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Aviation finance is proving its resilience amid a cooling global economy. Our survey finds that senior executives in the sector are optimistic that global levels of aircraft financing will increase in 2020


Despite the volatility that has affected the overall economy, the aviation industry has weathered the storms. Indeed, sector financing is set to grow, though there could be regional differences according to Justin BensonAdrian BeasleySimon CollinsChristian HansenMichael Smith and Richard Smith, partners of global law firm White & Case

Despite many of the global economy's warning signals flashing red, the prospects for the aviation finance sector appear undimmed. The aviation industry as a whole has demonstrated remarkable levels of resilience amid the uncertainty and volatility of recent years, with continued passenger growth offsetting a moderate decline in air cargo traffic during 2019. Financing has grown in lockstep with the industry and is expected to continue to do so. For example, Boeing predicts the value of global aviation finance will rise to US$181 billion by 2023, up from US$126 billion in 2018.

Our new survey of the aviation finance market suggests these types of forecasts may be realistic. The airlines and capital providers whose views it summarizes expect investment in aviation to continue growing, with a corresponding increase in financing activity. Although challenges certainly may lie ahead, including the deteriorating outlook for the global economy, optimism still prevails in this market. In particular, the increasing diversity of funding sources may provide some protection against setbacks in any one area.

That said, this report also identifies significant differences in sentiment by geography. In broad terms, respondents based in the Asia-Pacific (APAC) region are considerably more likely to have positive views of the outlook for 2020, while those based in North America and—in particular—Europe, the Middle East and Africa (EMEA) are less upbeat.

Clearly, while this is a global industry, with capital flowing freely across borders, there is no escaping the regional economic context. As European and North American economies seemingly move toward a period of slower growth—or outright recession if the most pessimistic predictions are confirmed—Asian markets may offer some respite, despite also being expected to slow.

This report focuses on both the global picture and these geographical nuances. We consider the outlook for investments in the aviation sector, and we survey the funding landscape that will support these investments. Our report also focuses on liquidity, airline consolidation and mergers and acquisitions (M&A) activity, while highlighting opportunities and risks facing this industry in 2020 and beyond.


In the fourth quarter of 2019, White & Case, in partnership with Mergermarket, surveyed 100 senior-level executives at entities that have either financed or invested in the aviation industry in the past three years. The aim of the survey was to analyze sentiment regarding aviation finance. Organizations surveyed included airlines, operating lessors, banks, export credit agencies, private equity and other alternative capital providers. Job titles included CEO, CFO, director level and heads of investment.


“The aviation industry as a whole has demonstrated remarkable levels of resilience amid the uncertainty and volatility of recent years”

Overall investment outlook for global aviation finance

Our exclusive survey of senior executives who have financed the aviation industry in the past three years reveals that the overall investment outlook for the sector is bright, with one region in particular set for larger growth than its global equivalents

airplane engine

Funding sources

The multiplicity of financing sources such as asset-backed security, insurance and leasing companies has been crucial for the sector. In this section, we reveal the origins and sources of expected funding in 2020

airport runway

Liquidity and refinancing

Despite the sector's current strong performance, many survey respondents believe the industry needs even more capital and liquidity. In addition, most expect restructurings and insolvencies to increase in 2020

airplane windows

Winds of change

Economic volatility, political unrest and fierce competition are all seen as major challenges to the sector in the coming 12 to 18 months. Meanwhile, respondents are preparing for rising oil prices and growing industry consolidation

airplane landing


We explore key takeaways from our exclusive survey and what they could mean for the aviation industry and aviation finance

flying airplane
flying airplane

Key takeaways from our exclusive survey

We explore key takeaways from our exclusive survey and what they could mean for the aviation industry and aviation finance

2 min read

Respondents to this research offer a broadly optimistic view of the short-term outlook for the aviation industry and aviation finance. Despite obvious economic headwinds and undoubted geopolitical volatility, the industry has continued to grow, and this has underpinned positive sentiment.

However, the picture varies around the world. APAC-based respondents are markedly more confident about what lies ahead than their counterparts in the EMEA region, where economic malaise and Brexit pose difficult challenges. North America, too, is less upbeat than APAC, with the future direction of the economy unclear, particularly in a US presidential election year.

In 2020, airlines, operating lessors and the industry's funding partners will need to make some finely balanced judgments as they reflect on their priorities:

  • APAC's prospects look brightest, but the region's low-cost carriers are operating on thin margins, and infrastructure remains a concern.
  • North America is vulnerable to the effects of a slowing economy but has so far been able to escape its worst effects.
  • European airlines face tough competition, while the number of industry participants may prove excessive in Asia and capacity may prove excessive in the Middle East. However, consolidation and restructuring may present new opportunities.
  • The funding markets remain open, with a broad range of investors attracted to aviation's cash flow and diversification attributes, and new sources of finance having come onstream. Still, a decline in US funding would present difficulties, and funding sources are more precarious in some markets.
  • Liquidity remains high, and providers in some markets feel an oversupply is detrimental to returns. However, not all those seeking to access liquidity are operating on a level playing field, and some report shortfalls.
  • Low interest rates continue to offer opportunities to refinance or take on additional debt. For some, it may be worth closing down existing credit facilities before they reach maturity.
  • Amid the confidence, insolvencies and restructurings continue to mount up, underlining the need for balance sheet strength and positive cash flows.
  • The slowing global economy should give pause for thought. At the same time, planning ahead in this age of elevated uncertainty is difficult. For example, many airlines are working on the basis that oil prices may rise, despite predictions of a small decline.
  • Infrastructure now represents a barrier to aviation expansion, even in markets where new airports are still being built. Growth strategies will need to reflect this reality.

Given these nuances, while the industry is justified in approaching 2020 with optimism, this positive mood will need to be tempered with caution. Those that hedge in case of disruption are unlikely to find the effort has gone to waste.



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© 2020 White & Case LLP


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