Aviation Finance
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Aviation Finance - Vol 2 No.5 March 1st 2012
Aircraft Market

Asset trades continue in leasing industry

Recent asset trades highlight the ongoing interest in narrow body aircraft and also suggest that lessors can see value in used aircraft that are on lease with quality airlines over an extended period. Aviation Finance Consulting Editor Joe Gill quotes a recent perspective offered by AerCap's CEO Aengus Kelly on the difference between 2007 and 2012 with regard to lease margins.

Manufacturing

Is shipping a warning signal for aircraft assets?

Aircraft manufacturers have reported record order books over the past two years. Senior executives in the leasing sector, have been cautious about the rate of production being planned by OEMs in response to order flow in recent years. The aircraft market should perhaps take heed of developments in recent years in the shipping sector where a glut of new capacity ordered in the period up to 2008 saw significant downward pressure on prices as demand failed to match supply.

Round Table: Taxation

Singapore extends its ALS scheme for five years to build on gains in the lessor market

From March 1st 2012, Singapore has extended its Aircraft Leasing Scheme (ALS), as part of its Budget 2012, for 5 years - another positive development for a jurisdiction that is becoming more attractive for lessors. The implications of the extension of the ALS scheme are discussed in this Taxation Round Table interview with Gordon Lawson, tax partner at KPMG in Singapore, Yvonne Thompson, tax partner at PWC, and John Hannigan, director of EMEIA FSO tax at Ernst and Young, conducted by Aviation Finance's Sarah McCabe.

Airline financing and developments

US Government signals increased financial support for aircraft manufacturing

Financial difficulties continue to surface as US Government signals increased financial support for aircraft manufacturing.

  
Aviation Finance Vol. 2 No.5

In this issue: "a positive for investment in the right place in the aviation finance complex"

A recurrent theme of recent months have been the warnings, many of them emanating from the lessor community, of the dangers of overproduction by OEMS of aircraft worldwide. In this publication in recent issues we have published such warnings from the CEOs at AWAS, and FLY, and, in this issue, by AerCap's Aengus Kelly.

Perspectives

GECAS highlights opportunities in Africa and launches aviation resource network

Africa offers huge potential for growth in aviation and aircraft lessor GECAS forecasts that the aviation industry in Africa will continue to grow as economic conditions improve and more of the 1 billion people on the continent choose to travel by air. It also estimates that approximately 25 per cent of the Western-built narrow body aircraft currently operating in Africa will be retired in the near term, leaving a clear gap in the market. In an initiative aimed at supporting the growth of the industry throughout the continent, GECAS this month launched an innovative web-based portal of aviation law resources in the continent, called the AERIAL Network. Aviation Finance's Sarah McCabe spoke to the portal's creator, David Bartlett, about the project.

Fuel Prices

Airlines rely on hedging and newer jets to fight rising oil prices

With oil prices rising strongly, the demand for new vintage aircraft and the need to recycle older planes will most likely rise. This will increase the demand of new planes and particularly those that offer genuine fuel advantages.

Lessor financing and developments

Fears of aircraft overproduction highlighted as lessors repossess planes

AerCap chief executive Aengus Kelly warned against the overproduction of aircraft this month when he questioned the viability of huge orders made by small airlines. Another point of interest was Oaktree Capital Management's move to sell its majority stake in Jackson Square, which comes at an interesting times given the state of commercial lending but also the strength of the RBSA sale and IPO of Air Lease.