Arguably all airlines should, by now, be targeting millennial’s as the next generation of flyers, but Air France has launched its marketing campaign for new budget carrier Joon as specifically targeting the millennial generation – aged between 18-35. It the hot new focus for most marketing shops and the millennial phenomenon has spurred any number of white papers from consultancy shops on how firms can attract and retain millennial talent and how to sell to this generation of individuals weaned on smart phones and social media. Their short attention spans seem to dominate many theses but Air France’s initial blurb on Joon rather draw attention to their “positive state of mind” and “opportunistic” nature, who “know how to enjoy every moment and are in search of quality experiences that they want to share with others”. Few details have emerged on how exactly Joon will attract this pool of flyers – selfie sticks as standard? Virtual flight attendants? Thankfully, over 40s will be allowed to fly, one spokesperson is quoted as confirming! (See the next issue of Airline Economics, which features its annual 40 under 40 list, which celebrates the most outstanding millennials from the commercial aviation industry).
Seriously though, Joon is part of a new wave of start-up carriers from flag carriers seeking to overturn the established low-cost giants in Europe. Since the new French carrier will use a combination of single-aisle Airbus A320s and long-range twin-aisle A340s and A350s, its likely to compete with Norwegian and Level on long haul routes. It will be interesting to see how it fares in this competitive marketplace.
Meanwhile, Goshawk has completed its second issuance of unsecured notes to institutional investors in the US private placement market. The deal was launched as a $100 million senior notes issuance but was upsized to $566.5million thanks to strong market demand. This is understood to be the largest ever US Private Placement issuance by an aircraft lessor.
The average tenor was over 8.5 years, with four tranches split between 7, 8, 9 and 10 year tenors. The pricing of the transaction was completed late June with closing and funding in early July. Proceeds from the notes will be used for aircraft acquisitions and general corporate purposes.
The joint lead agents were Citibank, Crédit Agricole CIB, Natixis and HSBC. BNP Paribas was a co-lead agent. O’Melveny & Myers acted as Goshawk’s legal counsel while Greenberg Traurig Maher LLP acted as the investors’ legal counsel.
Anand Ramachandran, CFO of Goshawk, says “We are delighted to have completed our second issuance of notes in this market. We achieved all our objectives with this transaction. Several new as well as a number of existing institutional investors participated which is important as we aim to continue to increase the number of reliable sources of capital for our business. The transaction is attractively priced and the debt term of over 8.5 years closely matches the company’s average lease term.”
Goshawk was established in November 2013 as an aircraft leasing platform to focus on building an asset portfolio of young, new technology, in-production aircraft with a large and diversified asset-type and operator base. With support from its shareholders, Chow Tai Fook Enterprises Limited and NWS Holdings Limited, the Goshawk portfolio has grown to 83 delivered aircraft since inception. Together with the planned aircraft in the pipeline, the total asset value of Goshawk is estimated at approximately US$5.6 billion.