Hatfield, Hertfordshire.....Falko, the newly-launched aircraft asset manager, enters the commercial aviation market on the back of a strong portfolio, an excellent financial position and with growth plans for the future, according to Jeremy Barnes, Chief Executive Officer of the new company.
“Our acquisition of the BAE Systems Asset Management business with the backing of the Fortress Investment Group of New York, will unleash the potential of a talented, experienced and ambitious team who will now focus on building a future rather than dealing with a legacy,” said Mr. Barnes.
He added: “We have the support of a very powerful financial backer that has made a considerable investment in the business and is looking to deploy more capital to support and grow the business. We are now free of past constraints and have greater scope to be entrepreneurial.”
Paying tribute to the BAE Systems stewardship of the Asset Management business, Mr Barnes pointed to the strength of the enterprise that has been acquired.
“We have a fantastic portfolio of 143 aircraft which has been independently valued at between US$300-400 million. Our customer base is very strong and we have a contracted forward order book in excess of US$200 million. The portfolio yield averages around 20 percent, which compares very favourably with that of most aircraft leasing companies. The BAe 146/Avro RJ, which make up the bulk of the value in the portfolio, are wonderful products with a long life ahead of them. They are reliable, have great performance and utility and because of their low acquisition or lease costs have competitive economics in a variety of different market sectors.”
The initial focus for Falko is to maximise the cash flow proceeds from the current portfolio. This will continue the strategy of selling assets when appropriate, leasing assets where possible and extending leases with key customers.
Mr. Barnes added: “as an investment-led company, we are also open to product development opportunities for the existing portfolio to enhance product value. At this stage, however, we are not in a position to reveal our plans.”
In the longer- term the business will seek to exploit emerging opportunities using the proven team and the robust processes that have been developed over many years.
“We plan to invest in selective acquisitions of both used, and eventually, new aircraft to build a future portfolio that is cohesive and for the long-term. We are working hard on a number of possibilities already,” added Mr Barnes.
“It’s going to be an exciting ride,” he added, “as we grow Falko and position it in the market as a different type of aircraft asset manager, with a focus on meeting the needs of underserved areas of the market as a differentiator from other aircraft leasing companies.”
Falko is a boutique aircraft asset manager dedicated to delivering value from our commercial aircraft portfolio. With the support of Fortress Investment Group LLC, and in pursuit of our long-term growth strategy, we offer innovative and proven aircraft leasing and finance solutions for the market.
Jeremy Barnes is Chief Executive Officer; Paul Stirling is Executive Vice President, Asset Management; and Martin Brennan is Chief Financial Officer.
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