Jetcraft calls on banks to support bizav
Aircraft broker Jetcraft is calling on banks to work more collaboratively with the business aviation industry to support growth in the sector. According to Jahid Fazal-Karim, shareholder and board member of the U.S.-based company, it has been increasingly difficult to obtain credit because of the worldwide economic downturn. Only high-net-worth individuals or companies that are asset rich, such as AAA-rated entities are able to secure loans to buy aircraft. He said, “Clients who don’t need financing are offered loans,” Fazal-Karim told AIN. “People with good business models who want to make fleet orders and can show decent earnings can’t get financing. There should be more availability for loans. Banks need to fund businesses.”
His assertions were backed up by comments made at the recent Corporate Jet Investor Finance Conference that took place last week in London. “Banks should be willing to fund businesses. Criteria for financing have increased,” said Sean McGeough, Hawker Beechcraft’s European president.
Fazal-Karim speaks with authority on the industry. His company posted its best ever yearly results for 2011 with 54 transactions. Of these, 20 percent came from the U.S., with half of the rest originating in Asia–60 percent of those from the Greater China region.
He added that he had observed a slight uptick in the U.S. in the first quarter of this year, but cautioned that the market appetite is still for larger aircraft. “There is lots of availability of planes at the lower end, but if people can’t get $6- to $7 million to buy a used Hawker Beechcraft or Learjet, they will go back to charter or leasing. Banks are too risk averse,” said Fazal-Karim.
Jetcraft Asia is about to establish two offices in Asia to support its growing customer base in the region. Karim expects to set up shop in Hong Kong and Shanghai in the next couple of months.