Aviation Finance

Developments

Latest edition (November 24th): Resilience of commercial aviation still strongly evident
November 24th 2022: The sheer resilience of aviation in the face of geopolitical and economic uncertainty is once again evident in this issue of Aviation Finance. IATA DG Willie Walsh is encouraged not just by the airline profit recovery in Q3, but particularly by positive trends in load factors. And SMBC Aviation Capital, which saw its HI profits rise 43 per cent, anticipates a continued improvement in line with the ongoing recovery in the global airline sector.

Latest edition (November 10th): International air traffic recovery now proving strong
November 10th 2022: With the notable exception of China, the recovery in air traffic across the world continues to prove robust. International RPKs are now running at 70 per cent of 2019 levels, with all markets, led by Asia-Pacific, recording strong growth. This is being reflected in airline profitability and the financial performance of leading providers of aviation finance. Boeing targets return to 800 deliveries a year; Airbus still on for 700 deliveries this year; IAG confirms Boeing and Airbus orders; Emirates orders five 777Fs; Chinese lessors order 300 C919s; ATR cuts losses; STARLUX takes delivery of first of 18 A350-900 aircraft; BOC Aviation delivers B787-9s to Norse Atlantic ; GA Telesis delivers three A320 to SmartLynx; ACG delivers 737-9 MAX to Copa; SAEL in four engine sale & leaseback; NAC enters narrowbody market; Natixis provides PDP financing for Azorra Aviation; Segor joins ACG as CFO.

 

Perspectives

Lessors place big orders with Boeing and Airbus


The latest batch lessors look to a peace to come includes one of the largest orders this year, for 80 A320 family aircraft by BOC Aviation, and the firming up of an order with Boeing for 32 MAXs from ALC.
Sanctions present varied legal issues for lessors
Insurers ponder true extent of their claims exposure
Delta, easyJet and Wizz see blue skies ahead
Assets trapped in Russia are an operational nightmare for financiers and lessors

Developments

October 27th edition: Despite concerns about pace of recovery, robust demand is seen 'at attractive lease rates' for young fuel-efficient aircraft
October 27th 2022: Q3 was Avolon's best quarter since the pandemic began; Although EUROCONTROL has expressed concerns about the pace of the recovery in air traffic, many carriers are already back to the levels of traffic seen in 2019; The appetite for new, fuel efficient aircraft remains strong against the backdrop of supply constraints and labour shortages, as the world’s carriers anticipate future growth prospects.

October 13th edition : SKY Leasing sells 36 plane portfolio to DAE as new deliveries rise again
October 13th 2022: SKY disposes of portfolio to DAE; Also in this issue: CO2 challenge facing the aviation industry and how 2 airlines are approaching their lessors in very different ways; Airbus deliveries up again in September; ALC places aircraft, issues Q3 update; Senior appointments at Avolon.

September 29th edition: Aviation continues to create opportunities for investors and financiers
September 29th 2022: Geopolitical uncertainties notwithstanding, commercial aviation continues to create new opportunities for investors and financiers. In this issue we look at the difficulties being faced by Boeing in China as authorities there drag their heels on the return of the MAX. But we also report on the continued appetite for aviation exposure by the likes of Apollo Global Management, with its $1.5 billion support for Embraer sales, a $1.725 billion syndicated bank facility for SMBC Aviation Capital and $400 million bank finance for TrueNoord.

 
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September 15th edition: Recovery in air travel strengthens as airlines, OEMs and lessors re-position for growth
September 15th 2022: The recovery in air travel and the semblance of a return to a kind of normality is gaining traction throughout the industry. Despite the many challenges facing world economies and industries aviation is making realistic plans for a brighter future ahead. In this issue, a recovery in deliveries by Boeing, and continued strong demand for Airbus added to the positive activity on the leasing side - including in sale/leasebacks and financing, show this.

September 1st edition: Carriers worldwide are still expecting a strong upsurge in demand
September 1st 2022: Against a backdrop of inflation fears, high fuel costs, environmental concerns and labour difficulties, a pattern of continuing fleet adjustments is increasingly evident. Despite these immediate concerns, carriers worldwide are anticipating a strong upsurge in demand and seeking to competitively position themselves to avail of it. Many of the stories in this issue reflect these trends.

August 18th edition: Leasing finds new opportunities
August 18th 2022: Commercial aviation has made a remarkable recovery since the world’s airlines were plunged into losses of some $35 billion last year. The evidence of optimism is now widespread. In this issue, for example, we report on Moody’s predictions that global airline operating profits could exceed $20 billion next year, while leading aircraft leasing executives such as Aengus Kelly, John Pleuger and Robert Martin all comment enthusiastically on the healthy outlook across all segments, including widebodies, cargo and rotorcraft.

 

Developments - 2021

August 4th edition: A return to airline profitability
August 4th 2022: As more airlines report their performance in the three months to end June, it is increasingly apparent that some have already managed to return to profit while others anticipate that they will do so for their full year. An upturn in yield has helped to offset the impact of rising costs, as have cargo revenues for many, but it is notable that the recovery includes low cost as well as traditional carriers. Those back in the black in Q2 include United, IAG, Lufthansa, Ryanair and Singapore.

July 21st edition: Successful Farnborough Air Show marks return to 'normality'
July 21st 2022: Even if orders were on the light side, the show demonstrated that the aviation industry is coping well at a time of ongoing stress. There continues to be interest in, for example, and funds available for, the sale and leaseback market while the aircraft manufacturer’ latest commercial market outlooks remain optimistic for the next two decades. Also: a resilient aviation sector is reflected in the latest Market Outlook presentations from three of the four main commercial aircraft manufacturers. In its Commercial Market Outlook 2022–2041 Boeing says the global market is recovering just as it had projected in 2020 and it forecasts a market value of $7.2 trillion for new airplane deliveries over the next two decades

July 7th edition: Investors still interested in aviation
July 7th 2022: Despite a resurgence of fears about Covid, continuing sector bottlenecks, reflected in staff shortages, and widespread flight and schedule curtailments, there is continued evidence of strong consumer demand for air travel, underpinning positivity regarding investment in the sector. The underlying vibrancy of the leasing sector is reflected in the launch and imminent arrival of two new leasing platforms, both with strong growth ambitions and backed by substantial investment funds.

June 23rd edition: Despite huge headwinds, the outlook for commercial aviation and the providers of finance remains positive
June 23rd 2022: As IATA DG Willie Walsh neatly puts it ‘There is no way to sugar coat the bitter economic and political realities we face.’ Still reeling from its biggest ever setback, commercial aviation faces huge headwinds on a number of fronts. But it also has an enthusiastic customer base and the airlines are working hard to tailor their fleets, route networks and cost bases to meet changing requirements. Paradoxically, the damage to their balance sheets creates ever more opportunities for the providers of aircraft finance.

June 9th edition: Matching supply and demand amid rising costs and geo-political risks
June 9th 2022: In this issue we look at an aviation industry in flux, as carriers and service providers struggle to match supply with surging demand with recent reports from Moody’s Investor Services and EUROCONTROL highlighting the immediate challenges. Also: AerCap's latest moves amidst the Russian fall-out; the evolution of the eVTOL market as key players progress their plans; the battle for Spirit Airlines and SAS looks set to attract overseas investors.

May 26th edition: AerCap and SMBC Aviation Capital lead the way for lessors
May 26th 2022: The strong performance by AerCap, despite its Russian difficulties, is a testimony to the timing of its transaction with GE to acquire GECAS. Taking a $2.4 billion charge in Q1 it has covered itself in full and from here, with insurance claims already lodged, the only way is up. And the shake-up it initiated at the top of the leasing sector has continued, with SMBC Aviation Capital returning to number two, in terms of scale, through its acquisition of Goshawk.