Aviation Finance

Aviation Finance - Vol 2 No.2 January 19th 2012
Mergers & Acquisitions

Sumitomo RBSA acquisition for $7.3 bn. of major significance to aircraft leasing sector

The acquisition of RBS Aviation Finance by Sumitomo Misui Financial Group is a groundbreaking moment for the aircraft leasing industry. It is historic in a number of ways; it is the largest ever transaction in the leasing space, while also, incidentally, being the seventh largest overseas M & A in Japan's corporate history. That the price achieved is in excess of book value is a statement of the investor interest there is in the sector.

Equity

Morgan Stanley expresses confidence in long term prospects of the aircraft leasing sector

In a comprehensive survey of the aircraft leasing industry Morgan Stanley analysts expect 'softness before strength' in the leasing cycle but remain optimistic on the longer term drivers of leasing demand.

Tax Treaty Network

Expanding tax treaty network increases Ireland’s attractiveness for aircraft leasing

Ireland’s supportive environment is one of a number of critical factors in maintaining its place as a world leader in the aircraft leasing space. In particular, many of Ireland’s domestic tax laws give rise to low effective tax rates and allow for efficient repatriation of profits to stakeholders.

Airline Financing and Developments

Dollar crunch and eurozone worries continue to loom large

A shortage of dollar funding and instability in European banks has resulted this month in further evidence of a drawback by European banks, notably French, from air financing in 2011 as well as the shrinking of airline growth plans. However positive industry developments are still very evident; Aviation Capital plc has recently increased its stake in Capital Lease Aviation; AMR Corp gave evidence of the massive savings that airlines can make by cutting leases as part of bankruptcy proceedings.

The RBSA deal and Ireland's Leasing Industry

RBSA Deal - the implications for the Irish aircraft leasing industry

Royal Bank of Scotland Group Plc’s sale of its aircraft leasing business, Dublin-based RBS Aviation Capital, to Japan’s Sumitomo Mitsui Financial Group Inc. for c. $7.3 billion, involves a number of globally significant superlatives, but for Ireland’s aircraft leasing industry, and the IFSC, it is an even greater superlative.

  
Aviation Finance Vol. 2 No.2

In this issue

Commenting on last year's 'year of two halves', Dick Forsberg's review in this issue highlights the 'especially swift' reversal of fortunes seen in the air cargo market, often a leading indicator of the fortunes of the wider industry, followed by a slowing in passenger demand. But there have been recent signs of an improvement in this indicator, as well as another positive - the successful disposal of RBS Aviation Capital - the biggest aircraft leasing acquisition in history.

Perspectives

The 2012 aviation financing environment - an operating lessor's perspective

Dick Forsberg, head of risk & strategy at Avolon, assesses the likely 2012 environment for airlines financing, aircraft values, and the overall aviation financing cycle, concluding with six new year resolutions, written from an operating lessor's perspective

The Cutting Edge

Lessors showing interest in executive jets as market is predicted to recover

Following sharp declines in value from 2008 to 2010, prices for Ultra Long Range and Large Cabin jets have remained stable over the past two years. High volatility in prices has seen many mainstream aircraft lessors avoid this highly specialised segment but it is now an area that new entrant lessors are investing in. The potential of markets such as China, which accounts for only two per cent of global deliveries in the segment, has led to predictions that executive jet deliveries will return to 2007 levels by mid-decade.

OEMS' Market Shares

The battle for market share in 2011 between the big OEMS

The commercial aircraft market continued its strong momentum in 2011, highlighted by figures released by Airbus and Boeing detailing their order and delivery records for the year. Together the two OEMs delivered over 1000 jets for the first time in 2011.

Dublin Airfinance Conference Preview

14th European Airfinance Conference in Dublin promises to be biggest ever

The continued traction behind the Euromoney-promoted conference in Dublin reflects Ireland's strength as one of the pre-eminent global centres for aircraft leasing. Next week sees the annual influx into Dublin of aviation finance professionals based around the networking and conference opportunities of the European Airfinance Conference, between January 24th and Thursday 26th.