2019 Aviation Finance Market Forecast
Your indispensible guide to the aviation finance market in 2019
Identify the markets, structured products and assets offering the greatest return on investment and best potential for growth.
A rise in the cost of fuel/oil will accelerate a reduction in A320ceo and 737-800 values and lease rates
Nearly 20% of the airlines tracked by Ishka are entering 2019 with a negative outlook on their financials
The main threat to the Airbus/Boeing duopoly are the OEMs themselves with their production and supplier issues
We may find that the peak of the market was early 2018
We are delighted to introduce the latest version of Ishka Vista: 2019 Aviation Finance Market Forecast.
The commercial aviation business continues on its optimistic path, where the requirement for new aircraft funding is increasing year on year and with close to 2,000 deliveries anticipated, is expected to reach US$150 billion in 2019.
Traffic growth is reassuringly expected to continue in line with GDP and a supportive macro-economic environment. The airline industry itself is in a better shape today, thanks to consolidation. The restructuring that occurred between 2008 and 2014 created a stronger set of airlines especially in the US, the largest market.
These preparations have been fortuitous and as this report will reveal, there are a growing number of factors that will test the delicate balance between profit and loss for most airlines and therefore, also for lessors and asset owners. One experienced observer recently reminded us of (a variation on) the Minsky Rule: “Prolonged periods of stability lure investors and bankers into ever riskier behaviour that ultimately triggers a collapse.”
So, with aircraft deliveries still at record levels, an active secondary market and bank liquidity still running at or near all-time highs, the aviation finance market maintains its buoyant appearance. Beneath the surface however, elements of uncertainty are growing, from fuel prices, through interest rates, to capacity issues.
As markets, traffic and travel patterns evolve, this leads to changes in demand for different types of aircraft; some market sectors are becoming riskier, politically and socio-economically and the competition to both acquire and place aircraft is driving aggressive transaction terms.
When airlines also start showing signs of ‘over extending’, with costs rising faster than revenues, it becomes increasingly critical to be doing the right deals, with the right assets and airlines, at the right price.
In this second edition of Ishka Vista, we have considered all the signals, trends, events and supporting data, and addressed the critical issues impacting the investment landscape over the next 12-18 months, enabling investors, lessors and financiers to effectively compete in tomorrow’s markets.
You’ve heard from the sell side, now make sure you receive an independent and impartial view on the outlook for the aviation finance market in 2019 to:
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