Consultancy/Risk Analysis

AVINCO can assist investors or vendors to evaluate the risks and costs associated with buying (or demonstrate such points if selling) single or multi-aircraft portfolio’s or restructuring aircraft related investments. Having worked for a number of investors in evaluating small or medium sized portfolio’s, AVINCO has consistently demonstrated the added value it brings through combining its intimate knowledge of aircraft leases and airline creditworthiness with its unique and highly complex in-house developed lease simulator. The simulator takes into consideration all of the major commercial lease terms, technical status of the aircraft and all financing and residual assumptions to assess the following:

• If buying: the optimum acquisition price for each aircraft on each specific lease in the portfolio.
• If selling: illustrating the main value drivers of each given lease to ensure the potential buyers recognise and compensate for such value
• If restructuring: set out the different scenarios by changing the existing lease terms, releasing the aircraft elsewhere, converting it into a freighter, rescheduling the debt or evaluating an outright sale.

AVINCO’s in-house developed lease portfolio simulator is an IRR-driven aircraft operating lease calculator which predicts all lease-related cashflows and caters for different types of debt / leverage scenarios. It has an automated end-of-lease residual value calculator which is based on information from a number of industry recognised appraisers and corrected for anticipated maintenance condition at lease end.

Maintenance:

• Tracking maintenance costs real time (month-by-month basis during the lease term)
• Includes a full simulation of maintenance reserves
• Forecasts major maintenance events – airframe, engine and major component related
• Highlights maintenance cost shortfalls & lessor (or lessee) maintenance contributions

The Simulator models detailed lease terms such as:

• Rental step-up/down & extension periods
• Economic redelivery conditions
• Reserve treatment (drawdowns, annual escalation, end of lease adjustments etc)

Key Uses:

• Essential aid to find (or demonstrate) value in existing leases
• Extremely useful tool to simulate the economics of new leases: crucial for decisions during lease negotiations

Developed to analyse the economic rationale for converting, if an aircraft is suitable and what price to pay ..

Shows IRR & max equity

Information considered:e for a given asset on a given lease.asing structure. This enables us to understand the customers and market expectations.
PFC/maint costs
Financing
Lease terms
Fees etc
Future use check
Residual value

Also see thumbnail in inactive section of For Airlines : Risk Analysis