 In the August 20th edition of Aviation Finance - Aircraft leasing continues to hold its head above water
Air Freight & Conversion programmes: as revenues exceed expectations; Activity details in sale-and-leasebacks; BOC Aviation details careful navigation of Covid-19 crisis as Bob Martin describes ‘the most volatile that we have navigated our way through in our 26 year history'; Op-Ed: Innovation and leadership are desperately needed to bring air travel back: Joe Gill; IATA revises recovery projections down for third time; Qantas' pandemic impact revealed, as Bain outlines plans for Virgin Australia; a new platform focussed on aircraft leasing opportunities for Korean investors; a new name for Max.
In the latest edition of Aviation Finance (August 6th 2020) - returns heading to 10 p.c.?
Could Covid drive unlevered investor returns on aircraft back up to around 10 per cent? European air traffic is rising slowly, but is still less than half of last year’s level; ACG cuts planned capex to $1.3bn for next 18 months; Kroll Bond Rating Agency downgrades 138 aviation ABS securities and affirm the rating of just one; AerCap looks forward to a return to market equilibrium, when airlines can cover cash operating costs; CDB in three-plane US sale & leaseback deal and delivers ‘Chinook the Gray Wolf’ to Frontier; Nordic Aviation scheme approved; Hawaiian Airlines launches EETCs.focussed on aircraft leasing opportunities for Korean investors; a new name for Max.
In the latest edition of Aviation Finance (July 23rd 2020)
Regulatory issues which emerged in Japan and the US have prevented the deal between MUFG Bank and DVB closing; ACG closes jumbo bond; Aercap buys back $1.45bn in outstanding notes; GECAS appoints Buckley as SVP & Regional Manager for Commercial, Europe & Canada; CDB Aviation appoints O'Neill as CFO; Embraer delivered four commercial planes in Q2; Jet Time files for bankruptcy; Cathay Pacific profit warning; Icelandair Group expects $100m operating loss; China traffic update; SR Technics to ‘stick to the knitting’; airBaltic secures €250 million in new equity; Air Serbia in debt restructuring talks with Etihad; Virgin Atlantic recapitalises; Bondholders still seek Virgin Australia deal; Cargojet raise C$100m; DHL Express orders four BCFs; World's first hybrid electric 70+ seater aircraft; 'A reasonable recovery in air travel over Europe, but traffic at this peak time of year is still running at less than half of last year’s volume'.
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Analysis
In the latest edition of Aviation Finance (July 9th 2020)
Sale and leaseback deals, designed to inject liquidity into carriers, are growing in evidence, with private investors as well as lessors taking an interest. Latest deals involve Apollo and Merx Aviation with Delta Airlines, Falko also with Delta, SMBC Aviation Capital with easyJet and Turkish Airlines, and CDB Aviation with SAS; Lessors detail rent deferral terms, with Avolon reporting that it collected two thirds of lease payments due in H1; Consultancy IBA further revises values of aircraft down - with mid-life aircraft and those in their twilight years getting the sharpest discounts. It identifies young narrowbody values as having declined between 5-15% and out-of-production widebody by 20-40%, with mid-life and older current generation narrowbody values down 15-20%.
In the June 25th 2020 edition of Aviation Finance
Strong liquidity is evident in the aviation capital markets as AerCap issues notes twice in just three weeks to raise a total of $2.5 billion while Air Lease Corporation enjoys strong support for offerings from a swathe of leading institutional investors; John Slattery, Embraer’s chief executive of Commercial Aviation, is to succeed David Joyce as president and chief executive of GE Aviation; Signs of stress continue however in airline markets as an IATA survey suggests travellers are becoming more reluctant to return to the skies with IATA DG de Juniac warning that airlines will need further State aids to get through this winter; the war of words between OEMs and some airlines over order cancellations.
In the June 11th 2020 edition of Aviation Finance
Moody’s expresses concern over ‘breadth and severity of shock’ to aircraft leasing sector; Aircraft market values and lease rental factors falling amid subdued demand for air transport, according to Scope Ratings; Surge in airline share prices as investors encouraged by signs of upturn in demand; Eurocontrol paints positive picture for resumption of passenger air traffic in Europe; SMBC delivers record profits in year to March 2020; $1.250 bn bond issuance by AerCap; Aircraft Manufacturing: Boeing 737 MAX finally prepares to return to the skies.
In the May 28th 2020 edition of Aviation Finance
Downward pressures on aircraft supply continue to grow as AerCap reschedules 100 aircraft deliveries, while SAS and Air New Zealand are among the latest batch of airlines to announce similar delays. The restructuring of Norwegian Air Shuttle and the decisions by LATAM and Avianca to enter Chapter 11; Growing consensus behind guidelines for return to ‘normality’ in European airspace – UK and Ireland excepted; With a threatened action in the European Court by Ryanair over state funding of Air France KLM, Simon de Broise, and Gurpreet Chhokar at Collyer Bristow LLP, consider the extent to which state aid is permissible under EU regulations.
In the May 14th 2020 edition of Aviation Finance
Some green shoots are in evidence, as airlines begin to envisage the beginnings of a recovery to a new normal, lease payments resume, and financing initiatives bear fruit. Setbacks are still probable, but as we report across this issue there can be hope that the 'end of the beginning' may be contemplated. Cargo provides a ‘bright spot in a dark sky’ with new opportunities for P2F conversions; Regional aircraft and VLAs bear brunt of crisis; Ryanair and other LCCs set to seize network opportunities in Europe.
In the April 30th 2020 edition of Aviation Finance
As the Covid turmoil continues, we focus on progress as the airline financing industry battles to ensure sustainability of a healthy industry after the pandemic. The position of investors in aircraft ABS in the still unlikely event that they might come under stress, compared with lenders and lessors. State bailouts and Government finance packages across the world continue to be a key part of the response to the crisis, as are posited solutions, such as aircraft recycling.
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