CJI Global 2020: Aircraft finance and Covid-19; finding new ways to pay

Yves Le Marquand

 

Owners are increasingly looking to shift the way they pay for aircraft in response to financial insecurities arising in the wake of Covid-19, Robert Gates, head of sales Europe, Middle East and Africa (EMEA) & Asia, told fellow panelists at CJI Global.

Gates said: “The big change that we’re noticing, in terms of structure, is if you go back six or nine months, a lot of folks were very content to pay cash for the aircraft. When when they looked at their investment choices or what they could have earned in a bank deposit, it could have a made a lot of sense to do that at the time.”

Gates continued: “What we are noticing in the last month or two, people are rethinking that cash purchase. So, we are getting a lot of enquiry for corporate and high net worth customers asking about refinancing or doing a sale and lease back on the jet.”

The theory behind doing so, according to Gates, is that due to the volatility of the market, corporates are now seeing better opportunities for that cash elsewhere, be that new investments or ensuring liquidity.

Global Jet Capital’s head of sales sat on the panel entitled Spotlight on aircraft finance in EMEA alongside Marie-Laure Gassier, senior adviser, BNP Paribas; Chris Partridge, head of private wealth management aviation, Deutsche Bank; David Minty, head of aviation finance, Investec and Frank Volz, senior transaction manager, UBS.

An uptick in enquires has been reported widely in the charter sector and Gassier said the same is true of aircraft financing. She said whilst business went quiet for approximately two months after mid-March and the pandemic’s onset, since then BNP Paribas has seen a growing number of enquires mainly for pre-owned aircraft, but also for new jets.

“I think people need to travel whether for leisure or for business and flying commercial, at the moment, remains very complicated. Private aviation remains a very viable solution and it’s probably going to last, so we are seeing more requests and I hope it may continue,” said Gassier.

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