KBRA Affirms One Sky Flight LLC’s 2021-1 Enhanced Equipment Trust Securities Ratings

KBRA affirms the A, BBB-, and BB- ratings on One Sky Flight LLC’s 2021-1 Enhanced Equipment Trust Class A Loans, Class B Certificates, and Class C Certificates (“the Securities” or "the EETC"), respectively, which are guaranteed by One Sky Flight LLC (OneSky or the company), a leading provider of private aviation services, based in Cleveland, Ohio. The Outlook for the ratings is Stable.

Key Credit Considerations

The ratings for the Securities reflect KBRA’s expected loss analysis and our view of the aircraft collateral pool as strategically important to OneSky as well as KBRA’s view of the company as having an appropriate credit profile to support the transaction’s ratings. The ratings are supported by a strong collateral pool of 85 good-quality business jets as of September 30, 2024 (3Q24), diversified across models and sizes, which are viewed as strategically important to OneSky given that they represent a significant majority of OneSky’s fully-owned aircraft fleet and a significant portion of its total operated fleet, which supports a high likelihood of affirmation of the transaction in the event of a bankruptcy or restructuring of OneSky. The ratings consider the priority of payments for the senior Loans and subordinated certificates, the loan-to-value (LTV) of each Security, and the payment-in-kind (“PIK”) feature for up to 18 months of interest payments on all Securities classes as well as other structural protections of the EETC including the legal protection provided under Section 1110 of the U.S. Bankruptcy Code (“Section 1110”) available to the Securities holders.

The Stable Outlook reflects a collateral pool of good-quality business jets with appropriate LTVs which provide adequate buffers against potential collateral pool valuation volatility and KBRA’s view that the collateral pool is core to OneSky’s operations. In addition, the private aviation market continues to experience strong demand combined with limited production from OEMs, which are supportive dynamics for aircraft values in the near-term.

Rating Sensitivities

The rating Outlook is Stable, therefore, a rating upgrade in the near future is not expected. The Stable Outlook could be revised to a Negative Outlook or the ratings could be downgraded if private aviation flight demand declines significantly and leads to increased transaction LTV ratios and/or OneSky’s credit profile deteriorates significantly such that the likelihood of collateral pool affirmation and OneSky operating as a going concern, in KBRA’s view, significantly declines. In addition, a decrease in the collateral pool’s strategic importance to One Sky’s operations, in KBRA’s view, could lead to a downgrade.

To access ratings and relevant documents, click here.

Methodologies