Private Equity Owner Predicts Strong Earnings During Crisis

Monocle Acquisition Corporation expects its aftermarket acquisition AerSale to report strong earnings before interest, taxes, depreciation and amortization in both 2020 and 2021
Credit: AerSale

The virus crisis is hitting the bottom lines of most MROs pretty hard now and will for some time to come. But companies that offer the right portfolio of services, especially cargo conversions and storage, can do well in these troubled times. 

Monocle Acquisition Corp. expects its aftermarket acquisition AerSale to report strong earnings before interest, taxes, depreciation and amortization in both 2020 and 2021. Pro forma EBITDA for this year should be $48-$52 million and in 2021 should exceed $53.9 million, the private equity company says. Both figures are above earlier estimates. 

Monocle attributes these strong results, despite the virus crisis, to several factors. First, strong demand for AerSale’s on-airport maintenance. Second, strong demand for cargo and e-commerce, which is yielding more requests for passenger-to-freighter conversions. The company recently bought 24 Boeing 757-200s for conversion and is getting plenty of interest from operators.

Along with airframe and component maintenance, aircraft and engine leasing and used parts, AerSale has desert aircraft parking facilities in Arizona and New Mexico that can store and support up to 650 aircraft. These storage sites offer preservation, on-site MRO, tear-downs, documentation and asset management to carriers with surplus aircraft, of which there are now plenty. 

Monocle President Eric Zahler says he is enthusiastic about AerSale’s results for the first nine months of 2020. AerSale CEO Nicolas Finazzo says, when the virus crisis struck, he adjusted employee counts for the business units experiencing increased demand and increased fulltime employees from 709 to 882.

AerSale’s technical services unit is also preparing for better times ahead when traffic recovers and upgrades are sought. It has been flight-testing AerAware, an advanced enhanced flight vision system that provides flight data and situational awareness on an Elbit Systems head wearable display. AerSale has integrated AerAware on a Boeing 737-800NG.