Successful aircraft remarketing – maximising value from a distressed aircraft
As part of this aircraft remarketing assignment, we managed and oversaw the entire remarketing process, from the initial aircraft remarketing strategy through to the closing of the transaction. Our scope of work included the following:
Pre-transaction Workstream and Aircraft Valuation
As an initial step, ACC Aviation engaged with our client and their technical representatives to ensure that the aircraft’s records were complete, in good order, and would be easily accessible to potential buyers after the execution of a Letter of Intent. We worked with our client’s technical representatives to prepare the aircraft remarketing specification, which summarised the maintenance status and technical condition of the aircraft.
Prior to bringing the aircraft to market, we worked with our client to set internal pricing expectations. As part of this phase, we provided our client with an aircraft appraisal, a maintenance-adjusted aircraft valuation and our opinion of the aircraft’s current market value.
Combining market intelligence with our data subscriptions and contacts database, we identified all potential buyers of the aircraft, developing a robust target list and setting the stage to actively remarket the aircraft.
Active Aircraft Remarketing
In remarketing the aircraft, we pursued both passive and active remarketing strategies. We published the aircraft availability on reputable industry sites and pushed the availability through ACC Aviation’s social media following of 7,000 plus followers while, at the same time, leveraging ACC Aviation’s team of over 60 aviation professionals based across five global office locations to actively promote the aircraft availability to our target list.
We received expressions of interest, performed Know Your Customers checks on potential buyers, analysed offers and offer conditions, and presented them to our client with recommendations on which offers to consider further.
Together with our client’s legal counsel, we advised our client on the drafting and negotiating of the Letter of Intent. After execution of the Letter of Intent, we engaged with the potential buyer and their technical representatives to conduct the pre-purchase inspection and answer questions related to the aircraft’s technical condition and records status.
Aircraft Transaction and Closing
After completion of the pre-purchase inspection, we worked with our client’s legal counsel, advising our client on the drafting and negotiation of the Sale and Purchase Agreement. Upon execution of the Sale and Purchase Agreement, we oversaw the closing of the transaction, including the issuance of the bill and handing over possession of the aircraft and records to the buyer.
Related case studies
ACC Aviation provided valuable assistance to a West African financial institution by helping them protect their interests and reduce financial exposure during an aircraft remarketing process. Through careful tailoring of the aircraft lease agreement to account for the unique technical condition of the aircraft, ACC Aviation was able to help the lender structure a lease that effectively transferred significant risk and capital expenditure to the lessee.
ACC Aviation was engaged to perform the lease return process on our client’s behalf, performing the physical and technical inspection of the components, ensuring the components met lease return conditions, preparing and managing an open items list, and preparing the technical data room files in support of the remarketing process.
Our client set out to launch and manage a Shariah-compliant aircraft leasing fund with a targeted capitalisation of five billion dollars. The structure of the fund required a combination of equity and debt, with a targeted asset profile of new narrowbody and widebody aircraft.
Over ten months, ACC Aviation successfully supported a consortium of lenders to prepare and fully liquidate the non-performing portfolio, recovering significant amounts of capital for the lenders.