ABL Aviation Independent Aircraft Investment Manager INVESTOR PRESENTATION - CONFIDENTIAL 2019
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ABL Aviation: Full-service Aircraft Investment Manager
ABL Aviation
Independent Aircraft Investment Manager
INVESTOR PRESENTATION - CONFIDENTIAL
2019
Disclaimer & Risk Information
This material provides an overview of ABL Aviation Ireland Ltd. and its affiliates (referred to as “ABL Aviation”). This document (including any attachments hereto) is solely intended to be a
general overview and presentation of certain investments originated, advised and managed by ABL Aviation and its affiliates. Nothing herein is to be construed as a solicitation or an offer to buy
or sell any security or interest in an investment vehicle managed by ABL Aviation. The information provided in this document is for informational purposes only and is provided solely in response
to the specific information request by the recipient. The information is current only as of the date on which it was dated.
The information contained herein is strictly confidential and no information contained herein either in whole or in part may be reproduced or redistributed without the express written consent
of ABL Aviation.
This document may contain certain forward-looking statements, projections, opinions and information relating to certain portfolio investments managed by ABL Aviation that are based on the
beliefs of ABL Aviation as well as assumptions made by, and information currently available to ABL Aviation. Such statements reflect the current view of ABL Aviation with respect to future
events and are subject to certain risks, uncertainties, and assumptions, including a number of risk factors. Should one or more of these risks or uncertainties materialize, or should underlying
opinions or assumptions prove incorrect, actual results may vary materially from those described herein.
Past performance is not necessarily indicative of future performance. In considering the target performance information contained herein, prospective investors should bear in mind that past or
targeted performance is not a guarantee, projection or prediction and is not necessarily indicative of future results. The target returns stated herein are based on ABL Aviation’s belief about
what returns may be achievable on investments that ABL Aviation has made and intends to pursue in light of ABL Aviation’s experience with similar transactions and its knowledge of the
aviation industry.
ABL Aviation cannot be held responsible for any direct or indirect loss incurred by applying or distributing (with or without ABL Aviation’s consent) any of the information in this document.
The statements and opinions expressed herein are subject to change without notice based on market and other conditions and may differ from opinions expressed in other businesses and
activities of ABL Aviation. This information provided is for informational purposes only and should not be construed as investment advice or legal opinion.
© 2014-2019 ABL Aviation, an ABL Corporation Company - All Rights Reserved
2
About ABL Aviation
OUR TRACK RECORD AS
INDEPENDENT ASSET MANAGER
Originated & Managed Aircraft Investment Originated No Conflict of Interest
x20 Aircraft +$400M Independent
Exclusive Partnership Fully Automated Analysis Technical Team
JOL & JOLCO AI Software In-house
ABL Aviation Profile O u r Te a m Services
Independent and dedicated third party servicer to aircraft
equity and debt investors:
• Founded in 2015 • JOL & JOLCO transactions
• Independent (unique in today’s market) • Sale-and-leaseback (SLB) transactions
ABL Aviation’s multinational team brings incomparable • Tax lease structuring
• Full-service aircraft investment manager • Shariah compliant transactions
knowledge and service to the aerospace industry; sourcing,
• Full commercial aircraft life cycle expertise • Innovative deal structures
managing and remarketing the aircraft over the life of the
• 20 aircraft mix originated and managed
transaction. Our in-house technical team provides ongoing Full-service provider with all key functions in-house:
• Dublin, New York, Casablanca, Hong Kong & Dubai offices • Established global origination and remarketing network
asset management for aircraft portfolios.
• Management of aircraft portfolios
• In-house technical team
• In-house Technical team with unique new, mid-life and
• Exclusive Partnership with SBI Group for JOLs & JOLCOs end-of-life aircraft know-how
• Repossession expertise
© 2014-2019 ABL Aviation, an ABL Corporation Company - All Rights Reserved
3
ABL Aviation’s Added Value
A BL AVI AT I ON 1200+
Added value for the investor Opportunities Sourced
Wide Network ABL Aviation’ Strategy
Wide origination & remarketing network of airlines,
Origination & banks, lessors and global investors together with an Meeting Lessors once a quarter First two years focused on Lessors
Remarketing Platform experienced team capable of placing aircraft in a Meeting Airlines’ HQs semi-annually Forward focus on increasing the
timely manner; meeting economic return criteria. Constantly connected with Debt providers number of airline deals
JOL & JOLCO transactions
Integrated independent asset management services to
develop the value of the aircraft and engines for
Asset Management Approach lessors, lenders, investors and airlines, avoiding Full Automatization In-house Technical Team
potential conflicts of interest. AI and Blockchain innovation will Provide innovative ongoing asset
improve investment outcomes management for aircraft portfolios
Innovative tailor-made solutions to manage all
technical and regulatory needs during the entire
Aircraft Technical Management aircraft lifecycle: Pre-acquisition, delivery, operation,
modification/conversion, lease, and sale.
Great partnership network for both the technical and Successful Bids Target Return
the finance sourcing and restructuring, the analysis 18 Bids won +US$ 400M Meeting Investors returns
Partnership Network and implementation of the optimum finance
Mix Originated & Managed through innovative deals
structures within commercial, financial and tax
constraints.
Offering a wide range of options to different investors Bids Placed
placing there aircraft under the management of ABL
Adding Value for the Investor Aviation such as investors are completing each other
under the same roof with different targets in terms of Closed 16.1% of Qualified Opportunities
aircraft and return.
© 2014-2019 ABL Aviation, an ABL Corporation Company - All Rights Reserved
4
Our Capabilities
Global Platform Great Partnerships
• Established global origination & remarketing network: • Strong connection with financial institutions and debt providers
allows us to offer flexibility and to be innovative regarding the
deal structuring
• Meet with all Lessors at least once a quarter
• Constantly connected with Debt providers
• Lower cost of capital to finance the world’s increasing fleet for
• Visit Airlines’ HQ semi-annually both airlines and lessors
• Bi-annual calls with industry experts
• Working close to the airlines to originate and manage different
• Weekly Communication with Lenders, Appraisers & Industry type of solutions according to their needs
Experts
Fully Automated Analysis In-house Technical Team
• Proprietary real-time technical management software • Highly experienced Technical team
automatically monitors all maintenance driven events
• Proven ability during negotiations to add value and increase
• Innovative analysis system: returns
• Pricing synced to appraisers’ database • Monitoring program starts quarterly and moves to semi-annually
• Latest MRO & OEM prices
• 170+ airlines’ credit analysis on live • Constantly looking for new options to create value
• Blockchain & AI software acquired in 2018
• Ensure safety is managed as it maintains the value
© 2014-2019 ABL Aviation, an ABL Corporation Company - All Rights Reserved
5
Aircraft as Investments
Asset Nature Financial Metrics Target Returns & Size Of Market For Fixed-Income & Aircraft
• USD Denominated - No FX risk • Primarily Debt Financed New Aircraft (0-4 years) End-of-life Aircraft (16-25 years)
• Higher growth rate than GDP (1,5x) • Expected Returns ~ 8% - 12% $165.0B $8.5B
• Homogeneous (2 manufacturers) • Portfolio Gain from absolute return Aircraft1
• Long-lived assets: 25yr Economic Life and yield Mid-life Aircraft (5-15 years)
• Need to be replaced after useful life – • Stable and predictable long-term cash $36.0B
continuous supply needed flows ABS Series A ABS Series B
• Mobility: Easy to transfer assets • Depreciating Asset $10.5B
$4.0B
between locations; homogeneity • Regulated Market: Cape Town Treaty Fixed- EETC B-Tranche
• Flexibility: Easy to modify assets to & Section 1110 of US Bankruptcy Code Income2 $6.0B
EETC AA-Tranche EETC A-Tranche
new demands (commercial to freight) • Active and available aviation
$3.5B $20.0B
insurance market
0% 5% 10% 15% 20%
Aircraft1 Infrastructure2 Real Estate2 Private Equity2 Target Returns
Notes:
Fairly certain – Low expectations 1) The Target Returns, the unlevered IRR, for aircraft is ABL Aviation’s opinion, based on current market
Moderate, relative Fairly certain –
maintenance for current income; observations, experience with similar transactions and its knowledge of the aviation industry, and analysis of
Cash Yield predictability dependent on
reserves depend on focus on capital Ascend data from 2010 to 2014.
for mature assets usage rates
usage rates gains 2) The Target Return for the EETC AA-Tranche, EETC A-Tranche, EETC B-Tranche, ABS Series-A, and ABS Series-B
is the yield of the security, as opposed to the priced coupon, at the time of issue from. Includes fixed income
Regulatory issued from 2010 to 2016. The size of the market is the U.S. dollar amount of tranches at the time of issue.
Low Medium to High Low Low
Risk
• Aviation investment generate steady and stable cash flows through the lease term depending
Liquidity Low Low Low Low on the credit quality of the lessee and the asset. Targeted returns can be achieved by an
New: 2 – 7 investment backed by a strong credit and a relatively in-demand aircraft in the market.
Holding Long-term
Mid-Life: 3 – 5 Variable 4 – 10 years
Period 7 years to indefinite • For mid-life and end-of-life aircraft, maintenance reserves are collected and a part of the cash
End-of-Life: 1 – 3
High collected as an aircraft value risk mitigator. Depending on the exit strategy, the remaining
New: High cash maintenance reserve become part of the revenue.
High High for quality assets
Competition Mid-Life: Low
(for quality assets) (for quality assets) operating
End-of-Life: Med
businesses
C a p e To w n Tr e a t y
Core: 6 – 8% Core: 6 – 8%
New: 4 – 6%
Target Value-added: Value-added:
Mid-Life: 8 – 10% 20% + • Recognizes the International Registry as an additional place for the filing of interests,
Returns 10 – 12% 10 – 14%
End-of-Life: 10 – 15% including prospective interests, in certain airframes, helicopters, and aircraft engines.
Opportunistic: 15% + Opportunistic: 15%+
Notes: • Establishes the right for owners of these aircraft to grant an Irrevocable De-Registration and
• The target returns for aircraft is ABL Aviation’s opinion, based on current market observations, experience
with similar transactions and its knowledge of the aviation industry, and analysis of Ascend data;
Export Request Authorization (IDERA) to a secured party.
• Sources: Caledon Capital Management Inc., Introduction to Infrastructure Investing, March 2015 and
Cambridge Associates, The financial Performance of Real Assets Impact Investments, May 2017.
© 2014-2019 ABL Aviation, an ABL Corporation Company - All Rights Reserved
6
Aviation Market Overview
• 176% Increase of global passenger traffic demand from 1995 – 2016. Passenger Historical World Traffic (RPKs) & Global GDP Growth
numbers are expected to increase to 4.3 bn in 2018 with passenger traffic, measured in
revenue passenger kilometres (RPKs), expected to rise 6.0%.
Oil Crisis US Aviation Recession 1st Gulf 9/11 SARS, 2nd Gulf War
• The average load factor is pushing up to a record 81.4%. Passenger revenues are Deregulation War Asian Crises Financial Crisis
expected to grow by 9.2% to $581 billion in 2018, all aided by the support of expected
robust GDP growth of 3.1%. 2x
• RPK growth rate of almost 8% in a sub-optimal global GDP growth is indicative of the
robustness of the aviation sector. Global passenger traffic has grown faster than GDP
through various crises over the past decades. 1.5x Growth rate of demand for air
transport in excess of the global GDP growth in past 40 years. 2x
• Clear correlation between RPK growth and world real GDP growth until 2014, where the
relationship trend appears to widen due to the growth of emerging markets.
• This growth is expected to continue in years to come with growth of over 10% expected
in 2018 compared to the previous year (IATA, 2018)
Source: ICAO, Airbus
Propensity to Travel
• China's general aviation industry is gradually entering a developmental stage from
preparing stage with a 6.2% YOY flight hours increase. Civil Aviation Administration of
2017 passengers per capital to/from/within country
China (CACC) forecasted the number of general aviation aircraft will meet 10,000 in 10
2020, and industry compound growth rate will reach 30%. The aviation industry Circle size proportional
continues to expand globally with airline revenue increasing year on year in 11 of the to country population
past 14 years, with a strong trend of upward growth. The industry net profit is expected
to reach $38.4 bn (IATA, 2017). 1
• Growing income levels in emerging markets are diving higher air travel volumes thus
positive correlation. Middle classes in Asia are expected to quadruple in size in the next
20 years. India is in a position to become one of the biggest global markets due to the
stimulation of new traffic in addition to increased accessibility. 0.10
• The commercial fleet has been doubled over 20 years and 40,000 aircraft are expected
to be delivered between 2016 and 2035. The global passenger fleet includes 26,714
aircraft, according to IBA, of which 48% are leased. 0.01
100 1000 10000 10000
• In 2017 the number of leasing companies with assets in excess of $1 Bn stood at over 50 0
2017 GDP per capita (USD)
(33 companies in 2015) and the number of companies with assets in excess of $10 Bn
almost double the number of 5 companies in 2015. Source: Source: IATA/Tourism Economics ‘Air Passenger Forecasts, PwC’
© 2014-2019 ABL Aviation, an ABL Corporation Company - All Rights Reserved
7
ABL Aviation Global Presence
Dublin
33 Fitzwilliam Street Upper,
Dublin 2,
Ireland
New York
100 Park Avenue,
New York, NY 10017,
Hong Kong
United States
46 Lyndhurst Road, 25th Floor
Central, Hong Kong
Contact us
33 Fitzwilliam Street Upper, D02
Dublin, Ireland
T +353 (01) 234 0210 Casablanca Dubai
197 Boulevard Gate Village 4, Level 3 DIFC
info@ABLaviation.com
Zerktouni, Casablanca P.O. Box 507276, Dubai, UAE
Morocco
© 2014-2019 ABL Aviation, an ABL Corporation Company - All Rights Reserved
8ABL Aviation: Full-service Aircraft Investment Manager
ABL Aviation
Independent Aircraft Investment Manager
INVESTOR PRESENTATION - CONFIDENTIAL
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