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Capital gains
01 May 2008
Will Roberts analyses how lessors in the Middle East are affected by liquidity issues in the West.
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liquidity
middle east
uae
salem
In the financial markets adversity often brings opportunity. Flying in the face of adversity are Middle East aircraft lessors. Being largely immune from the credit virus in the US and Europe, these lessors are finding it much easier to find funding than their infected western counterparts.
"The Middle East region, and the UAE, in particular, has a better immune system than the rest in terms of liquidity," says Salem Al Nuaimi, chief executive officer of Waha Leasing, formerly Oasis Leasing.
Whereas a closed bond and equity market and the rising cost of bank debt has hit western lessors hard, their Middle Eastern counterparts enjoy sovereign wealth fund support and access to cheap funding from local banks.
As US airlines report huge losses in the first quarter and look to reduce capacity and consolidate, the low-cost carriers and regional models are taking off in the Middle East.
Lessors will undoubtedly find...
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