At a glance
- The August transaction gives Apollo access to Atlantic Aviation's more than 100 fixed-base operations across the U.S., as well as its hangar and office space.
- For allocators, the three transactions are three different exposures: an operating FBO platform with more than 100 sites, an aircraft leasing program that buys planes on lease to airlines, and ground-up hangar development.
- Blackstone's Equator, a long-term global aircraft leasing investment program launched in April, targets approximately $1.6 billion to purchase commercial aircraft on lease to leading global airlines.
Apollo Global Management acquired a significant stake from KKR in Atlantic Aviation, a private jet fixed-base operator, in a deal valued at nearly $10 billion, Commercial Observer reported Nov. 12.
The August transaction gives Apollo access to Atlantic Aviation's more than 100 fixed-base operations across the U.S., as well as its hangar and office space. An FBO is a business granted rights to act as the primary service provider to general aviation aircraft operators.
For allocators, the three transactions are three different exposures: an operating FBO platform with more than 100 sites, an aircraft leasing program that buys planes on lease to airlines, and ground-up hangar development. The split between contracted lease income and revenue tied to flight activity is likely the figure that separates one of those exposures from another.
Blackstone's Equator, a long-term global aircraft leasing investment program launched in April, targets approximately $1.6 billion to purchase commercial aircraft on lease to leading global airlines. The program is a joint venture between Blackstone and Dubai Aerospace Enterprise. SomeraRoad broke ground in October on a hangar facility redevelopment in Las Vegas through its subsidiary SR Aviation Infrastructure. SRAI works on both development and acquisition deals for airplane hangars.
Nicholas Carney, a partner and head of the infrastructure sector at law firm HSF Kramer, told Commercial Observer that a class of investors wants assets with infrastructure-like cash flows. "There's clearly a class of investors that are interested in assets that have infrastructure-like cash flows and returns, so long-term steady returns over a long period of time," he said. Airports are one example, he said, because it is not easy for a competitor to build a rival to JFK Airport down the road.
Marc Ricks, chief executive of Avports, a U.S.-based airport management, operations and development company, described the appeal in similar terms, citing "stable, very long-duration returns." He said air travel demand "tends to grow at a pretty steady pace" over a very long period.
There's clearly a class of investors that are interested in assets that have infrastructure-like cash flows and returns, so long-term steady returns over a long period of time.Nicholas Carney, partner and head of the infrastructure sector at HSF Kramer
Reported by the Sectors desk from Commercial Observer. Published . Corrections