Helicopter leasing takes off
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The decision by leading global investors Quantum Partners (part of the Soros group) and MSD Capital (the investment arm of Michael Dell) to form a core part of a $375m investment in a new helicopter leasing company is a key validation of this part of the air financing industry. It follows the successful launch and expansion of Milestone Aviation from its headquarters in Ireland and shows that rotary aircraft offer similar if not better investment returns than mainstream commercial and executive aircraft.

Waypoint is being established to develop a fleet of up to 65 helicopters. These will be destined primarily for the energy, medevac and search and rescue markets globally. By providing new helicopters through a specialist leasing entity, Waypoint can provide enhanced financial flexibility for customers by limiting balance sheet and residual value risk. Operators can choose to mix owned and leased aircraft to retain conservative financial ratios while facilitating growth and modernisation of their fleets and optimise efficiency by deploying new rotary aircraft.
A large and unmined leasing market also potentially exists across the world’s military air forces where helicopter use for troop and logistics transport is extensive. Given the pressure on military budgets globally, could a market evolve in leased transport helicopters too?


Private and Government controlled helicopter operators will find leasing an attractive option too as both equity capital and taxpayer resources are limited for use in helicopter fleets. The lessor can access financing and a wide range of end customers to ensure users in this market can have access to a broader set of funding sources and a deeper pool of customers which should help develop a secondary market in helicopters worldwide.
In March Waypoint Leasing signed a multi-aircraft agreement with AgustaWestland covering four models - GrandNew, AW169, AW139 and AW189 (above).


Milestone has expanded aggressively in recent quarters and has built a fleet of 90 helicopters since forming in 2010. It has deployed $1.2bn in capital and serves 21 operators in 20 countries worldwide. It has total orders of $2.2bn in place currently with OEMs including AgustaWestland, Eurocopter, and Sikorsky.

Commercial use of these helicopters is the core focus of both Milestone and Waypoint for now. The two companies largely eschew executive helicopter markets and instead focus on industrial type customers.

A large and unmined leasing market also potentially exists across the world’s military air forces where helicopter use for troop and logistics transport is extensive. Given the pressure on military budgets globally, could a market evolve in leased transport helicopters too? If so, it would broaden the marketplace open to lessors while giving OEMs a new form of distribution in to a multi billion dollar market where capital expenditure budgets are under increasing pressure. For now, however, both Milestone and Waypoint are leaders in leasing choppers to the energy industry (servicing both exploration and production platforms) and the SAR/Medevac sectors (which are increasingly being privatised).
May 9th 2013.