Pnc Aircraft Finance - Business jets are on the front burner for PNC Aviation Finance. The company believes there is room for optimism as the economy recovers, spurring new sales as buyers reduce inventories of used aircraft.
PNC Aviation Finance The outlook for business aviation finance remains optimistic. "Since 2009, we've made more commercial aircraft loans than any other company every year," said Alex Overstrom, head of PNC Aviation Finance. "We think there is room to increase our market share given the strength of our platform." Overstrom thinks there's plenty of room for optimism.
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"This business is a strategic priority for the company and we are doing well. Our first half 2017 originations were 40 percent higher than the first half of 2016. We clearly see an increase in demand for business jets supported by a strong macro economy, high confidence and record high asset prices. and a more business-friendly administration that lifted restrictions on ownership of aviation assets. Aircraft utilization is up and business jet deals are on the rise, with a record 1,100 business jet deals in the first half of the year, up 9 percent year-on-year. "We hired this year to maintain the quality of execution with higher transaction volumes."
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PNC (Booth N1513) provides non-public, non-recourse, asset-based financing for more traditional loans and leases to clients in the United States and Canada. "We negotiate with bank clients as well as non-customers. In fact, most of our customers did not have an existing relationship with PNC when we started the airline financing relationship,” said Overstrom. "PNC is the only bank that can offer undisclosed, unallocated asset-based loans, which it considers very good for clients with very complex finances, such as hedge fund, private equity or owner/partners in real estate investments," he added. . or those seeking a very high degree of privacy” for aircraft financing. "We are one of the few players in the market today with the expertise and willingness to hire," he said.
Overstrom said PNC's team consists of about 40 people dedicated to airline finance with an average of 13 years of experience. PNC has teams that can handle all aspects of a transaction from sales, underwriting, credit, documentation, servicing and asset management. The company finances a wide range of business aircraft types, from single-engine turboprops to large-cabin long-haul business aircraft. Currently, there are more than 500 aircraft in the company's portfolio. Of that number, 70 percent are in an asset-based structure and 30 percent are in a debt/lien structure with loan amounts in the single-digit millions to more than $50 million. Overstrom said PNC focuses on maintaining industry relationships and regularly hosts aviation events that attract industry participants, including brokers, OEMs, aircraft owners and potential customers. These events included 11 aircraft and over 100 participants and the Washington, D.C. in September, where air events were held in California, Florida and Texas. Includes the September evening air event held at
While optimistic, Overstrom said OEMs are still in a "difficult position because price drops [of retired aircraft] have reduced competition from new aircraft." Despite this, we still finance a large number of new aircraft, especially with large corporate customers who often lease them. Over the next 12 to 24 months, I expect the used aircraft market to remain strong while the new aircraft challenge continues. As used aircraft inventories decline and prices rise and OEMs cut production, [the industry] should begin to approach equilibrium again.
Going forward, Overstrom said PNC intends to focus on financing more large-cabin aircraft. "Asset-based businesses have historically been skewed towards mid-cabin aircraft," he said. "Within our franchise, we are also making a big push to work with our institutional bankers to secure aircraft financing for our large corporate clients and clients and potential customers." He said he intends to improve PNC's leasing capabilities. Overstrom called PNC's "bread and butter" ability to "get a reverse advantage over our competitors" and maintain the excellence of its asset-backed resources. Financing for turboprops and jets only works under FAA Part 91 rules that apply to corporate and private aircraft, including those that are partially owned. The company does not finance commercial or piston aircraft or aircraft manufactured more than 20 years ago.
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Former Dean Witter analyst Jerry Dunn and sports marketing expert Ken Wilson founded Aviation Finance Group in 1998 in Boise, Idaho. The company specialized in non-recourse financing of private aircraft and created its own platform for providing commercial loans.
Backed by Prudential Financial, AFG originated nearly $1 billion in aviation financing before it was acquired by Pittsburgh-based PNC Finance Services Group in 2004 and changed its name to PNC Aviation Finance. Dunn stayed on until 2005 and Wilson as vice president until 2008, when the two co-founded a Boise-based commercial lender called A10 Capital.
The company expanded further in 2008 when PNC acquired National City Corporate Air, a division of National City Bank.
Wayne Starling, a former senior vice president at Fifth Third Bank, joined the company in 2000 and remained senior vice president and national sales manager until 2017. A leader in the aircraft financing industry, Starling served as president of National Aircraft Resale. In 2015, the Advisory Board for Association Products and Services.
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Ramy Sidhom joined PNC in 2008 as operational risk manager, became chief operating officer of facilities finance in 2012, and became head of aviation finance in 2018. PNC Aviation Finance had a record year in 2017, providing financing to more than 170 clients and startups. Compared to 2016, this is an increase of approximately 40 percent. At that time, PNC Aviation Finance had more than 500 business jets in its portfolio.
PNC, which offers asset and debt-based loans as well as leasing options, has provided more than $3 billion in aircraft financing over the five years ending in July 2021.
Business Jet Traveler is a publication of AIN Media Group, Inc., 214 Franklin Avenue, Midland Park, NJ 07432. Copyright 2023. All rights reserved.
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