Recently launched lessor AVi8 Air Capital is in the process of raising equity, the company’s executive chairman Ray Sisson tells FlightGlobal.
“We’re currently firming up our equity investor base, and we may raise between $500 million to $750 million. It may even be more,” Sisson says.
The lessor plans to build a young fleet of mainly Boeing 737s and Airbus A320s, as well as widebodies such as Boeing’s 787.
AVi8 will pursue traditional leasing deal structures, such as sale-and-leasebacks, and may consider placing orders with Boeing and Airbus “when they need us”, Sisson says.
The lessor is also in talks with an undisclosed airline about acquiring a large portfolio from it, he discloseS.
AVi8 will also look to attract additional investors into aircraft through separate funds.
“But we are also going to – away from our equity structure – look to raise separate funds which will have distinct investment rationale, though our equity backers will be free to invest in those funds,” he says.
“Some investors want speculative order sale-and-leaseback deals with good credits for a middling yield, while others will want to obtain higher yields through acquiring current aircraft already on lease. AVi8 can cater for both through our planned funds,” he adds.
But, AVi8 will be “scale agnostic” as it builds its business, Sisson says.
“AVi8 will not base its strategy around pride of ownership of assets. We will be perfectly happy to scale up during the down cycle and scale down when the market is peaking. AVi8 is going to be focussed on deal velocity, rather than scale.”
Sisson, formerly chief executive of AWAS, argues that in his view, scale is not the key to a successful leasing business.
“When I was growing and managing other large portfolios in the past, people always said scale was vital. In fact, an investment bank once told me that a lessor needed to be sized at around $12 billion upwards to achieve economies of scale," he says. "In my experience that wasn’t the case. What mattered was how many aircraft you could place, how many deals you were doing. If an airline needs an aircraft now, what matters is that you can do that jet for them today – not the fact you already have 15 on lease to them.”
Overall, Sisson sees AVi8 acting as a “clearing house” for the industry.
“We’ll look to buy in the down times, and sell during the upcycle. We won’t look to compete with other lessors. We want to help them when they need it, and offer them solutions.”
Sisson is joined at AVi8 by Eastern Air Lines Group founder Ed Wegel, who will act as the lessor’s chief executive.
The lessor will have offices in Miami and Dublin.
Source: Cirium Dashboard
