• Asset management takes the forefront

By Sangeeta Saxena

New Delhi. 24 June 2024. “We have served the Indian aviation industry successfully for several years and are keen to offer our industry leading asset management services to Indian banks as they actively explore financing of aircraft” informed Vinamra Longani, Head of Business, Asia and Middle East, SGI Aviation in a conversation with Editor Aviation & Defence Universe (ADU) Sangeeta Saxena.

ADU. Yours is an asset management company, you said, so what does it do?

VL. SGI is an engineering company at heart. We are one of the largest technical advisors to the global aviation industry. SGI offers a wide spectrum of services to lessors, financiers, airlines, MRO’s and civil aviation regulators. These include asset management, technical, regulatory, remarketing and engine related services.

Our asset management team manages 50 aircraft and two dozen engines, mostly for financial institutions. The vast majority of them are wide body aircraft, including numerous A380’s.

ADU. Do you have tie-ups with the MROs? What are the other services you offer?

VL. By virtue of the sheer volume of work we do globally, we have relationships with all leading MRO’s. This includes engine MRO’s. As airlines extend leases of aircraft due to delays with deliveries and supply chain issues, our in-house engine team, qualified on all engine types currently flying, have been busy managing engine shop visits.

And while redeliveries may have slowed down, they are a key service offered by SGI. We transitioned 40 aircraft in 2023. In addition to this, we source aircraft and also remarket aircraft.  Last year SGI remarketed the maximum number of Boeing 777 aircraft in the world. I’m not at liberty to reveal names of our clients, but these remarketing mandates were given to SGI by large global financial institutions. Given our end-to-end remarketing solution i.e., technical services, remarketing, transition of the aircraft and continued asset management, SGI is well placed to service such clients.

In addition to this, we also offer consultancy / auditing services to MRO’s, civil aviation regulators and airlines. For MROs, we benchmark their processes, operations, contracts, etc to the best in the world and advice on how to achieve efficiencies. For civil aviation authorities, we provide bespoke training to enhance efficiency, airworthiness process support, regulatory and safety gap analysis, quality / safety management processes and protocols support. We offer similar safety / quality related advisory services to the airlines too.

ADU. Does that mean you have your in-house legal team to do those contracts?

VL. SGI is a global company with offices in Amsterdam, Singapore, Guernsey and Florida. In addition to this, we have SGI managing representatives in China, India and South America. Given the legal complexities of serving clients in numerous jurisdictions, we have an in-house legal team based out of our HQ in Amsterdam who deal with all contracts. For contracts where local law advice may be required, we reach out to our partner law firms in the relevant jurisdiction.

ADU. And what is your Indian story?

VL. India has been a key market for SGI for many years and we intend to grow our India business further. We have transitioned a significant number of aircraft out of India for lessors and financiers. We have also been involved in recent insolvencies on behalf of our lessor clients.

Among other projects, SGI assisted a large global conglomerate in the technical due diligence for the acquisition of an airline in India. This involved inspecting a significant number of aircraft within a record period of time and preparing valuation reports for each aircraft.

ADU.  All right, do you manage assets only digitally or do you also manage assets physically?

VL. The day-to-day technical management of an asset such as an aircraft or engine acquired by way of lease is done by the line maintenance team of the airline. Asset manager’s such as SGI have oversight on what is being done by the airline to ensure contractual obligations are being met and that the value of the asset is being maintained at all times.

ADU. Right, in US you have a concept of asset management companies also managing the graveyard of aircraft, which also means that when you’re tearing them apart, and you’re getting on the parts, a lot of them are reusable or not reusable, how do you, all that is also done by asset management companies, is that something which is also a part of your company’s activity?

VL. We don’t own any assets or graveyards. We do however provide our customers with end-of-life planning for their fleets. Is the aircraft ideal for a freighter conversion or would it offer better value if parted out? Once these decisions have been made, our remarketing team will secure the best deal for the customer.

As you mentioned graveyards, let me tell you, without taking names of course, that we have been involved in managing deliveries of numerous aircraft which were parked at graveyards for pro longed periods of time primarily due to the pandemic. In fact, our Americas team, is working on one such project as we speak.

As told to Sangeeta Saxena