 In the May 13th edition: recovery signs continue to manifest themselves
May 13th 2021: Gradual recovery in passenger traffic and continued strength in cargo is continuing to provide a backdrop for investor appetite for aviation assets, as other capital market transactions revive. The improvement in sentiment is spilling over, too, into order books of airframe manufacturers, albeit slowly, indicating that supply of aircraft assets will lag demand on the way out of the pandemic recovery. Airbus has reported good improvement in both its deliveries and orders for April this year. But even though it was the third consecutive month of order expansion for Boeing, with 17 deliveries and 25 gross orders, allowing for cancellations and conversions Boeing booked just eight net aircraft orders. It also only delivered four 737 MAX jets in April – down from 19 the previous month – after it halted deliveries due to the discovery of a new electrical problem.
In the April 29th edition: recovery signs
April 29th 2021: In its third tapping of the US market so far this year BOC Aviation raises $750m. Falko's first ABS secured with regional aircraft assets post pandemic; Boeing CEO David Calhoun predicts that 2021 ‘will be a turning point as more people are vaccinated and travel again’; Avolon incurs Q1 loss, sees ‘recovery firmly underway’ ; Virgin Australia to take back 10 leased B737-800s; DAE orders 15 Boeing 737 MAX jets; IndiGo closes sale/leaseback deals on 17 aircraft with GECAS and SKY; EU approves €462 million support for TAP.
GECAS arranges Purchase Leaseback Agreements with IndiGo for 14 Airbus Neos
April 22, 2021, Shannon Ireland: GE Capital Aviation Services (GECAS) along with the ventures it services have agreed a Purchase/Leaseback (PLB) arrangement for 14 LEAP-powered Airbus neo aircraft with IndiGo. The seven A320neo and seven A321neo are scheduled to deliver between the fourth quarter of 2021 and the middle of 2022.
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Analysis
In the April 15th edition: a positive frame of mind
April 15th 2021: BOC Aviation is in the process of tapping the US capital market under its Global Medium Term Note Programme; There are ‘lots of reasons to be bullish on domestic leisure travel' transport consultants at Oliver Wyman say, and, more good news: Southwest Airlines has recalled all flight attendants from long-term voluntary leave to cope with a domestic recovery, now progressing faster than expected, while the share prices of European airlines have risen 57 per cent and US airlines by 65 per cent since last November.
In the April 1st edition: further evidence of a new springtime optimism
In the April 1st 2021 edition: We explore how well ABS transactions have done, in relative terms, over the past six to nine months, why regional aircraft operators and lessors may be in the vanguard of recovery, the progress being made by Boeing with the return of the MAX and the trend towards further consolidation amongst lessors: The Carlyle Aviation Partners acquisition of Fly Leasing for $520m: Traffic recovers in Europe, but LCCs still sharply curtailed: AerCap Dreamliners for Norse Atlantic; American repays US Treasury Cares Act loan.
In the March 18th edition: Aercap's acquisition of GECAS - a ‘once in a lifetime opportunity'
In the March 18th 2021 edition: The deal between GE and AerCap creates an industry leader across all areas of aviation leasing, encompassing passenger and freight aircraft, engines and helicopters. While aircraft leasing will be by far the largest component in this much enlarged business, the added diversity of revenue streams and customer touch points from the new business units will benefit the whole. That it also has been engineered by an 'Exchange- Traded lessor' helps balance the flightpath of global aviation financing. As this issue also reveals in other stories, there is strong evidence that the tide is turning in relation to the impact of the pandemic. IPOs by three LCCs is one example of this. Sun Country Airlines saw its shares rise by 51 per cent on its debut; Norwegian start-up Flyr raised $70 million with an IPO in Oslo and Frontier Airlines, a carrier acquired by US investment group Indigo in 2013, has also filed for an IPO.
AerCap pays $25bn cash for GECAS, with GE retaining c.$6bn stake in enlarged business
March 10, 2021: AerCap has entered into a definitive agreement with General Electric under which AerCap will acquire 100 per cent of GE Capital Aviation Services. Under the terms of the agreement, which has been unanimously approved by the boards of directors of AerCap and GE, GE will receive 111.5 million newly issued AerCap shares (with a market value of approximately $6 billion as of March 9, 2021), $24 billion of cash and $1 billion of AerCap notes and/or cash. GE will be subject to a staged lock-up agreement allowing it to dispose a portion of its stake after nine months and the entirety of its stake after 15 months. GE also will be subject to a customary standstill and other provisions.
AerCap acquisition of GECAS would be biggest ever aircraft leasing transaction
Monday 8th March 2021: Bloomberg is reporting that General Electric is close to agreeing the sale of GECAS to AerCap in a deal speculated as being worth approximately $30 billion. GECAS has approximately 1,650 owned, managed and leased aircraft and had about $35.9 billion in assets at the end of last year while AerCap has about 1,330 aircraft and and assets of $42 billion. A merged portfolio, therefore, would give it a total portfolio of 2,980, a combination of the two largest aircraft lessors in the world by fleet numbers.
In the latest edition of Aviation Finance (March 4th): admiration from lessors for the resilience of the airline industry
March 4th 2021: Emanating from their Q4 Earnings Calls, CEOs from the exchange-traded aircraft leasing firms express admiration for the resilience of the airline industry and sound an upbeat note about the strength of the coming recovery. Also: Industry economics analysis: Boeing's latest Commercial Market Outlook; Freight trends; Financial Reporting: the Impact of Covid for lessor assessment of expected credit losses - EY’s Niamh Tobin on how lessors' collectability considerations should be reflected in their impairment assessments, and, much more.
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