Remarketing Niche Aircraft, The Sale Of A Dornier 328-100 For Eagle Air Iceland

Service Area
Asset Management, Aviation Consultancy, Valuation
Target Sector
Investors, Lenders, Lessors, Operators

Overview

Eagle Air Iceland is a commercial airline operating domestic flights, charter services, and adventure tours in Iceland. The airline has a fleet of turboprop aircraft, including four Jetstream 31/32s and one Dornier 328-100.

In 2018, the airline purchased a 32-seat Dornier 328-100 aircraft; however, the aircraft type proved too large for its operations. In January 2023, Mýflug, together with other investors, bought a controlling stake in Eagle Air and initiated a process to restructure the airline, including rationalising its fleet.

Challenge

As part of this process, the airline was exploring options to offload or monetise the Dornier 328-100, such as remote charter placements or ACMI leases. As the market leader in ACMI leases, ACC Aviation advised Eagle Air that the type was not well-suited for the ACMI market and therefore proposed to remarket the aircraft for sale.

Eagle Air engaged ACC Aviation’s consulting team to oversee the remarketing process for the aircraft, a spare engine, propeller assembly, and a package of spares and tooling. The assets were successfully sold to another Dornier 328-100 operator based in Asia in May 2024.

Our solution

In consideration of the transaction, we chose to remarket the aircraft via a structured private Request for Proposal (RFP) process. You can read more about the various approaches to aircraft remarketing and their relative strengths and weaknesses here.

Our remarketing campaign comprised several key steps:

  • Developing a target list of all Dornier 328-100/300 operators, lessors, and investors.
  • Leveraging our market-leading presence in the ACMI and Charter segments, where our supplier and customer base includes the largest Dornier 328-100 operators, to drive interest in the aircraft. Additionally, actively marketing the aircraft to all remaining contacts.
  • Structuring the RFP bidding process around preset criteria and terms and conditions to ensure comparable bids.
  • Shortlisting and analysing offers, including assessing the credit quality of the bidders and presenting market feedback and pricing to Eagle Air Iceland.
  • During the best and final offer stage, influencing shortlisted bidders to improve the pricing and terms of their offers to drive additional value to our client.
  • Agreeing with Eagle Air Iceland on the winning bid, preparing the Letter of Intent, and leading negotiations of the Letter of Intent with the selected bidder and our client.

In addition to the remarketing process, we also provided Eagle Air Iceland aircraft valuation, deal structuring, and transaction project management services.

The winning bidder in the RFP process proposed a transaction structure that involved a standard sale of the aircraft, spares, and tooling and a deferred sale agreement on the spare engine and propeller assembly. In collaboration with Eagle Air Iceland’s legal counsel, ACC Aviation structured and negotiated the transaction on our client’s behalf.

Client outcomes

As a result of our engagement, Eagle Air Iceland successfully offloaded their Dornier 328-100 aircraft, including spares and tooling, spare engine, and spare propeller assembly, at strong market pricing in a single transaction to a single buyer, making their exit from the type highly efficient.

From the initial engagement to closing, ACC Aviation completed the transaction within a period of 9 months. During the best and final offer stage, we increased the gross sale proceeds our client would receive by 38% through further negotiation, pricing influence, and adapting the deal structure.

With the transaction concluded, Eagle Air Iceland has streamlined their fleet to a single aircraft type. They have also enlisted ACC Aviation’s consulting division to assist them in sourcing additional Jetstream32 aircraft.

Key achievements

Experience counts.
Our achievements prove it.

  • Successfully sold Eagle Air Iceland’s Dornier 328-100 aircraft to a single buyer.
  • Increased client proceeds by 38% through strategic negotiation.
  • Helped to streamline Eagle Air Iceland’s fleet to a single aircraft type.

GLOBAL REACH, LOCAL EXPERTISE

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