Air T Launches Aviation Asset Management Vehicle With Up To $408M Equity Capital

Denver, NC – May 6, 2021 – Air T, Inc. (NASDAQ: AIRT), an industrious American holding company which operates a group of independent, yet interrelated, aviation businesses, today announced the formation of a new aircraft asset management business called Contrail Asset Management (“CAM”), and a new aircraft capital joint venture called Contrail JV II LLC (“CJVII”). The new joint venture has been formed as a scalable asset management platform that complements Air T’s existing operating businesses. The new venture will focus on acquiring commercial aircraft and jet engines for leasing, trading and disassembly. CJVII will target investments in current generation narrow body aircraft and engines, building on Contrail Aviation Support, LLC (“Contrail”)’s comprehensive origination and asset management expertise.

CJVII will initially be capitalized with up to $408,000,000 of equity from Air T and three institutional investor partners, consisting of $108,000,000 in commitments and $300,000,000 in upsize capacity, contingent on underwriting and transaction appeal. The three investor partners bring significant aviation experience to the joint venture. SRA Capital Partners, LLC, a division of Split Rock Aviation, supported Air T in raising the institutional commitments.

“We believe our customers will continue to be well-served by the capabilities that Contrail and Air T bring to the marketplace,” said Nick Swenson, Chairman & CEO of Air T, Inc. “Win+Win dynamics emerge when seasoned professionals execute from within a well-capitalized and well-organized operating platform.”

Added Swenson, “Contrail’s track record, market access and management know-how have attracted three very savvy institutional investors. Recognizing the significant challenges and opportunities which our industry faces as we head into the post-pandemic recovery period, our investment partners have shown great confidence in Contrail’s team and we are honored to be working with them. Together with the investor’s substantial financial firepower, our new venture aims to repay that confidence by building a scalable business which meets the many and varied needs of our growing customer base.”

Contrail CEO Joe Kuhn commented: “The addition of our investor partners will allow Contrail to assist our airline and MRO customers to grow stronger through the current environment with a more diverse array of offerings that include mid- to end-of-life aircraft and engine leasing and trading. This more robust platform complements over 20 years of experience as a leader in the engine USM space and positions Contrail squarely on the growth track.”

Steve Welo, Partner, SRA Capital Partners, stated: “Air T represents a unique platform of operating companies that provide investors with access to asset management and optimization throughout the aircraft life cycle. Moreover, the Contrail team has generated attractive risk-adjusted returns for several years by actively managing narrow body aircraft on lease through part-out.”

“We are excited to partner with Air T and Contrail to support their growth as the aviation industry navigates the historic challenges caused by the global pandemic. Their talented professionals have decades of aviation asset management experience and have built a sophisticated and scalable platform. Under the stewardship of Contrail’s highly experienced team, this specialized asset class has the potential to drive high returns in a unique sector of the market,” said one investor.

Another investor commented, “We are excited to partner with the experienced team at Contrail, their successful track record, strong customer relationships, and unique asset management capabilities will provide opportunities with MRO, OEM, and lessor partners to work collaboratively on end-of-life aircraft solutions.”

The third investor stated, “We look forward to a long-term partnership with Contrail. Contrail brings experience, investment discipline and a creative perspective on asset management that differentiates in a competitive environment. Aviation has faced immense adversity, but we believe that unique opportunity lies ahead for us and Contrail in this venture.”

Contrail helps its customers achieve their financing, fleet transition and optimization objectives through leasing and trading of aircraft, engines, and used serviceable material. We understand the intrinsic value of mature aircraft both from an operations as well as financial and maintenance point of view. Tell us about how we can support your requirements: trading-leasing@contrail.com.