Cayman Islands-based Aviation Management Services (AMS, Booth C11022) and MLR Worldwide Aviation Services (MLR) have entered into a new business relationship focused on the leasing aspects of aircraft ownership and management. The deal brings a company specializing in business aviation (AMS) into close cooperation with one focused primarily on airlines (MLR).
“We’ve developed a new offshore leaseback program, geared mostly for the U.S. market, but it can be applied to Canada too,” William Mermelstein, CEO and founding partner of AMS, said on Monday at NBAA 2017. “It meets all the current FAA and IRS regulations.”
He explained that while AMS specializes in “all aspects of aircraft ownership,” offering fixed-price programs, MLR brings capabilities in the planning and audit aspects of commercial aircraft management, the oversight and scheduling of maintenance and lease inspections.
Mermelstein introduced Marvin Ruthenberg, president and CEO of MLR Worldwide Aviation Services, saying, “Marvin and I have teamed up. We’re focusing towards the leasing part of the business,” in particular head-of-state and royal flights and other non-airline users of large commercial aircraft, where aircraft managers require in-depth knowledge both of air transport aircraft and private operations.
Ruthenberg told AIN his company could check the lease and help audit the aircraft, do a pre-lease inspection and check contracts. “The most important part of the lease is the return conditions–in many cases people overlook them and it really can come back to bite the operator. Many times we have to clean up the mess.”
He explained that many owners of aircraft don’t understand their own flight departments. Mermelstein said, “AMS helps the owner through the process of getting registration, addressing airworthiness issues.”
It also offers financial due-diligence audits that take a few days but are very thorough, with a report provided a month or so later. This has proven particularly popular where the entity owning the aircraft doesn’t fully understand its flight department. “Forty percent of an audit is financial and is about educating the finance people,” said Mermelstein.
An example could be where those overseeing the finances think they are running things at a low cost, but they don’t realize—not having in-depth knowledge of aircraft management—that there is no provision for a maintenance reserve. This could mean there’s a $2 million bill for a repair just around the corner, explained Mermelstein.