The impact of Covid-19 on aviation
31 July 2020
As travel restrictions ease after the Covid-19 lockdown, Investec’s Aviation Finance Report examines the outlook for the industry.
7 min read
Investec has 15 years+ in aircraft leasing, owning and managing over 200 aircraft (with a value of USD 9 billion)
Skilful and recognised aircraft manager: since 2014 Investec has originated USD 6.8 billion of aircraft assets and sold / remarketed over 50 aircraft
Strong credit and debt arranging skills: raised and distributed more than USD 10 billion of aircraft debt in the past 10 years
Team of 25+ experienced professionals including origination, technical, remarketing, credit risk management, investors relations, reporting, funds administration and treasury
Investec has established 3 aviation debt funds on behalf of third party investors
Investec established, grew and exited 3 aircraft equity leasing platforms on behalf of third party investors in the last 10 years and an excess of USD 4.5 billion of third party assets under management
“We see tremendous opportunity from the market dislocation created by the COVID-19 pandemic, which has caused a long-awaited adjustment in the aviation market, bringing asset values and risks associated with aircraft ownership back into a more balanced relationship.”
Paul Da Vall – Head of Investec Aviation Equity Funds
“COVID-19 has brought an abrupt dislocation to a competitive aviation finance market. Despite softer aircraft asset values, the overall security package that characterises aircraft-backed senior debt has proved to be robust even in these testing market conditions. Correctly structured, aircraft loans give lenders significantly more control in a default situation than ABS or EETC instruments.
The industry faces a multi-speed recovery that favours domestic travel and younger narrow body aircraft. Shifts in the size and shape of the aviation industry will present opportunities for investors to make sound returns through conservatively structured aircraft backed debt to strong airline and lessor counterparts. “
Derek Wong – Investec Aviation Debt Funds