Aviation Finance

IGR Aviation Finance has developed a strong network of relationships with unique platform of aircraft finance services and products allowing our Aviation Finance to offer our clients far more than the traditional range of banking services. This seamless “one-stop shop” has been meticulously built, with innovation and a view to being a constant provider of aviation capital and services during different economic cycles. It is additionally supported by a strong research team.

Our Aviation Asset Management team is an integral part of our aviation platform that provides the full range of asset management services – third-party aircraft remarketing, lease management, and technical and general consultancy services – to airlines, lessors, investors, bondholders and financial institutions. Our clients receive services either as a fully packaged solution or on a standalone basis to best suit their needs.

As a lead arranger, underwriter and provider of asset-based finance to the aviation industry, we support our aviation clients around the globe in all market conditions with intelligent and customized solutions provided through our innovative Aviation platform. Thanks to our integrated approach, we serve a highly diversified client base, with an attractive financing mix for new and used aircraft. IGR’s Aviation Finance team has thus been able to generate strong financial results for our clients


Market review as at December 2018) 

 

For the commercial aviation industry, 2018 was another good year. The International Air Transport Association (IATA) estimates a US$32.2 billion net post-tax industry profit, thus below the 2017 level of US$37.7 billion. Passenger traffic, expressed in revenue passenger kilometres, was up 6.6% over the first eleven months of 2018. With a 6.1% capacity growth, the average passenger load factor increased to no less than 82%. According to IATA, during 2018 passenger yield increased by an estimated 3.2%. Overall, the market environment remained strong, thanks to solid traffic growth and relatively moderate fuel costs. Despite this, an increasing number of individual airlines came under financial pressure in 2018, mainly due to the extremely competitive market environment in various parts of the world, higher labour costs, plus fluctuations in the fuel price.

The positive development that air cargo delivered in 2017 (9.7% growth in freight tonne kilometres (FTK)) was not repeated, showing only 3.9% growth from January to November 2018 and a downward trend towards the end of the year. This moderate FTK growth results from the end of the restocking cycle, some weakness in global economic activity, and international trade tensions.

In the equipment market, Airbus took a majority stake in Bombardier’s C Series, while Boeing entered into a partnership with Embraer. The vast majority of commercial jet programmes are now in the hands of Airbus and Boeing. Sales of new aircraft slowed down: Airbus reported 747 net new orders (previous year: 1,109), Boeing 893 net new orders (previous year: 912). After supplier-related delays, production of the new generation aircraft gained momentum: Airbus delivered 800 aircraft (previous year: 718), Boeing 806 (previous year: 763). Despite the lower order intake, the backlog remains high – more than eight years of production at 2018’s level.