BUSINESS
The following describes the business historically operated by Tempus Applied Solutions LLC and its subsidiaries under the “Tempus” name as an independent enterprise prior to the Business Combination and as subsidiaries of Tempus Applied Solutions Holdings, Inc. after the Business Combination.
Overview
The following describes the business historically operated by Tempus Applied Solutions LLC and its subsidiaries under the “Tempus” name as an independent enterprise prior to the Business Combination and as subsidiaries of Tempus Applied Solutions Holdings, Inc. after the Business Combination.
We provide turnkey flight operations; customized design, engineering and modification solutions; and training services that support critical aviation mission requirements for such customers as the U.S. Department of Defense (the “DoD”), U.S. intelligence agencies, foreign governments, heads of state and high net worth individuals worldwide; and acquire or lease aircraft in support of our services. Our management and employees have extensive experience in the design and implementation of special mission aircraft modifications related to intelligence, surveillance, and reconnaissance (“ISR”) systems, new generation command, control and communications systems and VIP interior components; the provision of ongoing operational support, including flight crews, maintenance and other services to customers; and the operation and leasing of corporate, VIP and other specialized aircraft.
Our principal areas of expertise include:
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Flight Operations: turnkey flight operations and related support services required by the customer for the ultimate successful execution of its mission, including leasing, planning, maintenance, training, logistics support and other support services; and
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Design, Engineering and Modification: the modification of aircraft for airborne research and development, the addition and upgrading of ISR and electronic warfare capabilities and wide body aircraft VIP interior conversions.
We operate out of our corporate headquarters in Williamsburg, Virginia. We utilize hangar space in San Marcos, Texas to provide facilities for flight training and operations support for our customers in that region. Additionally, we are able to access hangar space in Brunswick, Maine as needed, to provide facilities for aircraft production support for our customers.
Industry
Our industry and target markets are largely influenced by the DoD budget and overall trends in the commercial aircraft and business jet markets.
Defense
The DoD fiscal year 2018 budget request is approximately $639 billion, representing a significant 9.6% increase in proposed spending over the prior year and a change in priority for defense spending in the new administration.
Commercial Aircraft
Commercial aircraft activity continues to rebound from the financial crisis. According to the International Air Transport Association, international passenger air traffic increased 9.6% year-over-year as of January 2017 compared to the same period in 2016. Business jet deliveries fell in 2016. Business jet deliveries declined an estimated 3.2% in 2016 compared to 2015, according to Jetcraft’s most recent market analysis, although long-term forecasts suggest that growth may return to the business jet market in 2018.
Aircraft Leasing
The U.S. government has adopted a strategy of employing the custom integration of sensors and command, control, communications, computers, intelligence, surveillance and reconnaissance (C4ISR) solutions into existing aircraft to support intelligence and communication activities in forward deployed areas. According to the U.S. Government Accountability Office, the U.S. government owns and leases over 1,700 aircraft, which play a critical role in supporting various agencies’ mission-related responsibilities and operations. As acquisition and procurement budgets have tightened, government customers have increasingly turned to contract leasing solutions through operations and maintenance funding to reduce up-front cost and “red tape” associated with large procurement processes.
