The Sky's the Limit
Leasing a plane is definitely not like picking up a movie at the video store. An aircraft is a major investment, one that requires a deep analysis of risks for the owner. Actuary Marc Altschull understands this, so he uses his actuarial skills to help protect his company from financial and asset management risks, such as accounting for depreciation of the plane, borrowing costs and credit risks of the lessees. Altschull works in aviation financing, an especially tumultuous industry given the economic climate and implications of financial decisions of such a large magnitude. As a member of the marketing team, he supports the marketing staff to structure leases to achieve his company’s profit goals.
“I started with the company in the treasury area, working with investment bankers to structure deals when issuing debt to buy planes, as well as hedging interest rate risk,” explains Altschull, who is a member of Aviation Capital Group. Aviation Capital Group works like a group of real estate agents by purchasing commercial aircraft and releasing them to established and start-up airlines around the world. Altschull’s global customer base includes American and Southwest Airlines, as well as airlines based in South America, Europe and Asia.
Altschull’s background in actuarial science has given him an advantage over most others working in the aviation financing industry. He credits his rigorous training in mathematics, economics, finance, probability and statistics with enabling him to design new and innovative pricing models. In one case, an airline client was considering the purchase of a number of planes, but was reluctant to go through with the transaction due to concerns about future obsolescence of the aircraft type. “To help this particular client, I leveraged my consulting background and modeling skills to build a pricing model for a residual value guarantee that we could offer the airline,” explains Altschull.
Altschull has applied his actuarial skills in a new way, and has built on his technical competencies to create innovative and effective financial models for his company. As a result, he is furthering the dynamic image of the profession and positioning himself as a 21st century thought-leader, demonstrating ways that actuarial skills can help today's businesses address complex issues.