Air Finance Journal Copying and distributing are prohibited without permission of the publisher


01 October 2005

Several aircraft finance banks are beginning to invest in airports, but there is much debate about how compatible the two assets are. By Alexandra Cain.

Read more: airline Airlines RBC Calyon Bank of China Citigroup airport financing aircraft finance

"I know people will be traveling by air over the next few years, I just don't know in which aircraft or with which carriers," says one asset finance banker. "So that's why I prefer to back airports over aircraft."

He has a point. Global air travel will double by 2020, according to Airports Council International. But airline bankruptcies over the past few years have shown that airlines are far from stable. Some bankers believe that financing airports is a safer bet and the best way to enter the aviation market.

Several banks involved in aircraft finance are beginning to invest in airports but bankers already in the airport market are wary and believe that airports and aircraft cannot be treated as similar assets. Newcomers believe that they know airlines and the aviation industry and this is the crucial element to success.

New banks and new markets Royal Bank of Canada is...

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