BIIA member Ascend, the leading aerospace information business, was effectively refinanced last week, and at the same time launched an innovative aircraft industry standard ratings system. 

Notwithstanding grounded aviation and the global recession, the aircraft leasing business is still an important industry.  Anyone interested in investing in aviation assets needs to know the history of the asset and its performance characteristics.  Ascend has exploited an important market niche, secured refinancing and launched an innovative aircraft rating service.  The rating services permits unique insight into current and future drivers of an aircraft’s likely value performance across a variety of market and macro-economic conditions. Aircraft Ratings will, for the first time ever, provide a clear statement of an aircraft’s investment merits.

  1. Forecast for two key variables for an aircraft:  Expected Depreciation and Implied Downside Volatility
  2. Analysis covering historical price movements, GDP, oil price, inflation, aircraft fleet size, and noise and regulatory compliance
  3. Ratings for over 70 aircraft types
  4. In-depth reports documenting the rationale behind the rating 
  5. Meaningful insight into current and future drivers of the aircraft’s expected value performance 

Aircraft Ratings supports growing demand for increased scrutiny in calculating risk. It provides a credible companion to Ascend’s industry-standard Base Value forecast, enabling a comprehensive understanding of an investment’s risk. By splitting expected annual depreciation from potential downside volatility, Aircraft Ratings gives investors a clear statement of an aircraft’s investment merit. Aircraft Ratings will serve as a unique metric for making “apples to apples” relative value comparisons between aircraft investment options.

In providing refinancing LDC (Lloyds-TSB Development Capital) has effectively doubled its investment in Ascend.  Having put in some GBP 10 million during 2005 to support the buy-out of the original loss-adjuster Airclaims business of which Ascend, rebranded and relaunched in 2006, was then a part, LDC now has an investment of GBP 12m in the Ascend side of the business. 20% per annum growth over the past three years and the development of significant new contracts through its new offices in Hong Kong (China is now a key growth market); New York and the City of London give real cause for post-recession optimism. 

David Worlock writes in his recent Outsell Insight:  In battered and bewildered post-recession market places like the aircraft industry, where merger mania in the US and in Europe creates conditions of change, refinancing and then post-recessionary growth tend to create interesting information market opportunities. The strongly entrepreneurial team at Ascend, without the legacy magazine markets of RBI or McGraw-Hill in this sector; were able to take a clear aim at a valuable core requirement in valuation and financing, and then define and fill it completely. In this sense, this is a case study of how the B2B information marketplace regenerates itself. In another sense it illustrates the huge opportunities that still exist for niche players if they are able to concentrate tightly on initially limited objectives.

Source: Outsell Insight and Ascend Website

BIIA Newsletter April II – 2010 Issue