Rotors for Rent - RotorHub

02 March 2021

The past year was an eventful but positive one for LCI, according to its CEO, Jaspal Jandu, with the lessor finalising a number of helicopter leasing partnerships to enhance its position and support further portfolio growth. Its portfolio currently comprises 90 helicopters, owned and managed, valued at nearly $1 billion. 

Around 60% are modern twins such as AW169s and AW139s, with the remainder spread across the weight classes. In May 2020, LCI announced that it had established a helicopter co-investment vehicle in partnership with Thora Capital and RIVE Private Investment. The agreement covered six AW139s and three Airbus H130s, all of which had long-term, secure debt financing in place. This followed on from the launch of a similar co-investment vehicle with Flexam Tangible Asset Income Fund a few months earlier. Appealing aircraft

Before the year had ended, LCI had also agreed a new joint venture with Sumitomo Mitsui Finance and Leasing that involved an initial acquisition of 19 helicopters valued at $230 million to be used in EMS, SAR and offshore wind farm transportation. “Our joint ventures with blue-chip business partners highlight the opportunities available in the helicopter leasing marketplace and demonstrate how these aircraft have now become a proven and attractive asset class,” says Jandu. Further such partnerships and joint ventures could follow, he adds. LCI’s limited exposure to the oil and gas sector – 35% of its business – means it has come through the last few years better than some of its competitors.

The other 65% largely relates to EMS, SAR, offshore wind farm, marine pilot transfer and passenger/ utility operations. “Currently, all of our helicopters are on lease or under LOI [letter of intent], which reflects the rather resilient market,” notes Jandu. While COVID-19 and the oil price developments at the start of 2020 impacted the helicopter business, the effect was relatively minor compared with other sectors, such as commercial fixed-wing aviation, he says, thanks to the variety in the end user base, the nature of helicopter operations and the adaptability of helicopters to different roles. “The snapshot today is a fairly positive one, with utilisation in most segments we track now back to pre-COVID levels, and in some cases improved. The mission-critical nature of these types of helicopter operations has really been demonstrated over the past year,” he adds.

Growth strategy Jandu says LCI’s business plan has always been based on diversification, “with a primary focus on risk mitigation and a very careful approach to shaping our portfolio”. He adds: “This has certainly played to our advantage this year and through the down cycle over the last few years as we successfully navigated a difficult playing field that has been characterised by a number of bankruptcies.”

LCI intends to continue with this approach and plans “an aggressive fleet growth strategy” focused on newer, twin-engine types with a large customer base and multiple mission capabilities. In particular, the offshore wind market is set to feature prominently in the company’s plans. LCI was one of the first lessors in this sector, initially in the North Sea, but it is keen to broaden into new markets, especially in Asia, with Taiwan, China and Japan all developing wind energy. A buoyant Jandu concludes: “In short, we are very much open for business and are keen to grow at this time.” ▪

By Emma Kelly 

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