Abstract
Frost & Sullivans Aerospace Financial Benchmarking and Analysis (FBA) service presents a
broad financial outline of the aerospace industry, highlighting major market and financial trends in
key growth segments. It provides a comprehensive financial analysis of the leading aerospace firms
to support the investment and financial analysis needs of decision makers in the aerospace arena.
The current study within the service focuses on the world aircraft leasing and financing industry,
including the following three key growth segments: business jets, regional jets, and commercial
aircraft.
Growth Driven By the Improving Health of the Airline Industry
The aircraft leasing market is largely influenced by the success or failure of the airline
industry, which is highly cyclical, sensitive to slight economic changes, and highly competitive.
Since 9/11, lease margins have generally declined due to surplus aircraft, declining demand for air
travel, airline bankruptcies, repossessions of aircraft, declining airline revenue yields, and
worldwide health concerns.
However, since the second half of 2003, the fundamental evaluation measurements for airline
industry and cargo traffic, such as available seat miles (ASMs) and revenue passenger miles (RPMs),
have consistently improved despite rising fuel concerns. These improvements are primarily fueled by
the increase in demand for air travel.
Majority of Financing Completed Through Operating Leases
Most of the financing in todays aircraft market is completed through either operating or
financing leases. Frost & Sullivan estimates that majority of the leases provided by independent
leasing companies are operating in nature. At the end of 2004, for example, ILFC maintained 667
aircraft on operating leases and only 9 on financial leases. However, the leasing subsidiaries of
OEM companies, such as BAE Systems and Cesna Finance, have more exposure to financial leases.
View Cart
