Airlines and Aviation
Buchler Phillips (“BP”) has secured a unique joint venture with Airline Management Group (“AMG”), a UK company offering the aviation industry a wide spectrum of business expertise from experienced practitioners to address the complicated and critical challenges it faces.
Over many years, if not decades, the airline industry has consistently failed to deliver shareholder value. Whilst there are a few notable exceptions, airlines generally are not profitable. The industry is requires very specific expertise, from engineering to commercial, finance to operations. The complexity is wide and deep, utilising multiple skills to maintain the safety ethos as well as management and leadership skills to operate a usually sizeable business. Despite the prevalence of such skills in most airlines, the industry struggles to secure financial longevity and sustainability. It is exposed to numerous market and external forces and as such, the industry finds itself continually striving to manage change.
Not surprisingly, Covid-19 exacerbated the financial fragility of the aviation industry. Whilst the market is gradually recovering, revenues from trading are expected to be insufficient to help battered balance sheets – IATA estimates that airline industry debt levels increased by more than $220bn to over $650bn during the pandemic. This enormous burden is compounded by ongoing cost pressures, exacerbated by war in Europe, global inflation, higher interest rates, and a requirement to focus on investing in a net zero future.
AMG and BP combine operational, strategic, and financial restructuring skills that enable stakeholders to successfully address many of the deeply rooted issues affecting the industry. AMG provides a unique service of not only demonstrable skills in understanding the issues, but the key implementation dexterity necessary to deliver success. Our partnership provides the critical balance between operational and commercial implementation experience with the intellectual understanding and strategy to structure the balance sheet. This combination is a key differentiator in securing a sustainable outcome for airline and aviation businesses in need of help.
Together, AMG and BP are able to undertake successful turnaround, performance improvement and start-up projects worldwide. AMG has hands on experience at Board and C-level of developing and implementing complex airline and aviation strategies globally. BP, meanwhile, has a very long history in financial restructuring: the reorganisation of a business’s assets and liabilities to reach an appropriate and sustainable position. We at BP can assist in debt-for-equity swaps or re-capitalisations, capital raising through its venture capital strategic partners and managing exits or return of capital through a solvent winding up process.