EBACE Convention News

Global Jet Capital Sees Increase in Leveraged Financing

 - May 17, 2019, 7:00 AM
Simon Davies, Global Jet Capital vice president of sales, UK, Middle East, and India.

Global Jet Capital (GJC, Booth Z115), has seen an increase in activity in early 2019 for both new and preowned aircraft, with demand principally focused on long-range, large-cabin aircraft, according to Simon Davies, vice president of sales for the UK, Middle East, and India.

“Relative to the market, the Middle East has shown signs of shaking off the malaise that hit in late 2018 with resurgent growth in opportunities in 2019,” he said. “We remain actively involved in providing alternatives to the Middle Eastern aviation community.

“Generally, most of the people who we [interacted] with during the year have expressed a more optimistic view for 2019 in the region,” he said. “The demand continues to shift from the use of cash-only toward leveraging financing.”

Saudi Arabia is growing in confidence, following a change in the regulatory landscape mandated by the General Authority for Civil Aviation at the beginning of the year. New rules call for aircraft to be registered in-kingdom, and this will lead to the creation of additional FBOs and potential fleet expansion by the larger operators.

“The Saudi Airshow in March seems to have [led to] a positive outcome for business aviation in the region,” Davies said. “The number of opportunities that we are seeing in the kingdom has picked up in 2019. The general consensus appears to be that 2019 will be a stronger year than 2018. We continue to have an appetite for the right opportunities arising in Saudi Arabia.”

The UAE market had become quite active in the last few months, he said. “[It] has seen a good mix of new and preowned aircraft sales in 2019, but like other countries in the region, the focus for users remains on the traditional favorite models: the long-range, large-cabin aircraft. Additionally, we’ve observed growth in demand for the financing solutions that we specialize in—both leases and debt products—versus strictly paying cash.”

The Indian market continues to remain relatively busy for aircraft acquisitions as users on the subcontinent start to think about upgrading their existing aircraft. “The mix of aircraft types remains slanted towards the larger-cabin aircraft, but we are also seeing activity in the mid-size market,” he said. “Despite some unique challenges, India is a vibrant market that continues to generate activity as users upgrade to their next aircraft, whether new or preowned.”

GJC has seen an increase in interest in the operating lease product, but debt financing is still a key solution too. “The Indian market has faced [difficulties] in the past about how to finance aircraft with a local Indian registration,” he said. “GJC has met this challenge and will continue to offer both lease and debt financing solutions to interested parties in India.”

The United Kingdom is also a location that Davies is active in. “We’re seeing growth across all sectors of the business aviation market in the last few months,” he said. “While it seems the region is generally cautious about the implications of any Brexit solution, which consequently may have an impact on the business aviation industry there, we are noting that more users seem to be deciding to step forward and make aircraft acquisition decisions.”

The UK is becoming more active as demand for financing grows in conjunction with the growth of aircraft acquisitions. “Most of these acquisitions seem to be driven by people who have decided that they can no longer defer the acquisition decision until a Brexit outcome has been finalized,” he said.

“Although geopolitical issues are certainly affecting the global economy, and in turn, the corporate aircraft market, high net worth individuals and companies around the world have never had greater need to efficiently and effectively run their global enterprises from both a competitive and security perspective. GJC looks forward to a strong performance for 2019, buoyed by developments in the year to date.”