borrower intend to use the aircraft? What is the current state of the economy? Is there pending legislation that would affect this loan?

    Note that all lenders use the same criteria to evaluate individual borrowers who are looking to purchase private aircraft for personal reasons as they do corporate borrowers — at the end of the day, credit is credit and collateral is collateral. In either case, the selected lender will have specific loan covenants that the buyer must be aware of. In some cases, the lender might require periodic reviews of the aircraft market value or third-party inspections to ensure that the aircraft is being properly utilized and maintained.

    Whether they work with their existing bank, an aircraft financing bank or a non-bank lender, buyers who are able to secure financing to purchase a private aircraft are opening the door to a world of luxury, comfort and convenience. And for those who are still interested in private aviation but want to avoid the extra legwork with financing, there are plenty of viable alternatives to outright ownership to explore. 

    This article was originally published by AvBuyer on August 23, 2019.

     

  • Tracey Cheek posted an article
    FAQ: What is a Flight Department Review, and How Does It Work? see more

    NAFA member, Lee Rohde, Founder, President and CEO of Essex Aviation Group, Inc., discusses what a flight department review is and how it works.

    “Get a second opinion.” 

    It’s a phrase most commonly heard after a trip to the doctor’s office, but it’s applicable to almost all aspects of life. A second opinion provides fresh perspective, which can be valuable when figuring out what to do or how to improve. This is especially true for private business aviation when considering your aircraft management company or internal flight department.

    Whether applying due diligence or requesting information from your management company or flight department that might require mediation by a third party, a flight department review is an excellent way to ensure that your aircraft and the team that supports it are operating at optimal levels.

    H: What is a Flight Department?

    A flight department is the people and processes responsible for the ongoing management, maintenance and operations of an aircraft on behalf of its owner. A flight department’s responsibilities include, but are not limited to, trip analysis, ongoing maintenance, overall operations, aircraft scheduling, flight planning, crew management and so on. A flight department can range anywhere from a single pilot to an entire facility with an organization staffed by a wide range of aviation experts. 

    Although many aircraft owners choose to outsource their flight department to a third-party aircraft management company, it is possible — and common — to rely on an in-house flight department. There are, naturally, pros and cons to both options. First-time aircraft owners often utilize an aircraft management company in order to take advantage of its existing organizational structure, human resources, vendor relationships and regulatory knowledge. In-house flight departments will need to manage all of these aspects, often with the help of outside resources and the existing support available through their primary business organization. 

    Aircraft owners need to consider their overall goals and objectives in order to evaluate which option will best meet their needs. Most owners who are interested in chartering their aircraft will choose to work with a third-party aircraft management company and operate under its existing Part 135 certificate.

    H: What is a Flight Department Review? 

    A flight department review is, as its name implies, an evaluation of an aircraft owner’s flight department conducted by a third-party entity — usually a private aviation consulting firm

    During a review, a consultant will familiarize themselves with the company’s internal policies, as well as policies that ensure compliance with the FAA or other foreign aviation administration under which the aircraft operates. The primary objective of a review should be to determine whether a flight department is performing according to the standards outlined in their operating manuals, which are often contained within, but not limited to, flight operation and general maintenance manuals and safety management systems. In addition, the review should include an extensive study of maintenance records, personnel training, general organization and the level of care and custody extended to the aircraft.

    The results of this evaluation are presented in a written report to the client. More often than not, consultants have limited findings or concerns. The report will outline any findings, as well as potential solutions or options to correct existing issues. The owner is the sole recipient of this report unless they decide to authorize its release to any third parties.

    An experienced private aviation consulting firm will also share best practices and enhancements proven to be successful by other flight departments they’ve reviewed. Most flight departments are eager to share their experiences and solutions with others in the industry. Among other things, sharing best practices contributes to safety enrichment, costs savings and general efficiencies with flight operations.

    H: Who Can Request a Flight Department Review?

    A flight department review is typically requested by an aircraft owner or their direct advisor (such as a family office) as a measure of due diligence to ensure that their aircraft is being managed properly. However, an aircraft owner or advisor might also request a review if they have issues with personnel management or with certain aspects of their management company and its management of the aircraft. 

    In some cases, a management company will even request a flight department review in order to resolve a dispute with an aircraft owner. In situations like this, both parties look to the consultant to provide an unbiased review and information concerning industry best practices and procedures so that both parties can reach an amicable solution and move forward. 

    On occasion, an aircraft financial institution might request a flight department or management company review to ensure that their assets are being properly managed and operated and to confirm the aircraft records are properly maintained and up-to-date. 

    By getting a second opinion in the form of a flight department review, it’s possible for aircraft owners to ensure that they’re receiving the best service possible, be it from their management company or an in-house flight operation, and that they have a quality private aviation experience.


    Lee Rohde, Founder, President and CEO of Essex Aviation, a business and private aviation aircraft acquisition and consulting firm, has 30+ years of experience in financial and operational analysis, manufacturing, distribution and corporate business development.


    This article was originally published by Essex Aviation