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Friday, May 7th, 2021

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Air T launches aviation asset management vehicle with up to US$408 million equity capital

Air T, an industrious American holding company which operates a group of independent, yet interrelated, aviation businesses, has announced the formation of a new aircraft asset management business called Contrail Asset Management (CAM), and a new aircraft capital joint venture called Contrail JV II LLC (CJVII). The new joint venture has been formed as a scalable asset management platform that complements Air T’s existing operating businesses. The new venture will focus on acquiring commercial aircraft and jet engines for leasing, trading and disassembly. CJVII will target investments in current-generation narrow-body aircraft and engines, building on Contrail Aviation Support's (Contrail) comprehensive origination and asset management expertise.

CJVII will initially be capitalized with up to US$408,000,000 million of equity from Air T and three institutional investor partners, consisting of US$108,000,000 million in commitments and US$300,000,000 million in upsize capacity, contingent on underwriting and transaction appeal. The three investor partners bring significant aviation experience to the joint venture. SRA Capital Partners, a division of Split Rock Aviation, supported Air T in raising the institutional commitments.

“We believe our customers will continue to be well-served by the capabilities that Contrail and Air T bring to the marketplace,” said Nick Swenson, Chairman & CEO of Air T. “Win+Win dynamics emerge when seasoned professionals execute from within a well-capitalized and well-organized operating platform.”

Added Swenson, “Contrail’s track record, market access and management know-how have attracted three very savvy institutional investors. Recognizing the significant challenges and opportunities which our industry faces as we head into the post-pandemic recovery period, our investment partners have shown great confidence in Contrail’s team and we are honored to be working with them. Together with the investor’s substantial financial firepower, our new venture aims to repay that confidence by building a scalable business which meets the many and varied needs of our growing customer base.”

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ABL Aviation arranges leasing finance for two Lufthansa A350-900s

ABL Aviation, the global independent aircraft investment management firm, has closed another Japanese operating lease with call option (JOLCO) arranging the equity portion of two(2) Airbus A350-900s aircraft for Lufthansa. This is the first transaction that ABL Aviation has completed with Lufthansa and was closed in a short timeframe. The financing was secured in April for both A350 aircraft - under three weeks from the date of being mandated and represents the tenth transaction arranged by ABL Aviation since the outbreak of the COVID-19 pandemic.

The deal reflects that Lufthansa’s interest in the JOLCO market is mutual, given the strong preference for first-tier credits by Japanese equity investors. Ali Ben Lmadani, CEO of ABL Aviation commented: “We are delighted to work on this transaction with Lufthansa, one of the world’s leading airlines, offering competitive financing in record time. The deal reflects both ABL Aviation’s innovative approach to finance and resilience with high levels of activity and successful transactions at the beginning of this year, despite ongoing economic uncertainty. It is encouraging to see new capital being deployed in the new aircraft space. We hope it is the first of many deals we deliver with Lufthansa.”

Vortex Aviation inducts first GTF PW1000G engine in New Davie, Florida facility

Vortex Aviation, the global on-wing and quick-turn turbine engine repair organization has reported the induction of the first Pratt and Whitney Geared Turbo Fan (GTF) PW1130G-JM engine at its new Davie, Florida U.S. facility. The induction of the GTF PW1000G series engine adds to the capabilities of the Vortex facility including CFM LEAP 1A/1B, CFM56, IAE V2500 and other commercial jet engines.

Vortex relocated to the new 45,000 ft² state-of-the art engine maintenance facility in the fall of 2020. As a result of this expansion, Vortex Aviation is now able to maximize its capacity to support the entire next-generation of narrow-body fleets of A320 NEOs and 737 MAXs, plus regional fleets such as the A220, E190, and E2/E195-E2 powered by GTFs while continuing to support the older generation of turbine engines.

Vortex maintains its long-running certification approvals as a licensed quick-turn engine service and repair shop to support major OEM engine models such the CFM, GE, Roll Royce, IAG, and PW.  Vortex will continue to provide full-service support to operators, owners, and lessors with the same responsive and cost-effective standards for which it has been known for within the industry.

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EFW and ST Engineering welcome GTLK Euro as new A321P2F customer

Against the backdrop of strong demand in the air global market, ST Engineering and Airbus’ joint venture, Elbe Flugzeugwerke (EFW), have received an order for four Airbus A321 Passenger-to-Freighter (P2F) conversions from new customer, GTLK Europe, a top-tier global leasing company based in Dublin, Ireland. Three of the four aircraft will be inducted for conversion this year, with the fourth conversion to be carried out in 2022.

The A321P2F is the first in its size category to offer containerized loading in both the main  and lower decks (up to 14 and 10 container positions, respectively.) With a generous gross payload capability of up to 28 metric tons (about 61,800 lbs) over 2,300 nautical miles, the A321P2F is the ideal narrow-body freighter aircraft for express domestic and regional operations.

To meet the rising global demand for dedicated freighter aircraft, ST Engineering and EFW introduced a conversion site in China at the end of 2020 and will be setting up another site in the U.S.A. in 2021. Expansion plans are also in the works to support the rising demand for the wide-body A330P2F program, which is currently carried out at EFW’s facility in Dresden, Germany.

GA Telesis signs tooling distribution agreement with GMI Aero

GA Telesis (GAT) has come to an agreement with Paris-based GMI Aero to become a global distributor for their extensive product line of composite repair tooling, heating, and bonding equipment. This partnership is an essential addition to the growing offerings of GA Telesis’ Tarmac Solutions team to supply airlines and MROs with critical tools to maintain and support their fleets.

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Astronics Corporation reports 2021 first-quarter financial results

Astronics Corporation, a leading supplier of advanced technologies and products to the global aerospace, defense, and other mission critical industries, has reported financial results for the three months ended April 3, 2021.

First-quarter revenue was US$105.9 million, down 32.8% from the comparator period of 2020. The company incurred a net loss of US$11.9 million and an adjusted EBITDA loss of US$0.5 million, or 0.5% of sales. The Company evaluates three revenue streams to monitor demand and analyze the impact of the pandemic to its business. These are (1) the commercial aircraft market, which includes OEM line fit and airline aftermarket business, (2) defense and other government markets, and (3) general aviation.

Commercial aerospace continues to be heavily impacted by the pandemic and was US$38.2 million, or 36% of total revenue in the quarter, compared with US$102.8 million, or 65% of total revenue in the first quarter of 2020. Narrow-body aircraft build rates are expected to improve through 2021 from current levels as production of the 737 MAX picks up. The aftermarket is expected to strengthen over the course of the year as aircraft utilization and load factors increase.

Defense and government markets, including military aircraft sales and test segment sales, have remained strong through the pandemic. Sales to these markets were US$45.4 million, or 43% of first-quarter revenue in 2021, up from US$33.0 million, or 21% in the comparator period of 2020. General aviation sales were US$14.0 million, representing about 13% of first-quarter revenue in 2021. This compares with US$15.0 million, or 10% of revenue in the comparator period.

Most of general aviation revenue is line fit production driven by the manufacture of new aircraft, although there is some amount of aftermarket business as well. Demand for private aircraft has recovered quickly and is expected to result in higher aircraft production rates in the near future. Other revenue was about 8% of total revenue in the first quarter of 2021.

PSA Airlines selects Aeroxchange to digitally strengthen its procurement and repair order processes

PSA Airlines, a wholly-owned subsidiary of American Airlines, has selected AeroBuy® and AeroRepair® to increase supply chain transparency, accelerate order fulfillment and improve trading partner collaboration.

AeroRepair and AeroBuy are subscription-based applications designed to digitally streamline procurement and repair order processes. By leveraging AeroBuy and AeroRepair, PSA Airlines will gain a comprehensive order management and tracking system that will provide enhanced real-time visibility into its entire purchase and maintenance order lifecycles.

With most of its high-volume trading partners already connected to both applications, upon implementation, PSA Airlines will instantly be able to begin tracking supplier lead times and measuring repair turnaround time performance.

Farsound to provide on-wing and in-field engine maintenance kits for HAECO Group

Farsound has announce a new collaboration with the Global Engine Support division of the HAECO Group, providing consigned kits for on-wing and in-field engine maintenance.

HAECO is one of the world’s leading independent aircraft engineering and maintenance groups. It is also one of the largest maintenance, repair, and overhaul (MRO) service providers in terms of capacity.

Through its 16 operating companies around the world, HAECO Group offers a full spectrum of services including airframe services, line services, component services, engine services, inventory technical management, fleet technical management, cabin solutions, private jet solutions, freighter conversion, parts manufacturing, and technical training.

Farsound directly provides advanced kitting solutions for different engine platforms to assembly lines, providing all parts at a single location.
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Tamar Jorssen
Vice President Sales & Business Development
Email: tamar.jorssen@avitrader.com
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Tamar