ISTAT News | 01 June 2021
Jetrader: Q&A With Dean Gerber
Jetrader: How did your career in aviation start?
Dean Gerber (DG): I’d love to say this was part of some divine plan or brilliant insight on my part but, in reality, it was pure serendipity. I started my career with a firm called Chapman and Cutler in Chicago, and my indoctrination into aviation finance was solely a function of the legal work that my group happened to be doing at the time. I worked with a great team and, back then, a lot of our work involved acting for institutional investors (predominantly insurance companies). My first transaction out of law school involved an American Airlines widebody financing, and from that very first day on the job, I have remained actively engaged in the aviation world.
Jetrader: How did you end up at Valkyrie BTO Aviation?
DG: About six years after I started practicing law at Chapman, I noticed that the institutional private placement market was moving away from the aviation sector. I had worked very hard to that point to develop a deep understanding of the legal underpinnings of aviation finance, and so I jumped at the opportunity to join the new aviation team forming at Vedder Price. Back then, there were only four lawyers in the group, but we did have a terrific client, United Airlines. Over the course of the next 29 years, I helped grow, and then lead, the Global Transportation Finance team at Vedder Price (a group that had over 80 professionals, spread over six offices, on three continents, when I ultimately left the firm in 2019). When I joined Vedder, Chicago was a bit of an aviation center with United, Heller Financial, Sanwa, ABN AMRO, AAR, SocGen and others all involved in aircraft leasing and finance in one form or another located there, so we had a terrific local client base to help grow the practice. I was also fortunate to work with the Export-Import Bank of the United States, which was, at that time, just committing itself to asset-based aircraft finance and putting together its transportation division.
The sheer diversity of my practice allowed me to see transactions from every angle, which enhanced my commercial perspective. It didn’t hurt that during the earlier days of my practice, there was little competition from other lawyers/law firms, as aviation finance was a relatively new business line that required specific skills and knowledge. I was and remain immensely proud of the team we built at Vedder, but as time wore on, I got a bit restless and thought about exploring new challenges. That ultimately led to me taking a position at ORIX Aviation as their general counsel. I had done work for ORIX for many years preceding that and knew their CEO James Meyler well, so one night (after several bottles of wine!), he mentioned he needed a GC, and I suggested myself. A few months later, I joined ORIX. It was a great experience, and I am grateful to have had that opportunity. The team at ORIX is tremendous, and I truly loved the job, but the commute to Dublin proved challenging with my wife and kids in the U.S. and so, after a few years, I opted to join the Valkyrie team.
Dean Gerber (left) with ISTAT Board member Adam Pilarski at ISTAT Americas 2020 in Austin, Texas.
Valkyrie is headed by Greg May, who is someone I’ve known from my early days in the business. I advised Greg over many years (including when he headed Q Aviation), and when he and the team at Blackstone started talking about setting up Valkyrie, the timing proved right for me, so I joined them. To be able to work with a startup company with the backing of a group like Blackstone is incredibly exciting, and I am really looking forward to the next phase of my career and the opportunity it presents.
Jetrader: What did the industry look like when you started versus today?
DG: That is a bit of a loaded question since I have been accused of being on Orville and Wilbur Wright’s maiden voyage on the Kitty Hawk! Suffice to say, in my 35 years of practice, I have seen transformation at every level. Extraordinary advancements in technology — both in terms of the aircraft themselves as well the various financing vehicles we utilize to finance and lease them. The operating lease business was still in its infancy and had, at that time, barely made a dent in the market. In those days, many airlines fully expected to keep their aircraft for their entire useful lives, and so much of our work was designed to provide longer term financing solutions. Indeed, many of the leases I worked on in the early part of my career had terms exceeding 20 years, and most had purchase options of some sort allowing the airline/lessee to acquire the aircraft. The capital markets were available to some degree, but the investor pool and appetite for aviation was definitely limited. Airline deregulation in the United States had only occurred a few years prior to that, which was a trigger of sorts, but change would come slowly.
Our industry is prone to shocks unlike most others, and certainly the past year has demonstrated that. I have worked through bubble bursts, pandemics, economic collapses, volcanic eruptions, 9/11, and other regional and global crises, but the one constant since I first began is our industry’s resilience. It has battled through every challenge and has come out stronger on the other side, demonstrating time and time again the
critical importance of aviation travel to the world.
Jetrader: I understand you have been active with the Aviation Working Group for most of your career. Tell me about AWG, why it’s important and your role with that group.
DG: As anyone who knows me can attest, I can rarely go a day without uttering something about the Cape Town Convention. My interest in this treaty stems from my involvement with the Aviation Working Group (AWG) dating back to the mid- 1990s. AWG was a major proponent of the Cape Town Convention and substantially drove its development and implementation over the course of many years, and I formed part of the legal advisory panel providing guidance and support to AWG, including chairing the committee for three years. The actual text of the treaty (including the aircraft protocol) was signed in 2001, but as many of its terms were wholly inconsistent with existing national laws in many countries; the panel support was necessary to facilitate an understanding of the treaty to ensure consistent global application.
Dean Gerber, left, moderating the New Financing Solutions panel at ISTAT Americas 2019 in Orlando, Florida.
Working with the incomparable Jeffrey Wool, I spent countless hours with the panel and the broader AWG constituency seeking advancement in these areas. That work has been extraordinarily fulfilling to me. Professionally, my clients have benefited from the depth of my knowledge and understanding of the treaty. On a more personal level, I have developed longtime friendships from like-minded attorneys across the globe, which has truly enriched my life. The past 12 months are a testament to the work we did, as we
have seen the convention applied in multiple workouts, restructurings and repossessions, providing ample evidence of the great advancements made in the legal underpinnings that are an essential element to the growth of aircraft finance. I remain involved in AWG today with its many projects, which include the Global Aircraft Trading System (GATS), sustainability, cross-border transferability of aircraft, and other matters that are critically important to our industry.
Jetrader: When and how did your involvement with ISTAT start?
DG: I’ve been a longtime member of ISTAT and have frequented ISTAT conferences for many years. To this day, ISTAT provides by far the best networking events in the industry and has offered me terrific opportunities not only to visit with a vast number of clients and contacts on a regular basis but also allowed me to put my finger on the pulse of aviation to better inform me and the advice I was giving. My involvement at an organizational level started with committee work I did for the ISTAT Foundation back in 2009. I assisted with the development committee, trying to find donors to the Foundation’s Roundtable. Through that work, I was subsequently appointed to the ISTAT Foundation Board in 2011 where I served for several years. I was brought onto the ISTAT Board in 2013 and have been serving on that board since. Prior to my election as ISTAT president, I served in two other officer positions, most recently as treasurer. My work for ISTAT has been immensely rewarding to me, not just because of the good things that ISTAT does and its commitment to the industry I have spent a career working in, but also because of the many friendships I have developed and nurtured through this work. The aviation industry is a family, and ISTAT provides an unrivaled platform to stay in touch with friends and colleagues.
Jetrader: What are you most excited about as you transition into your role as ISTAT president? What are your main goals for the next two years?
DG: With the year we’ve just had, I’d say my primary goal for the coming year is getting back to business as usual. We have backloaded our conferences in 2021 to allow for greater vaccine rollout and a rollback of some of the COVID-19 limitations that have largely shut down in-person networking events. It is a crowded schedule, but given the regional nature of many of our events, we felt this would give most of our members an opportunity to experience some level of networking this calendar year. My aim is to be back to our normal calendar next year, starting with an expansion of ISTAT’s initiative in January of 2022 during Dublin Aviation Week.
Return to business as usual also means that ISTAT will pick up where we left off in terms of our goals of increasing our member offerings in Asia in the hopes of continued growth in that region. Asia has been a growth target for ISTAT for many years now, and I am hoping to dedicate further resources and efforts to aid in that effort. ISTAT will also continue its diversity and inclusion initiatives, as it is critical that we set an example of best practices for a society of our size and scope. One look at the recent ISTAT Board elections shows that we are making good progress in that area, as our board showcases a widely diverse set of individuals who now better reflect our membership and the industry at large. I also intend to focus the board on sustainability, which is another key concern in our industry. We will not only look to make our conferences “greener” but also will seek to dedicate more panel time to this critically important topic.
Our educational offerings are also going to blossom over the next two years. ISTAT is planning the launch of our ISTAT Professional Development Program (PDP) in partnership with PwC. These Dublin and U.S.-based classes are new to ISTAT, and they have already proved to be extremely popular. We aim to further expand the program next year to Asia. We are also looking to expand ISTAT’s Rising Executive Program, designed for ISTAT members and professionals with fewer than 10 years’ experience in the commercial aviation industry. Through these programs, we look to advance our goals of helping develop the future leaders of our industry.
Through it all, we will continue to oversee our industry-leading appraiser program (headed by Bryson Monteleone) and continue our support of the ISTAT Foundation and all of its critically important programs.
Jetrader: What excites you about where the industry is headed 10 or 20 years down the road?
DG: We are (hopefully) toward the end of this horrific pandemic and, notwithstanding the record levels of airline failures, parked equipment and downward valuations, I continue to remain incredibly optimistic about the future of our industry. These types of massive jolts to the system only delay but don’t derail the further expansion of air travel. While some naysayers suggest the pandemic will leave a lasting negative impact on the appetite for travel, I simply do not subscribe to that notion. Human beings need a personal connection that can often only be achieved through travel, and I don’t see that changing. Technological changes, green initiatives, population growth, demographic changes, fuel costs, funding gaps and myriad other factors all come into play in the growth of aviation, but I think growth is inevitable. The OEMs continue to predict a massive expansion of aircraft production over the next 20 years, and nothing I can see will alter that course. Financing that volume of equipment will prove challenging but, as we’ve seen, operating leasing will continue to expand, and banks, institutional investors, capital markets and private equity will continue to provide critical funding to the sector. Commoditization of financing products, fleet simplification, and global harmonization of aviation rules and regulations will set the platform for the growth needed to carry us the next 20 years and beyond.
Jetrader: For young people considering a career in aviation, what thoughts would you offer?
DG: As Nike would say, “Just Do It.” I have thoroughly enjoyed my career, which has a lot to do not only with the nature of aviation as an industry but also the people in it. Aviation is never static. We are constantly facing challenges that are unique to our industry. But our industry is resilient, and we work our way through whatever roadblock is in front of us. It’s an enormous industry, but, to me, it still feels like a club that I am lucky to be a member of. There is a collegial nature to aviation that really sets us apart from other industries. The fact that a society like ISTAT exists highlights the point. ISTAT is a place where individuals from all corners of aviation, including fierce competitors, come together to learn, laugh, share, gain insights and achieve common ground. If I were a young person looking to start a career, what more could I ask for?