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Taking the next step
01 September 2007
Siqalane Taho looks at the instruments that are proving to be the trendsetters in the aviation industry.
Read more:
French optimized leasing
private equity
hedge funds
Liquidity – the word that best described the capital markets a few months ago – is slowly retreating. Professionals who were around during the last downturn will empathize.
When Japanese banks exited the aviation market in the early 1990s after the housing loan debt crisis, borrowers suddenly found themselves under the crushing squeeze of higher aircraft financing premiums. What Japanese capital had done was effectively to lower margins and turn the market in favour of borrowers.
Some German banks soon followed this trend after 2001 when most financiers were reeling from the shock that spread throughout the aviation financing market. Many specialized aircraft financing departments either scaled down operations or completely left the sector. Predictions were that pricing was on a permanent upward shift and that the industry would never again return to the levels of the late-1990s.
The past few years have seen arguably the biggest influx of capital into the...
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