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Editorial: The sources of capital are already shifting
12 April 2012
Airlines and lessors are increasingly turning to the capital markets to raise liquidity.
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Editorial
When the rising cost of export credit is realized over the next few years, new sources of capital will be essential as the 2011 Aircraft Sector Understanding is fully implemented.
The traditional bank market will have to cope with the new Basel III capital ratios, which is likely to make long-term lending more costly. Or, perhaps, the industry will move to shorter tenors in order to match the loan profiles with their funding costs. This will require clients to refinance more often, which, again, could lead to more expensive all-in costs across the life of the asset.
But while the specific banks and the volume they lend might change, bank funding will remain critical to this sector. Already the industry is seeing a shift from the traditional aviation banks to new players that are attracted to the space.
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