Strong Economic Growth in India Will Fuel Business Aviation Market

June 28, 2016
New research from Global Jet Capital reveals that over the last decade (2006-15), 70 mid to heavy business jets were delivered to India, with a combined value of around $3.5 billion.

Global Jet Capital, a provider of financing solutions for large-cabin, long-range business jets, expects demand for business aviation in India to increase as a result of the country’s strong economic growth. 

Simon Davies, Vice President, Sales – India at Global Jet Capital is currently in India meeting prospective clients who are looking for finance to support potential acquisitions of mid to heavy business jets.

New research (1) from Global Jet Capital reveals that over the last decade (2006-15), 70 mid to heavy business jets were delivered to India, with a combined value of around $3.5 billion. 

Global Jet Capital says these aircraft typically cost between $25 million and $75 million each, and up to 80% of the funding used to purchase these is sourced through external financing.  The Indian business aircraft fleet has a greater proportion of mid-sized to heavy jets than the global average(1).  44% of the Indian fleet is classed as mid-sized to heavy, compared with a worldwide figure of 31%, indicating that demand for finance from Indian buyers is likely to be greater than from other regions.

The aviation finance specialist, which recently completed the purchase of the aircraft lease and loan portfolio of GE Capital Corporate Aircraft in the Americas representing approximately $2.5 billion of net assets, has around $1 billion to lend to clients to purchase relevant business aircraft in India and elsewhere around the world.

Simon Davies, Vice President, Sales – India, Global Jet Capital said: “For the fiscal year 2015 – 2016, India’s GDP growth was around 7.6% (2), and some market commentators are predicting that growth will gain momentum in 2016 – 2017, with GDP growth of around 7.8% (2).

“Demand for business aviation is closely correlated to economic growth so we believe long-term, India will see a significant increase in demand for business jets.  This is already a very attractive market for us, and we expect it to become even more appealing in the coming years.”

Global Jet Capital, which was launched in 2014, is capitalized by three global investment firms – GSO Capital Partners, a Blackstone company in partnership with Franklin Square Capital Partners*; The Carlyle Group; and AE Industrial Partners.

The company’s current management team and executive committee is composed of leaders from business jet manufacturers, maintenance and service providers and leading financial institutions who have served the private aircraft industry for a combined 200-plus years and have completed over 3,500 aircraft transactions. 

(1)   Global Jet Capital analysis of JetNet data, June 2016

(2)   DBS, June 2016

Global Jet Capital

With $2.5 billion in assets under management and the additional current committed capacity to lend $1 billion, Global Jet Capital provides financing solutions for the private aircraft market. The company is capitalized by world-class private investors with expertise in the global aviation industry: GSO Capital Partners, a Blackstone company, in partnership with Franklin Square Capital Partners, The Carlyle Group and AE Industrial Partners. The Global Jet Capital management team has served the private aircraft industry for a combined 200-plus years and has completed over 3,500 aircraft transactions.  The company has the expertise, financial strength, industry relationships and infrastructure necessary to offer a variety of flexible financing solutions at the speed the market requires. www.globaljetcapital.com

GSO Capital Partners and Franklin Square Capital Partners

GSO Capital Partners, with approximately $81 billion in assets under management, is the credit platform of The Blackstone Group, a leading global institutional alternative asset manager, with assets under management of approximately $334 billion**. Franklin Square Capital Partners is a leading manager of alternative investment funds designed to enhance investors’ portfolios by

providing access to asset classes, strategies and asset managers that typically have been available to only the largest institutional investors. Franklin Square manages approximately $17.0 billion** in assets. Franklin Square’s funds are currently sub-advised by GSO or its affiliates. www.blackstone.com/gso 

* Investment to be made by funds sub-advised or advised by GSO Capital Partners and Franklin Square Capital Partners or their respective affiliates, as applicable.

** As of September 30, 2015

The Carlyle Group

The Carlyle Group (NASDAQ: CG) is a global alternative asset manager with $188 billion of assets under management across 126 funds and 160 fund of funds vehicles as of September 30, 2015. Carlyle’s purpose is to invest wisely and create value on behalf of its investors. Carlyle invests across four segments – Corporate Private Equity, Real Assets, Global Market Strategies and Solutions – in Africa, Asia, Australia, Europe, the Middle East, North America and South America. Carlyle has expertise in various industries including aerospace, defense and government services; consumer and retail; energy; financial services; healthcare; industrial; real estate; technology and business services; telecommunications; and media and transportation. The Carlyle Group employs more than 1,700 people in 35 offices across six continents.

www.carlyle.com

AE Industrial Partners

AE Industrial Partners is a private equity investment company founded in 1998, by David Rowe and his late father, aviation pioneer Brian Rowe, to make direct investments in aerospace, power generation and specialty industrial companies. Today AE Industrial is led by 11 partners with each having an average of over 30 years of relevant operating and direct investment experience.  AE Industrial is focused on investing in precision component manufacturing, distribution, MRO (maintenance, repair and overhaul) and industrial service-based businesses that are strategically important to their market places. AE Industrial has invested in over 30 companies including: Aviall, Dynamic Precision Group, Grand Prairie Accessory Services, Landmark Aviation, Kellstrom Materials and Belcan Corporation. 
www.aeroequity.com