NorthEast Planes Aviation, Inc. 506(c) Investor Portal

NorthEast Planes Aviation, Inc.

Developing a Private Aviation College

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NorthEast Planes Aviation, Inc. 506(c) Offering Platform

INTRODUCTION TO OUR COMPANY

NorthEast Planes Aviation, Inc. (“NorthEast Planes Aviation”, or the “Company”) was formed for the purpose of operating as a private aviation college that produces professional pilots who are job ready. The Company owns two aircraft, a Piper Seminole twin engine and a Piper Warrior single engine trainer. Current revenue streams consist of flight training, aircraft rentals, aerial tours, sales of pilot supplies and aeronautical charts, and contract flight training through a national company, Professional Instrument Courses.

NorthEast Planes Aviation is currently based out of the Brush Municipal Airport in Colorado. One of the Company’s two aircraft are kept in the Company owned hangar, but there are no other hangars available for rent or purchase. A mobile office is rented where students are met, a portable flight simulator is set up and pilot supplies are available for sale.

NorthEast Planes currently has flight training customers from the entire Northeastern Colorado area, Northwest Kansas, and Western Nebraska. Recent multi-engine students traveled from Southwest Kansas and Colorado Springs for the quality of training offered at NorthEast Plans Aviation.

The Company is seeking expansion capital needed for the company to grow into a regional, if not national, presence in the flight training industry. The Company has created an expansion plan that involves several phases to address the Company’s lack of space at its current location:

U.S. airlines will demand about 95,000 pilots in the next 20 years.
— according to Boeing Co. Estimate —

NorthEast Planes Aviation, Inc. 506(c) Offering Platform

INTRODUCTION TO OUR COMPANY

The Company has created an expansion plan that involves several phases to address each of the Company’s current problems:

  • Phase 1: First, the company must acquire a facility to store the aircraft and operate a maintenance shop. This will eliminate the time delays and cost of moving our airplanes to and from a mechanic’s airport and reduce total cost of maintenance done at retail prices. This represents a cost savings of approximately 60%. A new facility is an absolute must for the Company to grow as planned.
  • Phase 2: A new facility will enhance the growth of the Company’s Professional Pilot Training Program and provide a site for its Aviation College.
  • Phase 3: The demand for mechanics presents the opportunity for the Company to develop a maintenance training program to help produce new mechanics for its own operation as well as the world market.
  • Phase 4: One of the existing company aircraft is suitable for use in air taxi charter operations. The new facility will be capable of housing the additional staff required for charter activity, as well as provide an attractive location for customers to visit for service. This will also provide graduates of the professional pilot program a job whereby they can acquire the enormous amount of flight hours now required for them to move up into an airline cockpit.
  • Phase 5: Many of our past customers have purchased airplanes during, or soon after training. There are currently no hangars for rent at the new proposed location and the company will need additional hangars within 18 months. Construction of 6 – 10 T hangars will address both issues.
The number of commercial aircraft in service in the U.S. to rise 7.7 percent during the next 20 years to 8,067.
- according to Oliver Wyman’s 2016-2026 Global Fleet & MRO Market Forecast -

NorthEast Planes Aviation, Inc. 506(c) Offering Platform

SUMMARY OF OPERATIONS

New Location

The location chosen for the Company’s planned expansion is Cheyenne Regional Airport. Preliminary discussions revealed a high level of interest on the city’s part in growing the airport, and the existence of infrastructure already in place suitable for the Company’s development needs. Existing building lease terms are $3 per square foot per year. Ground lease terms are projected at $0.20 per square foot per year, initially, for the building footprint used, and a 20 year lease with one or two options to renew for similar terms.

  • Phase 1: The initial lease at the Cheyenne airport will be for 2 classrooms, 2 large offices spaces, and one hangar for a total of approximately $1,400 per month, including utilities.
  • Phase 2: Construction of the self service fuel island and a dormitory sufficient to house 48 students. The estimated cost for these are $65,000 and $500,000 respectively.
  • Phase 3: The third phase of construction will be 6 to 10 “T” hangars adjacent to the new offices. These are estimated to cost $350,000 and will be used for company aircraft storage or rented if otherwise unused.
  • Phase 4:The fourth phase would be the addition of aircraft as dictated by the student load and operational requirements.

SUMMARY OF OPERATIONS CONTINUED

Target Market: Flight Training

The market for flight training consists primarily of four groups:

  • People who are looking for a job in aviation. Many of these are just out of high school or college but the rest are 30 to 40 years old and looking to change careers. These fall into the Professional Pilot Program detailed previously. Each student represents about $7,500 in flight training revenue per month.
  • Business people who believe that an airplane can help them in their business. They typically have limited time to devote to training, and average one or two flights per week at $140 to $180 per lesson.
  • People who just want to fly for fun. They tend to train at about the same rate as the business person demographic.
  • Recurrent customers. Every pilot is required to complete some form of a flight review every two years. Included in this group are those who want to fly a different airplane, upgrade their license or ratings, or who just haven’t flown in a year or more and need some instruction prior to going up alone again. This group varies widely, from $100 per student for recurrency to $3,000 for a pilot upgrading to multi engine aircraft and as much as $7,000 for a pilot earning an instrument rating in his own airplane.

SUMMARY OF OPERATIONS CONTINUED

Target Market: Air Taxi Charter

The air taxi charter market consists of two segments:

  • Local business persons who need to travel less than 500 miles, conduct their business, and return, usually on the same day.
  • People who find themselves in an emergency situation due to mechanical breakdown or extreme weather and need to travel on short notice. Historically, the Company has flown ranchers to livestock sales out of state and assisted families in attending funerals.

SUMMARY OF OPERATIONS CONTINUED

Target Market: Maintenance Market

The maintenance market has four components:

  • The ability to perform maintenance on the Company’s own aircraft is the primary focus. This not only cuts the actual cost by approximately 40%, which represents an outside providers profit margin, but saves the cost of moving the aircraft to and from the outside provider and reduces down time simultaneously.
  • Potential to perform maintenance on all 31 aircraft based at the home airport. This plan calls for the Company to acquire one annual inspection customer the first month of operations in the new facility, two more the second month, three more the third month, and so forth, which will mean adding maintenance personnel by the fifth month. Each annual inspection will generate between $1,000 to $4,000 in revenue, depending upon aircraft size and complexity.
  • The third component is the number of aircraft in the balance of Northeast Colorado. As previously noted, the current wait time in this region is 3 to 8 weeks. Marketing to this region should bring at least 10% of these customers to our facility.
  • Transient pilots who need maintenance en route somewhere else. This is a very small segment, but a critical one when it occurs. Historically, this is approximately 1 occurrence per month, but often generates large amounts of revenue and good will when customer service is the primary goal.

SUMMARY OF OPERATIONS CONTINUED

It is expected that the Company’s fuel sales will be limited to company operations and maintenance customers, due to the present FBO being operated by the City of Sterling. However, having fuel available at wholesale cost for company operations will save the Company thousands of dollars, and allow us to use fuel as an incentive for maintenance customers, for example, offering a small amount of free or discounted fuel with the purchase of maintenance.

Target Market: Pilot Supplies

The market for pilot supplies will be primarily students in the professional pilot and college programs. Each of these students will purchase at least $400 in charts, textbooks, and headsets, and many students will purchase additional items such as flight jackets, upgraded headsets, and miscellaneous trinkets with the company logo affixed.

NorthEast Planes Aviation, Inc. 506(c) Offering Platform

Company Management Team

The Company is currently managed by seasoned business and sector professionals dedicated to the success of the Company and efficient execution of its planned operations

Elliott Arthur

Elliott Arthur

President

Born December 16, 1948, in Laramie, Wyoming, Mr. Arthur spent his childhood in various Western states, mostly Colorado and South Dakota. After graduating high school in rural Eastern Colorado, he found work on farms and ranches in Colorado as well as in the oil fields in Wyoming to pass the time awaiting his entry into the US Navy. He was trained as an aircrewman on Navy Patrol aircraft, and survived one tour of Vietnam, earning 2 air medals and a combat ribbon.

He remained on active reserve duty after separation from active duty in 1969, until his appointment to the California Highway Patrol Academy in October 1971. After graduation, he was assigned to the Riverside Area CHP office, where he married the mother of his 2 children and obtained a Business Administration degree from Riverside City College. Four assigned areas and 20 years later, he retired from the CHP and began his aviation career as a flight instructor at his local airport.

Since then, Mr. Arthur has accumulated over 10,000 hours of flight time and over 7,500 hours of pilot training experience. His experience includes flying for United Express, 4 air taxi charter companies, and as a staff flight instructor for Lufthansa, and managing a large flight school in Denver.

He founded NorthEast Planes Aviation Inc. in 2006 in the wake of 9/11. He conducts ground schools and flight training, as well as “mock checkrides” to help students prepare for the real thing. He is responsible for all air operations: including hiring, training, licensing, and piloting. He has leased, owned, or operated 63 different makes of aircraft, and 30 years of experience operating his own business. He has a reputation in the area for quality flight instruction, and a history of providing quality customer service.

Regulations instituted in 2013 make commercial airlines dependent on a set of aviation segments that provide pilots the necessary experience but that are not elastic to growth in demand by the airlines and other career-employment companies.

NorthEast Planes Aviation, Inc. 506(c) Offering Platform

Terms of the Offering

$1,800,000

Minimum Offering: $250,000

Minimum Subscription: $10,000 (500 Shares)

NorthEast Planes Aviation, Inc. (the “Company” or “NorthEast Planes Aviation”) a Colorado Corporation, is offering 90,000 shares of Series B Convertible Preferred Stock for $20.00 per share.

Have a question about our offering?
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NorthEast Planes Aviation, Inc — Elliott Arthur — 306 Husky Drive — Hillrose, CO 80733 — (970) 847-3227