Aviation Finance

Developments

In the latest edition of Aviation Finance (February 20th 2020)
Latest issue: a number of articles reflect on the importance of pricing risk appropriately and the implications for investors when this is a mismatch. This concern comes at a time when the industry is still in a robust position overall. But the potential impact of Covid-19 on airlines and their ability to meet lease commitments, coming on top of the still unresolved MAX crisis, underscores the potential vulnerability of the sector. This may, as ALC’s John Plueger has suggested, test the mettle of newer entrants.


In Aviation Finance (February 6th 2020)
In the February 6th issue: the launch of three new securitisations and announcements of a number of substantial unsecured banking facilities for lessors indicates a continued appreciation of aircraft leasing's strong fundamentals; The multifaceted response to climate change has seen IATA creating a dedicated exchange on which airlines can trade carbon credits, the establishment of a new working group by the AWG and the use of big data based technologies to optimise fuel efficiency. Meanwhile the design of an electric motor to drive a proposed 186 seater, 300nm short haul electric aircraft is about to progress from the drawing board to the test bench; The way in which Ryanair is positioning itself for strategic opportunity on the MAX10; Airbus continues to iterate the engineering capabilities of its A220 model; Moody's take on DAE’s business model.

 

Perspectives

Trevor Ricards, SVP Asset Trading, GECAS on the secondary equity market for securitizations






DVB's Kieran O'Keefe on the lease rate factor (LRF)
The decline in lease rates analysed
Virginia Fox on GECAS' risk model
Milestone's Greg Conlon on the rotorcraft business model
Peter Chang on relationships between OEMs and lessors
IBA's Stuart Hatcher on values and lease rates

Analysis

In Aviation Finance January 23rd 2020 issue
In the January 23rd issue: Competitive carriers' backlash against UK Government move to subsidise Flybe; Aircraft Leasing Interview: New CDB Aviation CEO; Investment Banking - Credit Suisse's SCALE new aviation investor platform; ‘Appraiser of the Year’ IBA on the trading, values and lease rates outlook; GATS; Financing developments; Report: aviation’s ‘black star’ on emissions is undeserved, says Udvar-Hazy; Lessors’ unsecured assets reach all time high at $95bn.

CDB Aviation records 'strong business activity' and transactions involving 89 aircraft in 2019
20th January 2020: CDB Aviation, a wholly owned Irish subsidiary of China Development Bank Financial Leasing Co., Limited, reported today that the year 2019 marked 'another period of strong business activity and growth', in which it executed transactions involving 89 aircraft. “This past year’s continued growth in our operations is evidence of our unwavering commitment to execution and progressing our highly competitive position in the world’s key markets,” said newly appointed Chief Executive Officer Patrick Hannigan.


Avolon publishes its annual 'fearless forecasts', with, top of the list, 'MAX will safely return to revenue service in 2020'
Dublin, 19 January 2020: Avolon, the international aircraft leasing company, issued its 2020 outlook paper titled ‘Navigating Through Turbulence’. The paper, written by Avolon’s Jim Morrison and Steve Mason, reviews aviation industry trends in 2019 and offers its 'fearless forecasts' for 2020, previously authored by Avolon's Dick Forsberg. The Max may be coming back in 2020, but, see also IBA's analysis, published last week, on the serious implications it will have for values and fares in 2020.

 

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Financing & Risk Strategies

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Avolon announces pricing Of US$1.75 billion Senior Unsecured Notes Offering
9th January 2020: As anticipated in Aviation Finance on January 9th, Avolon has provided pricing details of its US$1.1 billion Senior Unsecured Notes due 2025 and US$650 million Senior Unsecured Notes due 2027.


In the January 9th 2020 edition of Aviation Finance
Boeing's important step to recommend flight simulator training for all MAX pilots; Boeing's difficulty - Airbus' opportunity as year-end push helps it hit revised delivery target for 2019; CDB Aviation appoints Pat Hannigan as CEO in succession to Peter Chang; Airlines create equity value, but with significant regional variations; BOC Aviation and Spirit Airlines confirm Airbus orders; Titan Aviation and Bain Capital Credit in $1 billion freight JV; new deliveries by CDB Aviation to Mexico and AerCap to Pakistan start-up; Russian and Chinese plane makers spread their wings.


In the December 12th edition of Aviation Finance
In the final issue of 2019: we take a series of seasonal, end of year looks at key elements of the aircraft financing ecosystem, including: airline profitability; recruitment in the 25,000 person-strong global airline finance market; the 'Top 20' risk assessment by top aircraft finance executives; trends likely to affect aircraft lease rates in 2020. Interview with Trevor Ricards, SVP with responsibility for US Asset Trading at GECAS, on its options in the ABS market.

 

Analysis

The November 28th 2019 edition of Aviation Finance
In the issue: Moody’s Investor Services says 'the aviation finance industry can take much credit in displaying the skill and discipline it has in managing the difficulties and challenges of the past year'; Also SMBAC's profits growth recovery; MAX edges closer to return.


The November 14th edition of Aviation Finance
In the issue: New GECAS CEO Greg Conlon speaks to Aviation Finance. Also: progress by Europe’s leading low cost carriers, with growth in RPKs. Marubeni Corporation and Mizuho Leasing's acquisition of Aircastle at a premium; Airborne Capital joins this year’s long list of ABS issuers.

The October 31st edition of Aviation Finance
In the October 31st issue: There is an abundance of evidence to demonstrate the continued vibrancy of the commercial aviation industry and the aviation finance sector that supports it marked by developments in the securitisation market, which is close to hitting last year’s record level of activity. It is also supported by latest data from IATA and the huge order for 300 new aircraft by Indian LCC Indigo.


The October 17th edition of Aviation Finance
In the latest issue: While there are distinct differences in the business models behind the leading aircraft leasing platforms, it is evident that trading is a core strategic component in all of them. That was demonstrated at AFCDublin, 2019 this week. In this issue we focus on some of these. We also note the launch of three more ABS offerings in a busy Q4 securitisation market.


#AFCDublin 2019
October 15th 2019: #AFCDublin 2019 featured interviews with Aercap CEO Aengus Kelly and CDB Aviation's CCO Patrick Hannigan, conducted by Aviation Finance's contributing editor Joe Gill. Following an address by Virginia Fox, Head of Risk of GECAS, on the ever-important matter of risk management, AFC2019 features the first ever CFO Forum, featuring a panel of the world's top aircraft lessors on the 'finance function of the future', chaired by EY's Danny Buckley. More details: here.


Apollo and Athene's acquisition of GECAS' PK AirFinance lending unit
Apollo Global Management and Athene Holding Ltd are to purchase PK AirFinance with Apollo acquiring the PK AirFinance aircraft lending platform and Athene acquiring PK AirFinance’s existing portfolio of loans. Alec Burger, GE Capital President & CEO, said, “Apollo’s vast lending experience, complementary platforms, and exceptional track record across diversified assets and geographies make it the ideal partner to accelerate PK AirFinance’s growth. This sale is aligned to GE Capital’s overall strategy to become smaller and simpler, and our commitment to reduce our assets by $10 billion in 2019 is now more than halfway complete".