Aviation Finance

Developments

Lessors to the fore as Farnborough opens strongly
July 17th 2018: Early order announcements at the 2018 Farnborough Air Show see aircraft lessors feature strongly with an MoU for 80 Airbus A320neos from an unidentified lessor a standout deal from the first day. Reports suggest that ICBC Leasing are behind this deal which, at list prices, could be worth $8.8 billion. Boeing and Airbus racked up $43 billion in deals on day 1 which included debut direct orders from lessors Jackson Square Aviation and Goshawk Aviation. In the last issue of Aviation Finance a total order and MoU total of 900 was predicted with lessors expected to have a 40 per cent share of the order action at the show.


GECAS orders 35 additional 737-800 Boeing converted freighters
July 17th 2018: GECAS and Boeing have reached an agreement for 35 additional 737-800 Boeing Converted Freighters at the 2018 Farnborough International Airshow. The deal, which includes 20 firm orders and an option for 15 more, would take GECAS’ 737-800BCF order book from 15 to 50 and enable GECAS to serve the growing express air cargo market.

 

Perspectives

AFIC's first year

Former Eximbank air chief Robert Morin discusses AFIC's first year in 2017, when it closed deals on 16 Boeing aircraft, and on its accelerating growth in 2018.

ELFC's Jon Sharp on the engine leasing market
FLY's Colm Barrington on its AirAsia deal
SMBC AC's Brian McArdle on the JOLCO market
Goshawk's Ruth Kelly on aircraft trading
CDB ALF's Peter Chang on its new model platform

See the Aviation Finance Perspectives Series here.

Analysis

GECAS OKs deals for six aircraft with two Chinese airlines
July 16th 2018: GECAS has signed a purchase/leaseback and PDP financing deal with China's Okay Airways for two Boeing 737 MAX 8s as well as a four aircraft deal with Hongtu Airlines for A320neos from its own orderbook.


The latest edition of Aviation Finance is published
July 12th 2018: In the latest issue of Aviation Finance: Boeing's deal to acquire control of the commercial E Jet operations of Embraer; the reveal by Airbus of its new regional jet asset, the new Airbus A220, and the possible opportunities that this consolidation could bring for an aircraft such as the Mitsubishi MRJ. Also: the prospects for Farnborough with the help of IBA; What really makes Lease Rate Factors tick by Kieran O’Keefe of DVB Bank and at the implications of a recent CJEU ruling on liability for compensating air travel delay. And, latest speaker announcements for our aviation star-studded annual conference on October 3rd in Dublin Castle, Ireland, which will consider some of the really transformative issues facing the future of aircraft financing.


CDB Aviation Lease Finance completes first transaction with SAS, delivering 6 A320-200neos
July 11th 2018: CDB Aviation Lease Finance DAC (“CDB Aviation”), a wholly owned Irish subsidiary of China Development Bank Financial Leasing Co., Limited (“CDB Leasing”), announced the last delivery of a fleet of six Airbus A320-200neo aircraft to Scandinavia’s largest airline, SAS, as part of a sale and leaseback transaction commenced in March 2017.

 

From Our Latest Issues:

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Financing & Risk Strategies

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The June 28th edition of Aviation Finance is published
June 28th 2018: In the latest issue of Aviation Finance: We interview Goshawk Aviation's Ruth Kelly on the lessor's acquisition of SALI which propels the company into the Top 10 of global aircraft lessors; SMBC Aviation Capital's Peter Barrett speaks with Aviation Finance about his company's plans following a record year, lease rates, placements and transitioning to new technology aircraft; We analyse CALC's business model as its Chinese aircraft recycling swings into action; Airlines to deliver ROIC of 8.5% for 2018; Infrastructure deficit likely to constrain airline growth in Europe; GECAS and Oz Management close $700 million ABS; Avolon establishes JV with HK asset management firm.

Goshawk Aviation leaps into Lessor Top 10 with Sky Leasing deal
June 22nd, 2018: Goshawk Aviation is to acquire SKY Leasing’s Irish subsidiary in a move that will swell Goshawk's fleet by 51 aircraft, bring its total fleet to 183 aircraft with a value of $9.1 billion. The move also adds 17 new customers to Goshawk's client list. The deal is to be financed mainly through unsecured debt financing with the financing profile of the transaction expected to be overall credit enhancing to Goshawk as it will diversify its asset base and increase unencumbered assets.

Aircastle assigned investment grade ratings from Fitch and S&P
NYSE-listed aircraft lessor Aircastle has been assigned a first time long-term issuer default rating of BBB- by Fitch Ratings which followed shortly on from S&P Global Ratings upgrading Aircastle's corporate credit rating to BBB-. Reaching the investment grade milestone shows 'the extensive progress' the lessor has made in recent years says its CEO Mike Inglese.

 

Analysis

Nordic Aviation Capital's fleet passes 400 hundred aircraft following latest deals
The acquisition of the aircraft assets of Aldus Aviation Fund by Nordic Aviation Capital (NAC) sees the regional and turboprop leasing specialist grow its owned fleet beyond 400 aircraft. The lessor has also closed a sale/leaseback deal with new customer Philippine Airlines.

GECAS and PK AirFinance in 51 aircraft financing deal with Lion Air
GECAS and its wholly owned subsidiary, PK AirFinance have a agreed a significant aircraft financing transaction covering a total of 51 current and new technology narrowbody aircraft operated by Lion Air Group, which is the lessor's largest customer in Southeast Asia. GECAS has also agreed a 12 aircraft deal with India's Jet Airways.

China tariffs: low impact on Boeing, a likely prelude to serious trade talks
As the threat and counter-threat of tariffs between the US and China continues, the aviation industry is coming to terms with what the longer-term implications might be. Boeing was quick to pour oil on troubled water, pointing out that as currently proposed China's aircraft weight related tariffs would only affect one model in its 737 MAX family.

Despite increasing run rates a glut of narrowbody aircraft unlikely to materialise
As Airbus and Boeing continue to ramp up their narrowbody run rates to new record levels IBA's Lewis Leslie analyses how this may affect the attractiveness of certain narrowbody models, values, aircraft supply, retirements and lease rates. He says 'overall an increase in production rates is positive and we support this high backlog however, the rate of new aircraft entering into service needs to be steady to ensure an oversupply in the market does not occur.'

A321LR lays down another marker
The Airbus A32LR has laid down another marker for its credentials as a long haul narrowbody asset by completing a near 11 hour direct flight between the Seychelles and Toulouse, France. The flight covered a distance of 4,700 nautical miles on March 29th and was configured as if carrying 162 passengers. The long distance flight follows hot weather testing in Sharjah.

BBAM negotiates 132 aircraft deal with AirAsia
In a deal which demonstrates that the appetite for aircraft portfolio acquisitions evident last year has continued into this one, BBAM and its capital partners, Fly Leasing Ltd., Nomura Babcock & Brown and Incline Aviation, are acquiring a total of 132 aircraft from AirAsia Berhad and its Asia Aviation Capital subsidiary. AAB's options on 50 new A320neo family aircraft and a $50 million investment in Incline Aviation by AAB are also part of the deal.