Airbus Shapes a New Business Model for the C295: Expand the Global Fleet Through Working with a Leasing Company
2017-07-13 By Robbin Laird
The C295 has become a global asset.
With nearly 200 aircraft already sold and operating worldwide, the C295 is gaining traction as a global aircraft.
This is in significant contrast to the C-27J, which has been purchased by a much smaller number of nations and therefore does not have the same kind of global presence.
Now with a new business model, namely selling the aircraft to a leasing company, the number of global users will expand and current users could add operating hours through a lease option.
The leasing company involved is Acasta Enterprises Inc., which is a Canadian public company and has signed a firm order for 12 C295 transport aircraft.
One of the key elements within Acasta is the Stellwagen Group which is described by the Acasta website as a “fully-integrated provider of asset management, technical management and fleet and capital financing solutions to the global aviation industry and its investors.
Stellwagen was formed in 2013 to fill a gap in the aviation finance market following the financial crisis. Since then, Stellwagen has also expanded into aircraft servicing and investment management.”
Geoff Beattie, Chairman of Acasta, said: “This game changing agreement with Airbus for the unique C295 will transform Stellwagen, it also validates its business plan, demonstrates continued industry innovation and leadership and positions the Group to further develop the commercial market.”
Stellwagen Chief Executive Officer, Douglas Brennan said: “The C295 is a remarkably capable and versatile aircraft.
We have intensively studied the potential for its use in all civilian and humanitarian operations and we look forward to working with Airbus and operators throughout the world.”
Last year, Stellwagen hired the former Rynair deputy CEO to become the CEO of the Group.
According to The Irish Times:
The former deputy chief executive of Ryanair, Howard Millar, is set to join aviation financing group Stellwagen with plans to raise $1 billion in capital to provide secured aircraft financing to airlines across the globe.
Mr Millar will take up the position of chief operating officer of the Stellwagen Group, which includes the Dublin based Aviation Finance Company as well as Seraph Aviation Management . Mr Millar will also serve as chief executive of Stellwagen Capital, the credit investing arm of the group, focused on credit-oriented investment strategies in industries.
Mr Millar spent almost 23 years with Ryanair as deputy chief executive and chief financial officer before stepping down in October 2014.
Douglas Brennan, chief executive, said that Mr. Millar will work closely with him “to drive the operating and financial performance of the group”.
“As CEO of our new subsidiary Stellwagen Capital, Howard will lead this innovative financing vehicle in raising capital from both the debt markets and from large institutional investors mainly, in Europe and the US. This capital will enable the group to provide secured aircraft financing to airlines across the globe. This is a big step forward in the evolution of the group and we expect Stellwagen Capital to launch its initial capital raise of $1 billion in Q4 2016.”
Mr Millar said he was “delighted” to join the Stellwagen Group, pointing to a “great opportunity” to raise significant amounts of capital to finance the world’s growing fleet of aircraft.
“ The initial capital raise of $1 billion is slated for Q4 2016, and we expect to raise up to $5 billion over the next three years. We will use innovative and highly efficient structures to raise capital for secured financing of both new and delivered aircraft, and generate significant returns for our investors.”
And now with this new agreement, the Group is reaching into the security and para-military market with a leasing approach.
As mentioned in the press release, a natural client might well be organizations involved in humanitarian operations, such as the United Nations, which need to use aircraft for core missions but do not operate those aircraft themselves.
By setting up a leasing arrangement, then operations and support can be provided to the client on a long term lease or perhaps fly by hour agreements with an overlapping set of clients with common operational needs.
This fits the core business of Stellwagen in a way that it would not for the current structure of Airbus Defence and Space.
Airbus has sold two aircraft to Ghana and one to Mali but with the new lease approach those African countries, which bought the aircraft as much to work with the UN as to serve national needs can expand their access to broader fleet operations through leasing opportunities.
The expanding capability of the C295 into the search and rescue area such as demonstrated in the Canadian and Brazilian sales can also provide a para-military or security market opportunity for the leasing approach as well.
If a fly by hour approach could be shaped for a consortia to meet additional surge requirements might be met by a leasing agreement as well.
In short, this is an exciting development for the para-military and military market, which can expand the global presence of a flexible multi-mission aircraft, namely, the C-295.
And the new model will enhance the numbers of C-295s in the global operating environment, which in turn can help strengthen the overall sales and support approach for Airbus Defence and Space as well.
Editor’s Note: The slideshow highlights the delivery of the C-295 to Brazil and the photos are credited to Airbus Defence and Space.
For a look at the Canadian C-295 acquisition, see the following: