Validating and Structuring a Private Aviation Investment for Long-Term Yield

A U.S. family office received an invitation to anchor an USD 8 million raise for Waypoint, an aircraft owner that leases and charters private jets to flight‑training schools and corporate clients. The sponsor’s deck described a fleet of 9 aircraft, almost two decades of operating history, and expansion plans that would double flight‑school leasing revenue during the next five years.

The family office asked Alehar to validate the claims, build an independent financial model, and recommend whether to proceed.

1. Information review and modelling approach

We worked from three sources: the sponsor’s presentation, management interviews, and raw data extracted from maintenance logs, lease contracts, and flight‑hour reports. The pitch showed that flight‑school leasing produced most of today’s revenue, with aircraft brokerage and in‑house maintenance delivering incremental profit. Waypoint expected six additional training‑school customers to join the roster over four years, lifting annual fleet utilisation from about 8,000 flight hours to more than 18,000.

Our model translated utilisation into a full three‑statement forecast. Flight hours drove lease revenue, fuel burn, maintenance cycles, and pilot payroll. Scenario analysis varied the pace at which new schools signed, the achievable lease rate per hour, and residual values for older jets.

2. Findings that supported investment

Even in a conservative case the model showed revenue growing close to 20 percent per year through Year 5 and strong gross margins once scale effects offset incremental maintenance and ferry costs. Debt‑service coverage remained comfortable if hourly rates dipped ten percent below management’s target, giving the family office a safety buffer.

Asset quality was another strength. The fleet included jets which enjoy deep parts availability and multiple exit channels, and the assumed depreciation curve left residual value at 1.3 times outstanding debt by Year 5. That cushion compared well with peer lessors in the light turboprop niche.

Use of proceeds added value beyond growth. Refinancing legacy notes with cheaper senior debt trimmed interest expense by more than USD 600 thousand per year, while funding four additional airframes and a small maintenance base in the Southwest produced a step‑change in capacity without straining overhead.

3. Key risks and mitigations

Execution risk centred on sourcing King Air units at attractive prices. Management’s track record of uncovering undervalued aircraft eased concerns, but the downside scenario still applied a ten‑percent acquisition‑premium. Even under that stress, the internal‑rate‑of‑return projection cleared the family office’s hurdle comfortably.

Fuel‑price volatility was mitigated by pass‑through clauses embedded in new lease templates, allowing quarterly rate adjustments. Potential cuts to Asian flight‑school quotas were considered moderate because government policy statements continue to emphasise pilot‑training expansion.

Alehar recommended that the family office proceed, and the family office went ahead with the investment three months later.

Six months after closing, fleet utilisation already exceeds 10,000 hours on an annualised basis, ahead of the base‑case trajectory. Quarterly reports generated from Alehar’s model give the investors clear visibility into margins, debt coverage, and asset values. Waypoint’s story illustrates how disciplined third‑party diligence, rigorous scenario testing, and carefully structured conditions can turn a promising aviation pitch into a confident, well‑protected investment.