Interview: Ex-CIT staff set up new platform
Former staff of US-based lessor CIT Aerospace have set up a new lessor called Zephyrus Aviation Capital, the start-up’s chief executive officer (CEO) tells Airfinance Journal.
Damon D’Agostino, previously chief commercial officer at CIT Aerospace, will be the CEO of the new lessor. Tony Diaz, the former CIT Aerospace president, will be the non-executive chairman. Robert Meade, CIT’s former head of marketing, will be chief commercial officer and Richard Genge, CIT’s former assistant vice president – marketing & asset sales, will be vice president.
The lessor will have offices in Dublin and Fort Lauderdale.
Zephyrus has a starting portfolio of 21 mid- to end-of-life aircraft, which it bought from an undisclosed lessor. The portfolio includes Airbus A319s, A320s, A321s, three A330s, Boeing 737-700s and 737-800s. The aircraft have an average age of 13 years.
“CIT was one of the major A330 lessors. We’re really comfortable with used A330 as an aircraft type and are quite bullish on its value in the market,” says D’Agostino.
Approximately a third of the lessees in the portfolio are from Asia, slightly less than a third are European and the rest are from North America and South America.
Virgo Investment Group, in which Diaz has been the operating partner, recently is the majority equity partner in the platform. Seabury Capital acted as sole adviser to Zephyrus for the initial portfolio and is a minority equity partner.
Deutsche Bank led the debt financing for Zephyrus.
D’Agostino declines to reveal how much equity and debt the company has access to, but says that it intends to “grow to 60-75 aircraft in the next 12-18 months.”
D‘Agostino says acquiring new narrowbodies and widebodies “didn’t feel like the right space”.
“In my own mind we landed on mid to late life space; it really kind of speaks to my background at 24 years plus a CIT, really understanding the metal not just as a financial trade.”
Virgo has been investing in aircraft since 2012 under the name of “Zephyrus”, which inspired the name of the new lessor, says D’Agostino.
“Zephyrus is actively pursuing new opportunities – if we have the right deals that come along, we will transact. We’re in discussions with a number of other parties on aircraft to grow the business.
“One of the things that Deutsche Bank really liked was the experience of the management team, the fact we’ve been together as a team for decades.”
D’Agostino adds: “We see an opportunity in this space, as there’s not as much competition as the new and nearly new aircraft market. Other players in this space have raised a lot of capital, but also seem to be gravitating toward slightly younger aircraft now. You have seen that in recent ABS deals. That creates a nice space for us and it plays to our experience and skill set. We believe that with our background and capital we can add value to the airlines and other industry constituents as a fleet management solutions provider.”
“We are extremely pleased to assist Zephyrus in acquiring tangible aircraft assets that are used by the real economy for the benefit of passengers," says Michael Halaby, head of aviation/land transport debt origination EMEA at Deutsche Bank.
"We strongly believe in the management team and its strategy and are pleased to support it. Deutsche Bank was able to use its key product teams to work in unison in order to assist the financing of this portfolio.”