The private aircraft financing market in China has matured over the past several years with many sources of funding available for those wishing to purchase airplanes according to the experts here at ABACE. “I don’t think there is any lack of financing alternatives available,” said Jeffrey Lowe, general manager of aircraft ownership consultancy Asian Sky Group. “Pretty much all the international lenders are here and all the Chinese lender banks are involved in business aviation as well. A lot of them have set up leasing arms, so they are all diving in head first.”
Financing, Insurance and Taxes » Aviation Financing
Issues regarding financing of aircraft.
Minsheng Financial Leasing Co. (MSFL), Asia’s largest business jet leasing firm, is climbing steeply to increase the size of it inventory even more. On perhaps one of the clearest days in ABACE memory, Minsheng confirmed yesterday that it had placed orders with both Gulfstream and Bombardier in the fourth quarter of last year.
Russia’s Sukhoi Civil Aircraft has long claimed its Superjet 100 offers a level of technical sophistication that surpasses that of any Western regional jet on the market. Now, a new funding system state-controlled Vnesheconombank (VEB) devised with Sukhoi to support export sales of the Superjet 100 promises to place the Russian regional jet on equal footing with Western models in terms of financing cost as well, according to VEB deputy chairman Alexander Ivanov.
Southeast Asian carriers VietJetAir and Myanmar Airways maintained the region’s strong growth-curve yesterday, announcing new airliner deals worth almost $7.4 billion. At the Singapore Airshow, Vietnam’s VietJetAir gave Airbus a $6.4 billion contract covering firm orders for 42 A320neos, 14 A320ceos and seven A321ceos.
The Air Line Pilots Association sent a letter Tuesday to Senate Banking Committee chairman Tim Johnson (D-S.D.) and ranking member Mike Crapo (R-Idaho) urging the committee to impose tighter oversight on the Export-Import Bank of the United States and Congress to work toward eliminating financing for widebody aircraft to foreign carriers.
The bankruptcy of Danish airline Cimber Sterling in May 2012 has threatened to shake the foundation of the country’s engine leasing business after a Danish bankruptcy court ruled that some of the engines fitted to Cimber Sterling aircraft belonged to the airframes and the engine lessors bore no right to them, according to lawyers representing the leasing entities.
On the heels of secured note private placement that brought in $575 million in cash earlier this week, helicopter lessor Milestone Aviation Group announced today that it has closed on an unsecured $200 million revolving credit line. This new facility increases Milestone’s unsecured borrowing capacity to $450 million and revolving borrowing capacity to $800 million.
Helicopter lessor Milestone Aviation Group announced today that it has successfully completed the private placement of $575 million of senior secured notes. The company intends to use the proceeds to fund the continued expansion of its business and to refinance existing debt. Seventeen investors, 16 of which are new to Milestone, participated in the private placement. The deal positions Milestone “to continue delivering for our operating partners for years to come,” said company president Daniel Rosenthal.
Airlines will continue to enjoy ready access to financing for new aircraft acquisitions, as funding sources such as bonds grow in importance as options for financial support, according to Boeing’s seventh annual aircraft finance market forecast. The report, released in London on December 10, said that while export credit agency funding will decline in significance in the coming years, the industry will see a more even balance among carriers’ use of bonds, leases and loans from banks and capital markets.
Traditional measures point to a recovery in the economy in general, but the business aviation sector has yet to enjoy it. On the up side, credit has loosened somewhat for newer aircraft, as lenders find niche markets for themselves. For many buyers, however, cash remains king.
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