The continuing decimation of the depressed offshore helicopter market writ large anew earlier this week when GECAS wrote down the value of its Milestone Aviation helicopter leasing unit by $729 million. Milestone holds the world’s largest fleet of Sikorsky S-92 heavy helicopters, used primarily in support of the offshore energy market.
The write-down was revealed this week in GECAS parent GE’s second-quarter 2020 10Q SEC filing in the form of a goodwill impairment. It represents a 41 percent devaluation of the $1.775 billion GECAS paid to acquire Milestone in 2015.
Milestone was founded by former NetJets chief Richard Santulli in 2010 with an initial capitalization of $500 million and based in Dublin, Ireland. It would go on to draw substantial investment from global financial powerhouses, including Lloyds, Barclays, and Lombard, the asset finance division of the Royal Bank of Scotland. Milestone built one of the world’s largest helicopter lease fleets that over the course of its first five years grew to 168 aircraft valued at $2.8 billion. It was quickly joined in the market space by a variety of new competitors, including Waypoint Leasing, LCI Aviation, Lobo Leasing, and Macquarie Rotorcraft Leasing.
The fallout from the 2008 recession and tumbling oil prices has had a lasting overhang on the offshore helicopter business, triggering a crescendo of bankruptcies and consolidations among operators and lessors in recent years.