EBT wrote:lightsaber wrote:
Wait... HNA owns 52% of Avolon which owns CIT
CIT: 15 A339 orders
Avolon: 15 A339 orders, plus financing a number of TAP's A339s.
More correctly, HNA Capital owns a major stake in Bohai Capital, which is the parent company of Avolon. The leasing company continues to operate, take delivery of aircraft, finance them and lease them to a number of airlines around the world. The HNA link is placing a small amount of upward pressure on their debt pricing, but there is no evidence that it is affecting Avolon's liquidity or day-to-day operations. Last year it structured some debt capital so that it could not be funneled back to HNA, which should signal that it is prepared to stand on its own, if necessary.
Widebody leasing is doing fine, and benefitting from the huge amounts of capital that remains in the aircraft finance market coming not only from China but also Japan, Korea, hedge funds and other emerging markets. Narrowbody leasing is cutthroat with so many players in that market, and some lessors are seeing better returns from deploying capital into widebodies. It is different as the lease terms are longer, and the return conditions need to be a lot more watertight, but it's doable for those who know what they are doing.
BOC Aviation and Air Lease Corp (Steven Udvar-Hazy's company) are both backing the A330neo, and while it could be a bad bet, they will lead the market and others will follow. BOCA in particular has been very vocal about how most of the future capital going into aircraft deliveries - by dollar value - is shifting to favour widebodies.
AerCap have overall been selling down their portfolio, as they see returns at the moment are better in buying up their own stock rather than expanding. GECAS is in a similar boat with it selling down jets (including 737 Maxes recently), mostly because they can profit from it due to high prices.
The leasing industry has been growing strongly since the GFC, thanks in large part to strong passenger growth and low interest rates. Yes, the latter are going up but nowhere near as quick as needed to soak up the cash that is out there, and seeking assets to be deployed against.
Airbus got burned when they offered residual guarantees on the last product that needed it (A340-500s) so they're not going to jump in unless absolutely necessary. In the meantime, there are plenty of channels and a lot of money looking to go into aircraft, and I expect that will see it go to A330neos as needed.
Don't forget there are contingent liabilities in the form of buybacks on some A380's.
And Boeing is not immune, with buybacks on some 748i's and early build 787's. Plus BC offers a lender of last resort role.
Both A & B are supporting companies with ambitions to keep older aircraft commercially viable, and new aircraft in new ways. There will be a big increase in 'on demand' and hourly leases, and aircraft sharing. How soon before we see A & B house colours flying commercial services?