ISTAT Jetrader - Winter 2020 - 11

MAX/neo aircraft. The portfolio grew rapidly to over 50 aircraft with an average age
of under two years. SKY was sold in September 2018 to Goshawk Aviation, which
was growing its own fleet of attractive recently delivered aircraft.
After Pegasus, the common theme in all the aircraft leasing companies I have
led has been a focus on acquiring young and new aircraft on lease to a diversified
airline customer base. Our experience with private equity ( " PE " ) taught me the
importance of building a portfolio with multiple exit options and not to wait for
the market peak. I want to thank our experienced management team, our airline
customers who have consistently grown passenger traffic, important lenders who
participate in our growth, Boeing and Airbus, who build long life and productive
aircraft, and our PE sponsors.
In October 2019, SKY Management recapitalized a new SKY Leasing by
closing its launch aircraft fund with a commitment of US$300 million from M&G
Investments/Prudential Assurance Company (UK). The current SKY Leasing has a
different business model as an asset manager with the portfolio growing through
a series of aviation funds. The SKY team once again focused on young and new
delivery aircraft to major airlines worldwide. A bank warehouse of US$600 million
was closed in January 2020, led by MUFG and Citi with Morgan Stanley, Bank of
America, Natixis and Société Générale participating.
The pandemic in March 2020 has caused a major capital and aircraft disruption
and the most aggressive decline in passenger traffic during my career. Major airlines
initiated campaigns for sources of cash from their balance sheets and requested
large sale and leaseback bids on recently delivered and new aircraft from the OEMs.
SKY Leasing was in a position to execute quickly on over US$1 billion of aircraft
acquisitions closed or mandated by the third quarter of 2020. The SKY fleet will be
15 aircraft owned in 2020 with currently five aircraft under mandate for delivery
in the first half of 2021. Demand for capital and fleet planning continues at a rapid
pace, so SKY Leasing sees tremendous opportunity to provide a wide range of
investors access to new and younger midlife aircraft opportunities. One of the keys
of my career are the special relationships developed with airlines, lenders, investors
and the aircraft manufacturers. SKY Leasing is quite lucky to have an experienced
senior management team led by Austin
Wiley as CEO, John Duffy as chief
commercial officer, Matt Crawford
as executive vice president of capital
markets, and the rest of the team, who
have been together for many years.

This global effect is the difference
between now and the impacts of 9/11
and SARS. SKY Leasing predicts that
3,000 older midlife aircraft will be
retired and parted out. Airlines will first
use these retirements to adjust fleet
capacity, and many bankruptcies will
happen. Airlines will increase liquidity
or use Chapter 11 or a restructuring out
of court as an effective tool to reduce
aircraft capacity and lower costs in all
areas. SKY Leasing hopes that airlines
can effectively make these moves in
the next two years and again focus on
selling tickets and cargo to a growing
demand. Lessors will need to manage
their liabilities and fleet age, as the
airlines want aircraft that can provide
lower maintenance cost and better
fuel efficiency.
Jetrader: How do you see this crisis
continuing to develop? While airlines
were hit immediately when the world
stopped flying, it appears the impact
on aircraft leasing is delayed. When
do you expect leasing companies to
feel the full impact of the crisis?
RW: The lessors will feel the impact
by the first quarter of 2021. By this
time, the industry may have data

Demand for capital and fleet planning continues at
a rapid pace, so SKY Leasing sees tremendous opportunity
to provide a wide range of investors access to new and
younger midlife aircraft opportunities.

Jetrader: When did you first get
involved with ISTAT?
RW: I have been involved with ISTAT
since the beginning. ISTAT is an
amazing networking organization that
has grown to a size nobody could have predicted. I thank the leadership at ISTAT for
building this organization, which provides valuable tools for airlines, lessors, OEMs
and MROs.
Jetrader: How would you compare the current COVID-19 crisis to earlier
crises, such as the Gulf Wars, 9/11, etc., in terms of impact on the aircraft
leasing business?
RW: The current decline in passenger traffic is unparalleled in history, so lessors
and airlines will need to adjust quickly. The unexpected pandemic macro-event can
be described as global passenger demand and capital disruption at the same time.

as to how fast traffic will return
and what size fleet the airlines
can operate to generate cash and
profits again. Lenders will be doing
more foreclosures. Equity will need
to perform or turn over the keys to
the lender.
Jetrader: Do you expect structural
changes in the air transport market?
Jetrader

* WINTER 2020 * 1 1



ISTAT Jetrader - Winter 2020

Table of Contents for the Digital Edition of ISTAT Jetrader - Winter 2020

ISTAT Jetrader - Winter 2020
From the President
News & Events
Perspectives: Q&A With Rich Wiley of SKY Leasing
Winds of Change
10 Years of Air Shows
ISTAT Foundation
Appraisal: Airbus A330-300 and Boeing 767-300ER
At a Glance: Peter Hopkins
Advertiser Index
ISTAT Jetrader - Winter 2020 - Intro
ISTAT Jetrader - Winter 2020 - ISTAT Jetrader - Winter 2020
ISTAT Jetrader - Winter 2020 - Cover2
ISTAT Jetrader - Winter 2020 - 1
ISTAT Jetrader - Winter 2020 - From the President
ISTAT Jetrader - Winter 2020 - 3
ISTAT Jetrader - Winter 2020 - 4
ISTAT Jetrader - Winter 2020 - 5
ISTAT Jetrader - Winter 2020 - 6
ISTAT Jetrader - Winter 2020 - 7
ISTAT Jetrader - Winter 2020 - News & Events
ISTAT Jetrader - Winter 2020 - 9
ISTAT Jetrader - Winter 2020 - Perspectives: Q&A With Rich Wiley of SKY Leasing
ISTAT Jetrader - Winter 2020 - 11
ISTAT Jetrader - Winter 2020 - 12
ISTAT Jetrader - Winter 2020 - 13
ISTAT Jetrader - Winter 2020 - 14
ISTAT Jetrader - Winter 2020 - 15
ISTAT Jetrader - Winter 2020 - Winds of Change
ISTAT Jetrader - Winter 2020 - 17
ISTAT Jetrader - Winter 2020 - 18
ISTAT Jetrader - Winter 2020 - 19
ISTAT Jetrader - Winter 2020 - 20
ISTAT Jetrader - Winter 2020 - 21
ISTAT Jetrader - Winter 2020 - 22
ISTAT Jetrader - Winter 2020 - 23
ISTAT Jetrader - Winter 2020 - 24
ISTAT Jetrader - Winter 2020 - 25
ISTAT Jetrader - Winter 2020 - 10 Years of Air Shows
ISTAT Jetrader - Winter 2020 - 27
ISTAT Jetrader - Winter 2020 - 28
ISTAT Jetrader - Winter 2020 - 29
ISTAT Jetrader - Winter 2020 - 30
ISTAT Jetrader - Winter 2020 - 31
ISTAT Jetrader - Winter 2020 - 32
ISTAT Jetrader - Winter 2020 - 33
ISTAT Jetrader - Winter 2020 - 34
ISTAT Jetrader - Winter 2020 - 35
ISTAT Jetrader - Winter 2020 - 36
ISTAT Jetrader - Winter 2020 - 37
ISTAT Jetrader - Winter 2020 - ISTAT Foundation
ISTAT Jetrader - Winter 2020 - 39
ISTAT Jetrader - Winter 2020 - 40
ISTAT Jetrader - Winter 2020 - 41
ISTAT Jetrader - Winter 2020 - Appraisal: Airbus A330-300 and Boeing 767-300ER
ISTAT Jetrader - Winter 2020 - 43
ISTAT Jetrader - Winter 2020 - 44
ISTAT Jetrader - Winter 2020 - 45
ISTAT Jetrader - Winter 2020 - At a Glance: Peter Hopkins
ISTAT Jetrader - Winter 2020 - 47
ISTAT Jetrader - Winter 2020 - Advertiser Index
ISTAT Jetrader - Winter 2020 - Cover3
ISTAT Jetrader - Winter 2020 - Cover4
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