Building an aviation investment business can be simultaneously regional or global, small or big, geographically disbursed or centralized. By its nature, it involves assets moving between jurisdictions, on a global basis. Like flying, it is a multi-dimensional discipline. Pilots are not only aware of ‘up’ and ‘down’ but of spatial relationships (distance), and the ‘attitude’ or angle of attack of their wings (which have a large effect on lift generated). They listen to the sound of their engines, look to the weather, check traffic, navigational, and verbal information. They keep track of frequencies and checklists, react to changing barometric pressures, temperatures, and consider headwinds and fuel usage. The last dimension? It’s called ‘Situational Awareness’, intuition that grows out of experience and the ability to overcome ‘in flight’ illusions.
There’s a growing recognition aircraft are relatively low risk stable return assets. Given extended low interest rates investors are hunting for opportunities. As US dollar assets with decent returns, aircraft investment has appealed to new money. Whether global or regional, investor enthusiasm and capital availability have resulted in air carriers’ ability to grow capacity. Will new equipment deliveries impact core asset values and yields? Regardless, the capital markets are open, and strong trading conditions support liquidity and demonstrate wide market acceptance of both younger and mature collateral.Does investment management require economies of scale? Former AWAS chief Ray Sisson recently teamed up with Eastern Air Lines founder Ed Wegel to launch AVi8 Air Capital (he challenged the assumption that you had to be large to be successful). “Operating leasing is an important financing alternative for airlines.” Leased aircraft growth rates have significantly exceeded the overall aircraft growth rate.
To perform consistently well requires one to effectively manage the links between people, strategy, and customers while remaining sensitive to the environment and the market place. Study the market and keep it simple. It’s a knowledge based business. Use a process that allows time to think. What matters most is knowing where and when capacity deficiencies may occur.
An organization’s ability to learn faster than competitors is its most sustainable competitive advantage. Whether interested in a long term (a 25-year horizon) or a short-term investment horizon (5 years or less) investment, we work to deliver tactical asset allocation, value retention, remarketability and stability of returns. As hard asset players, our investment experience demonstrates there are gaps to exploit between price and value. This knowledge is the source of our competitive advantage. With experience marketing mid-life aircraft, we’ll get you where you want to go. How many deals you are doing?
Call the air and rail transport investment specialists. We’ll scan the horizon for you. Call RESIDCO.
In the clouds your attitude may seem level even if you are in a turn which can lead to very undesirable results. (Consider JFK junior’s spatial disorientation flying at night, in haze, over water, off the coast of Martha’s Vineyard.).
 New equipment deliveries are accelerating because of orders previously placed.
 Moody’s Investors Service ranks airlines and lessors as stable but expects margins will fall and capacity growth will moderate in 2017.
 November, 2016, Slow Road to Consolidation, Flight Airline Business, January/February 2017.
 Eric Hoffer (1997), “In times of change, it is the learners who inherit the future. They usually find themselves equipped to live in a world that no longer exists.”
 Benjamin Graham: “Price is what you pay, value is what you get.”
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