Last year when AIN took a close look at the aviation finance industry, the prevailing sentiment among industry insiders was that if you were looking for money to finance a business jet, the money would find you. At the time, many of the aircraft finance divisions still felt they were relatively insulated from their mortgage brethren, even within the same company.
Financing, Insurance and Taxes » Aviation Financing
Issues regarding financing of aircraft.
Business aircraft buyers can expect loans to be harder to find and more costly, according to Adam Warner, president of Key Equipment Finance, Downers Grove, Ill. “There are fewer players in the finance market because some banks simply don’t have capital to lend,” he said. Those that have money are more selective and now less willing to finance 100 percent of an aircraft’s value.
More than half of Greg Renna’s customers have asked him if Center Capital Corp. is “still giving out money.”
Tomorrow afternoon Van Nuys Airport is holding a public meeting in Van Nuys, Calif., concerning the environmental impact report associated with the airport’s plan to draft an ordinance that would phase out aircraft that generate 77 dBA or more on takeoff. The seven-year phase-out would begin on January 1, with the 77-dBA limit taking effect on Jan.
The specter of aircraft repossessions is starting to loom larger over the business aviation community as more owners struggle to repay loans, according to UK-based consultancy the International Bureau of Aviation (IBA). Mark Wooler, the group’s head of consultancy, told AIN that deteriorating economic conditions are increasingly putting financial pressure on corporate operators who do not own their aircraft outright.
Grob Aerospace CEO Niall Olver has been given more time to secure fresh investors for the insolvent German manufacturer of the SPn light business jet. Insolvency administrator Dr. Michael Jaffé has recommended to the German court in which Grob Aerospace GmbH filed for insolvency on August 18 that the company’s bankruptcy protection be extended beyond the initial 30-day assessment period.
The economic health of insurance giant AIG has sparked concern among many business aircraft operators who have contacted NBAA with questions about the state of their insurance coverage.
General Electric has purchased the bulk of Bombardier Capital’s corporate aircraft leasing and financing business. The selling price of $339 million represents the “book value” of the loans and financial leases outstanding, Bombardier said.
Italian government investment group Sviluppo Italia has bought a 20-percent stake in Piaggio Aero Industries for $20 million ($22.4 million). At the same time, the Italian airframer’s existing private shareholders have injected a further $15 million ($16.8 million) in fresh capital to fund new product development and increased manufacturing capacity.
Analysts at last year’s Corporate Aircraft Transactions conference agreed that the business jet market was “extremely strong” at the time, but they also expressed doubt that the boom would continue indefinitely. “There are signs that concern us,” said David Strauss, executive director, U.S. aerospace and defense senior analyst for UBS Investment Research. “We’re uncertain how much higher the market can go.”