NBAA Convention News

Global Jet Capital Survey Yields Financing Data

 - November 1, 2016, 11:30 AM

While the international business jet markets, particularly in the BRIC countries, have cooled considerably over the past several years, the U.S. market of late has been showing signs of resurgence.

The U.S. is currently home to approximately 56.4 percent of the world’s midsize and heavy business jets, and based on analysis of JetNet data by aircraft finance provider Global Jet Capital (Booth 2253 and Static S-34), in 2014, more than 530 midsize or larger bizjets were delivered globally. Approximately 44 percent of them went to the U.S. Last year that number rose to 578 deliveries worldwide, 277 of which were to the U.S., or 48 percent of the total.

According to a recent survey commissioned by the financier (which debuted in 2014 and earlier this year acquired the bulk of GE Capital’s former business jet portfolio), among the 200 industry professionals queried, nearly 60 percent say the U.S. market is currently “very attractive” for business aviation finance companies, while an additional 31 percent describe it as “attractive.” The next most favorable country or region is Canada which earned overall “attractive” ratings of nearly 70 percent. “The U.S. is by far the biggest business aviation market in the world, but it is the most attractive,” said industry veteran and Global Jet COO David Labrozzi. “The U.S. economy remains one of the most attractive on the global stage, and there is a strong correlation between this and prospects for the business aviation sector.”

When the respondents were asked which aircraft are currently most attractive to provide financing against, most indicated a preference for heavy and large business jets, with 68 percent describing them as attractive assets as compared to 44 percent for medium-cabin, four percent for light jets, and 16 percent for turboprops.

Based on that determination, nearly 60 percent of those interviewed believe the U.S. will become even more attractive to business aviation finance companies over the next three years. “What is encouraging about our research is that industry professionals are optimistic about the future of the U.S. business aviation market,” added Labrozzi.

Yet, the first quarter of the year showed a 4.7 percent decline in new jet deliveries when compared to the same period a year ago, and more than half of those surveyed believe a lack of business aviation financing contributed to the decrease. “A lack of available financing for those looking to buy mid- to heavy business jets was one of the main reasons we entered this market,” said Labrozzi, who formerly headed up GE’s business aircraft finance division. “Some of the traditional lenders were not in a position to meet demand, despite many of the requests for finance being attractive for lenders.”

The Florida-based company’s survey also revealed that 51 percent of respondents expect that the availability of financing for the sector will increase between now and 2019, with nearly 10 percent anticipating a “dramatic” rise.  

Global Jet Capital is backed by a trio of financial firms including GSDO Capital Partners, The Carlyle Group, and AE Industrial Partners. It currently has $2.5 billion in assets under management, with the current committed lending capacity of an additional billion.