Cracks emerge in global aviation finance boom
Shakeout expected among smaller lessors in aircraft finance industry
Hong Kong — An unprecedented boom in the $280bn aircraft finance industry is showing signs of faltering as rising interest rates, cut-rate competition and higher oil prices trigger a shakeout in a sector that has attracted a flood of Chinese funding. Conferences in Hong Kong last week saw more than 1,000 financiers, lawyers and airline bosses talk up the fundamentals of an industry that has emerged as a flourishing asset class globally, but in contrast to previous years the mood was one of subdued optimism even as corks popped on new deals. Concerns about central bankS tightening, trade rows and currency swings could blow some froth, they cautioned. “I think the party is over in terms of lower interest rates,” said Robert Martin, CEO of Asia’s largest-listed aircraft lessor BOC Aviation. The sector veteran of three decades noted that smaller players who had not matched their funding needs to liabilities, unlike larger ones like his company, would find it difficult to ride out any vo...
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