www.pwc.com Aviation finance Fasten your seatbelts January 2013 Foreword Shamshad Ali – Partner T: +44 (0)20 7804 9600 M: +44 (0)7714 7 08756 E:
[email protected] Aviation financing is a hot topic and The ongoing global economic likely to remain so over the coming uncertainty, the European Sovereign years, as the demand for financing debt crisis, the recent downgrading of deliveries of new aircraft peaks at a time several European banks and increased when long term financing becomes difficulty of accessing US dollar funding unattractive for some of the has raised funding pressure. A number incumbent banks. of predominantly European banks who have historically played a key role are On the one hand, record order books of retracting from the market. This is aircraft manufacturers reflect a period causing tensions in the funding market, of strong orders buoyed by both new which have been heightened by the aircraft types and strong demand in the ongoing bank deleveraging process, emerging markets. On the other, there which in part reflects the impact of new are a number of headwinds in the regulations such as Basel III. aircraft finance market which may make these orders more difficult to finance, Conversely, in tough economic times and potentially, more expensive. and a low interest rate environment attractive yields are harder to find. Investors are looking for hard assets with good returns. 2 | Aviation finance| PwC Foreword Neil Hampson – Partner T: +44 (0)20 7804 9405 M: +44 (0)78414 97220 E:
[email protected] As a result we expect attractive We expect acceleration in the ongoing opportunities to emerge in the aviation shift of financing from the traditional financing sector for investors looking to aviation banks in the West to new deploy large amounts of capital players from the East.