Post Year: 2021

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Helicopter lessor LCI Aviation has raised more than $1bn of helicopter capital since 2019, according to the company. The figure relates to financings and refinancings through to June 30th, 2021, and covers a total of 25 transactions sourced from 20 separate financial institutions.

CEO Jaspal Jandu told Helicopter Investor: “We have seen interest from across the capital spectrum – from infrastructure funds, through to commercial banks and institutional capital. Investing in long-dated, hard currency and inflation-protected assets is seen as a positive for many clients in today’s economic environment.”

LCI predicts the industry will see 7,000 commercial helicopter deliveries in the next 10 years. “It is vital that we all help secure a strong capital base for this industry,” added Jandu.
In the company’s announcement on LinkedIn, it said: “Helicopters are eminently financeable assets and we have attracted new and diverse capital into the market by demonstrating their virtues which include long economic lives, full power-by-the-hour coverage, and mission-critical contracts.”

LCI Aviation launched a new helicopter co-investment vehicle with LCM Partners earlier this year.

By Yuvan Kumar, Helicopter Investor 

To read the full article, please click here

“There’s no getting away from it, the first half of 2020 was certainly a challenge for our operators and therefore ourselves,” reports Crispin Maunder, executive chairman of LCI, the Libra Group company that specialises in leasing helicopters and commercial fixed-wing aircraft.

Like many other businesses at the start of the pandemic, LCI closed its offices in Dublin, London and Singapore, and the staff adapted to working from home, and zoom calls, much like the rest of the world did for the next year.

Although necessary, such a practice had its drawbacks, and Crispin says one of those was losing that personal connection with the customer, which LCI is well known for across the industry. Alongside this were the complications caused by travel restrictions when in-person meetings with established and potential customers were unavoidable. Despite the day of the digital office now being here, there are still some things that require face-to-face contact, and this proved tricky to manage.

Safety first

But it was LCI’s customer base that felt the greatest impact, as Maunder explains.

“As you can imagine, there was significant disruption to the offshore market from having to get oil and wind farm workers to and from the rigs in a COVID-safe environment. It was obvious there was a need to reduce the number of people on the helicopters, but there was also the challenge of actually getting those workers to the point of departure for the mission because commercial flights were completely disrupted.

“It was a chaotic impact on the oil, gas and wind farm industry. But things began to stabilise once operators started installing protected cockpits for the crew and put in place COVID-19 protocols.

“A few of our operators did suffer some cashflow problems at this time,” he reports. “Fortunately, we were able to step in and help with that. But most took the changes in their stride. The most complex issue was organising flight crew roster patterns, but this was balanced by the reduced number of flights to and from the rigs, which shrank the utilisation of the fleets. Currently, for operators, it’s now regarded as the new normal.”

There is light at the end of the tunnel in relation to COVID and, looking ahead into late 2021 and beyond, it’s clear there are growth industries that will need continued helicopter support. The most significant of these is offshore wind farm development. Maunder provides his views on this market.

“Reliance on offshore oil and gas is being questioned again by many organisations, so of particular interest to LCI is the rise in offshore wind. Much of this still relies on maritime transfers, and here is where I’d like to make a point. An environmental, social and governance statement should be made that states a helicopter carrying eight to 10 passengers is far more environmentally acceptable and faster, and will burn far less CO2 per trip, than a supply boat. Additionally, flights can be carried out no matter what the sea state is. This needs to be considered by the wider industry as a whole.”

With many nations around the world seeking to develop greener energy resources, the shift towards wind farms has steadily gathered pace in the last decade. Maunder highlights where the demand is likely to come from in the next few years.

“Offshore wind farms are going to increase. We’ve got a well-established industry in Europe, especially in the southern region of the North Sea, and I believe the Baltic will soon become significant, and then the Irish Sea as well.

“Then you’ve got Asia, and in particular China. They have a very large offshore wind business. Taiwan is now looking as well. And, of course, there’s the US. I can see this area picking up elsewhere too.”

Emergency vehicles

Maunder continues: “Another significant area of growth is the EMS market, which has become very much a social service in my view. When I first became involved in helicopters, the idea of a helicopter arriving at an accident scene was unheard of. Now, it’s considered to be natural. EMS is an area of growth which LCI is watching.”

Looking to other markets, and the current search and rescue requirements out to tender within the industry, he points out that with many private operators providing SAR services, as in the UK, this sector is also an area of potential interest for LCI.

Although Maunder freely admits that COVID-19 did have an impact on helicopter operations, he acknowledges that, compared to commercial fixed-wing operators, the industry got off relatively lightly. In addition, he believes it may well recover far quicker than other aviation sectors, thanks in part to the introduction of new technology and new aircraft types.

“I am extremely passionate about the latest technology coming from many of the OEMs. The main four are all producing new developments, environment. It’s what all four OEMs are currently striving for and introducing.”

When asked about the market prospects for different regions of the world, Maunder points out that the Asia-Pacific market is showing signs of steady growth, before offering insight into other areas.

“The US market, from our point of view, seems to be much more focused on people who want to own their aircraft – in which case it’s not our market, because we are a lessor – but that is beginning to change. The biggest difference in the US HEMS market compared to Europe, Australia and other places is that, in the US, they’re prepared to accept single-engined helicopters flying over built-up areas, whereas there’s a twin-turbine requirement elsewhere.

“From our position, we can see activity everywhere, but in South America, both West and East Africa, and offshore Africa, there are political issues.

“I think what has to be remembered in our particular aviation sector is that the upsurge within the rotor sector started about 18 months ago, and we weren’t too tarnished by the fixed-wing market. Presently, there’s certainly a shortage of good AW139s out there, which is putting pressure on lessors to supply them,” notes Maunder.

Attractive assets

As far as LCI is concerned, the future is certainly looking bright for the rotary-wing side of its business, but there is a wider issue within the sector in relation to securing the necessary financial backing for helicopter leasing.

“Unfortunately, the helicopter market has been caught up in the fixed-wing issues, and I’m afraid the banks have been badly burned on this side and therefore assume all aviation is not a good investment sector at the moment,” says Maunder.

“But investing in a helicopter is valid. It’s an unpressurised long-life asset, with a long technology cycle. Also, how they operate is different in terms of business structure. At the moment, Airbus is already talking about rewinging the A320 in the early 2030s, and if I had invested as a lessor in this aircraft, I’d be concerned.

“For LCI as a lessor, we lease a helicopter to an operator, who in turn has a long-term contract with an EMS or offshore client. The helicopter becomes a small cog in a big wheel. It’s different to the airline world, where it is cut-throat and you’re reliant on the management of that airline being able to perform over the next 10 to 20 years.

“There’s no doubt finance is difficult, and I think we [the industry] collectively need to address that from end to end. I think it’s fair to say that there are fewer lessors
out there providing helicopters, so we need to be protected when an oil company exercises its rights of early termination. The impact on the business can be significant.

“At LCI, we are certainly not going to invest in 10 helicopters costing £20 million each if the end-user is quite prepared to walk away after a matter of months. If a company wants new-technology helicopters, they have to be prepared to play their part in the overall industry,” states Maunder.  

By Glenn Sands, Rotorhub Magazine 

To read the full article, please click here (pages 49-51) 

Chris Lloyd joined LCI in 2018 as Vice President Marketing for Asia, based at its office in Singapore. He has over 30 years’ experience in aviation, most of it in Asia, with a proven track record in aircraft sales and leasing. He previously led a helicopter and fixed-wing sales and brokerage company based in Singapore, offering consultancy, leasing and valuation services across the Asian and Oceania regions. Chris is a fixed wing and helicopter pilot.

HOW WOULD YOU DESCRIBE THE PAST YEAR FOR LCI?

Throughout the past 12 months, despite the challenges of Covid-19, LCI’s doors have remained firmly open for business. We have continued to move leased helicopters between customers and take delivery of new helicopters. The travel and aviation sectors have been materially affected by the pandemic, but the helicopter leasing marketplace has remained active, and we have played a leading role in that with much of our activity taking place in Asia-Pacific.

WHAT IMPACT HAS COVID-19 HAD ON THE HELICOPTER MARKET?

While some parts of the helicopter market have been slightly impacted by Covid-19, the mission critical operators and the lessors they partner with, such as LCI, were able to respond tactically to the situation.

The helicopter leasing sector has displayed remarkable resilience, particularly in regions such as Asia, where we have seen a widespread recovery in aircraft utilisation in recent months. Offshore activity has returned to near-normal levels, and EMS activity has actually increased in countries such as Australia as many people are now holidaying at home. Such are the returning levels of confidence that we’re already seeing new contracts being awarded which is increasing demand for leased helicopters.

In the last three months we have delivered two AW139 helicopters to customers in the region, while extending other lease agreements. Most recently we delivered a AW139 helicopter to SFS Aviation, a longstanding Asian customer, to support its offshore activities in Thailand. Also, in 2020 we added two more helicopters to our fleet in Australia, which is now our single largest market with 18 helicopters.

HAS COVID-19 AFFECTED INVESTOR CONFIDENCE IN THE HELICOPTER MARKET?

The resilience in the helicopter leasing marketplace has meant that capital continues to be invested. LCI led the industry in sealing several new partnerships with financial institutions in 2020, highlighting the financial community’s confidence in the helicopter sector and their long-term belief in helicopters as investment grade assets.

Chief amongst these was our establishment of a joint venture helicopter leasing business with Japan’s Sumitomo Mitsui Finance and Leasing Company, Limited (SMFL) in September 2020. The vehicle launched with the initial acquisition of 19 next generation helicopters worth US$230 million, with SMFL and LCI co-investors in the partnership. Despite only being launched a few months ago, there are already plans to grow this fleet significantly. 

The young, modern helicopters acquired by our joint venture are deployed with operators across the globe on missions including EMS, SAR and offshore wind, with a strong lessee profile, long average lease tenor and full power by the hour maintenance coverage.

Earlier in 2020, we also established a co-investment vehicle with Thora Capital, LLC and RIVE Private Investment as partners. The vehicle currently holds six Leonardo AW139s and three Airbus H130 helicopters valued at over US$100 million, all of which have long-term capital in place and are currently deployed in Australia and the USA.

WHAT CHALLENGES HAS LCI FACED IN THE LAST 12 MONTHS? 

The Covid pandemic created a set of operational and technical challenges for operators and lessors alike. For LCI, these arose with the need to perform remote inspections and transitions due to restrictions on travel. However, the investment we have made over the last five years in creating a robust helicopter leasing, management and investment platform has allowed us to overcome these challenges.

Within our platform, we have all the skill sets and expertise – operational, technical, legal, financial, tax and more – to manage helicopter investments, placements, transitions and reconfigurations across sectors and geographies.

For example, that enabled us to efficiently reconfigure, remarket and transition three helicopters based in China to new operators in the Asia-Pacific region.

WHAT ARE YOUR FUTURE EXPECTATIONS FOR THE ASIA HELICOPTER MARKET?

Asia has always been a region of major strategic importance for LCI, accounting for around a third of our leased fleet placements. We have had an office in Singapore since 2008, and together with our parent the Libra Group we have a long-standing history and record in the region.

That focus continues to grow in 2021 with many opportunities on the horizon. These include in the EMS sector, which is at different stages of maturity across the region, ranging from large established markets like Japan, Australia and New Zealand where replacement aircraft will be needed, to new markets such as South Korea, Taiwan and China.

The need for helicopters to support the exciting offshore wind market is starting to grow in Asia. We see this happening first in Taiwan, but with longer term potential in China, South Korea and later Japan.

The offshore oil and gas market, in which LCI is already active in Asia, continues to display significant potential for new helicopter placements, especially in markets such as Malaysia, Thailand and India.

These are just a few of the opportunities that we see developing in Asia in the coming years. LCI continues to invest in its presence and partnerships and is very much open for business in this exciting and dynamic region.]

By Asian Sky

To view the article, click here.

Aircraft lessor LCI recently gained Sloane Helicopters as a customer with the lease of two new Leonardo AW109SPs. Configured for EMS Operations, the helicopters are the first of the type in the LCI fleet and were recently delivered to Sloane’s base at Sywell, Northhamptonshire, in the UK.

Sloane will operate the helicopters on behalf of The Air Ambulance Service, which provides air ambulance services in Warwickshire, Northamptonshire, Derbyshire, Leicestershire, and Rutland.

LCI formed a co-investing vehicle with investment management firm LCM Partners for the acquisition of the AW109SPs. LCI chief financial officer Praveen Vetrivel called the co-investment vehicle with LCM Partners “further evidence that helicopters are viewed as resilient, long-term and desirable asset class.”

LCI said it has seen consistent growth over the past decade and currently manages around $1 billion worth of assets in partnership with a number of financial institutions. LCM Partners currently manages around €50 billion worth of assets across 2,800 portfolios. 

By Mattie Bohanan, AIN

To view the article, click here 

LCI has expanded its aviation leasing, investment and management platform with the formation of a new helicopter co-investment vehicle with LCM Partners.

The vehicle has been launched with the initial acquisition of two Leonardo AW109SP helicopters used for emergency medical services. These are some of the most advanced Air Ambulances in the UK and will provide critical care and emergency transport of patients, particularly in the initial ‘golden hour’ of care, stabilisation and recovery.

Praveen Vetrivel, Chief Financial Officer of LCI, says: “The establishment of our new co-investment vehicle with LCM Partners, one of Europe’s leading alternatives investment management firms, is further evidence that helicopters are viewed as a resilient, long-term and desirable asset class.”

Graeme Laing, Head of Asset Finance at LCM Partners, says: “LCI is a proven lessor, respected by the financial community for sound and efficient asset management, deep sector experience and reliable returns. We look forward to combining our respective expertise in the management and growth of this successful and dynamic joint venture.”

The two AW109 helicopters are the first of this type to join LCI’s fleet. They are being leased in EMS configurations to Sloane Helicopters, a leading helicopter service provider and a new customer for LCI.

With a sound commercial strategy and highly experienced senior management team who have worked together for almost 10 years, LCI has consistently grown in scale and value since 2012. It has built strong relationships with many leading financial institutions and, in partnership with them, manages a current asset pool worth around $1 billion.

LCM Partners has one of the strongest origination capabilities in Europe and is responsible for managing assets with a collective value of over €50 billion across more than 2,800 portfolios.

To view this article in Aviator, click here

For more than a century, International Women’s Day has marked a day of celebration and advocacy for women’s rights and equality around the world. 2020 and 2021 saw significant progress: female leaders received global praise for their effective handling of the COVID-19 pandemic; Kamala Harris became the first female, black, and South Asian American Vice President of the United States; and not just one but two women were awarded the Nobel Prize in Chemistry. 

Nevertheless, according to the World Economic Forum’s Global Gender Gap Report 2020, at the current rate of change, gender parity will not be attained for another 99.5 years. Our world and industry leaders will play a significant role in effecting permanent change, but each of us can make a difference, not least by taking the time to describe our own paths and share what we have learned.

Eleven exceptional women work at LCI, in every department, making up more than a third of our team. In this blog post, Jane Keith, Monica Butfoy and Chloe Lynch, talk about their roles, career paths and what advice they would give to women at the start of their careers. 

What do you do at LCI? 

Jane: I am Vice President, Transaction Management at LCI. I project manage a range of different transactions such as new deliveries and aircraft transitions between customers as well as managing the insurance requirements for LCI’s owned and managed portfolios.

Monica: As Technical Manager, I am responsible for the management and administration of the company’s wide-ranging lease management system which tracks all aircraft information, actual flight hours, rents, invoicing, reserve rates, maintenance payments and invoicing thereof. 

Some of my key responsibilities include reviewing individual legal and maintenance support contracts; updating aircraft utilisation on a monthly basis and issuing maintenance reserves invoices to operators; and managing annual audits of aircraft and operators, which include a complete review of all aircraft technical records, AD/SB status, aircraft/engine logbooks and maintenance programmes, as well as a physical inspection of aircraft.

I also assist with deliveries of new aircraft to new operators and redeliveries of existing aircraft to new operators, support operators and a large fleet of aircraft, and monitor the aircraft and equipment to ensure compliance with contractual obligations.

Chloe: I am an Assistant Accountant at LCI. 

What aspect of your job do you most enjoy? 

Jane: I enjoy the nature of project management work. No two transactions are ever the same and there are always different sets of legal, technical, logistical, insurance and fiscal circumstances to be considered and worked through. This involves coordination with many different stakeholders which can be challenging but highly rewarding when the job is complete. LCI has a broad customer base all over the world and I’m lucky enough to have worked with many great people from all across the globe and learned all about our customers’ diverse operations.

Monica: Not one day is the same. I enjoy juggling lots of different projects, dealing with lots of outstanding people in the aviation industry, constantly learning in an ever-changing industry, as well as having to be organised and one step ahead.

Chloe: Dealing with all facets of the company as well as my own team; Technical, Legal, Portfolio Management, Finance. There is always a new project ongoing and no two weeks are the same!

How did your career path lead you to this point? 

Jane: I studied law in Trinity College Dublin. In 2010, I responded to an advertisement in a newspaper to work as a legal assistant in a small fixed wing aircraft leasing company in Dublin and loved it so much that I have worked in aircraft leasing ever since!

Monica: I had a keen interest in aviation from a young age. I moved from the hospitality industry at the age of 28 after spending many years watching the S61 coast guard aircraft fly overhead at Waterford Castle Golf Club where I managed the clubhouse. One day the owner flew in by helicopter, so I asked if I could go for a flight. Two months after that flight I started my Private Pilot’s Licence in helicopters. Unfortunately, I started during the recession, so once I had completed the private licence I knew I would not get the funding to proceed onto commercial. I changed focus and went to Institute of Technology Carlow to complete a 3-year Bachelor of Engineering in Aircraft Systems. I was still adamant I wanted to work with Helicopters so during my first year in Carlow I continuously contacted CHC Search and Rescue until they agreed to offer me work experience. I worked with them during summers and any holidays. Once I completed college, they offered me some contract work which turned into full time. After 4 years I moved to Lobo leasing and then on to LCI.

Chloe: I completed a Bachelor of Commerce degree in University College Cork and before joining LCI, I worked on the finance team in an insurance company for 3.5 years.

What advice would you give to women at the start of their careers who want to work in a role similar to yours?

Jane: I would say never be afraid to ask questions. It’s the only way you learn and when you are starting out and trying to solve a difficult issue – and things seems daunting – ask your colleagues and seek advice from those more experienced than you. There is almost always a solution to even the most seemingly problematic situation.

Monica: Always push forward and never give up on your dream, even if you have to take an alternative path along the way. Never allow anyone to put you off what you want to do in life. If someone says you can’t or won’t make it in that industry, make that your one of your many reasons to succeed. No matter how hard you might think a career is, with hard work and determination everyone can succeed. Never think you’re not good enough to do something!  Make your family and children proud!  

Chloe: 1. Don’t be afraid to speak up. 2. Be willing to learn and have a questioning attitude. 3. Have confidence in yourself.

Visit the official International Women’s Day website to get involved and show your support.
www.internationalwomensday.com

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 

To view the article, click here.

We are pleased to announce that LCI has delivered a Leonardo AW139 helicopter to SFS Aviation, a long standing customer. The helicopter, which was previously deployed on EMS operations in China, will be used by SFS to provide offshore support services to PTTEP in the Gulf of Thailand. 

LCI’s expert team has deep experience in configuring aircraft for different roles and the unique needs of each lessee, and is proven in its ability to seamlessly transition aircraft between locations and roles.

In this podcast, LCI’s Executive Vice President & Global Head of Marketing, Nigel Leishman speaks to Jeffrey Lowe, CEO of Asian Sky Group about managing the impact of Covid-19, lease rates, and the Asia-Pacific helicopter market.