The voting audience in Airfinance Journal’s webinar ‘cash burn and liquidity’ expects a good proportion of the top 50 lessors to underwrite new business this year and in 2021.
According to Airfinance Journal’s Fleet Tracker the top 50 lessors lease a total of 8,300 aircraft valued at $300 billion to more than 500 airlines.
The question asked on the webinar was: “How many of these lessors will be actively investing in the sector in 2020 and 2021?”
Almost a third of the audience said between 20 and 30 lessors will do new transactions over the next 18 months, while another 22% anticipated business from between 30 and 40 lessors. 14% of the voting audience also expects between 40 and 50 lessors to be active.
Another 22% of the votes only anticipated 10 to 20 lessors doing business in 2020 and 2021, while another 10% was pessimistic, expecting less than 10 leasing companies being active with new deals.
Another question centred on the airlines operating 50 or more Airbus and Boeing aircraft.
About half of the audience anticipates 50 to 75 airlines out of the 115 sample will still exist one year from now. Another 40% expect 75 airlines or more to exist this time next year, with 25% anticipating 75 to 100 airlines.
About 10% of the votes said less than 50 airlines, out of the 115 sample, will be around this time next year.
The final question focused on access to secured debt.
Assuming for 2021, $50 billion of aircraft capital expenditure, zero operating cash burn, refinancing requirement of $120 billion, industry leverage of 6.0x and fixed charge cover of 1.0x, about two thirds of the audience expected airlines with BB- rating and above would have access to debt, on a secured basis.
Interestingly 20% indicated only investment grade carriers (BBB- and above) would have access to secured debt.
Another 18% anticipated airlines in the B- rating category and above to have access, followed by CCC- and above (8%) and 11% indicated they would only lend with a government guarantee.
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