Gates and Partners Strengthens US Presence with Aoife O’Sullivan Speaking at NBAA

Aoife O’Sullivan, lead partner in Aircraft Finance at international aviation law firm Gates and Partners will be speaking at this year’s NBAA conference when she joins an international panel discussing the thorny subject of cross border tax issues. Fellow panellists include an EBAA member, and a Brazilian and American transactional lawyer. Together they will debate how the growth of international business aviation operations brings a wealth of new complexities in the tax and regulatory arena. “As business aviation becomes increasingly globalised with new geographical markets entering the sector it is essential that aircraft operators, financiers and owners understand how complicated international tax issues can affect their business,” says O’Sullivan commenting on the importance of the panel.

Aoife’s inclusion on the panel reflects Gates and Partners’ growing presence in the USA, and along with Dan Soffin, US based expert and a founding partner of the firm, is involved in a number of deals including commercial, insurance and business aviation transactions.

“With over 60% of the global executive fleet based in North America, the region remains one of the most influential sectors in the executive aviation industry” says Soffin. “Although the North American market has suffered in the last few years the true value of jets as an essential business tool is once again being recognised.”

Soffin notes that the US remains an extremely strong and competitive market with excellent indicators for a continued upturn in the North American business aviation market. “The dramatic slides of a few years ago began to stabilise in 2010 and we saw a healthy increase in business aviation sales in the Americas this year. Recent transactions demonstrate optimism for continued growth in 2012 remains. However while historically, statistics show that 75% of business jet deliveries have been to North American operators, international demand from emerging markets such as China, Brazil, and India is moving this figure downwards and non-US markets in their growth phase will almost certainly challenge the more mature US market growth,” says Soffin.

Gates and Partners USA transaction experience through the recent downturn suggests that there has been a marked increase in second hand sales and growth in the MRO market. “Pre-owned inventory is definitely shrinking and with that decrease, prices are trending up again. Certainly we are seeing more transactions coming to the table despite current market volatility,” continues Soffin.

Funding still available for right buyers.

Instability in international financial markets continues to make financing aircraft sales a challenge. In 2010, the vast majority of business jet purchases were cash payments and this was certainly reflected in the Gates and Partners deal sheet over that period. However, funding is still available and Gates is also encouraging clients to consider alternative means of finance where standard loan finance is not available.

Soffin suggests lenders are definitely more willing to lend again and ECA and EX-IM funding is more readily available to the business and private jet market. “There are also some very interesting new entrants offering operating and finance leases such as Milestone Aviation,” says Soffin.