ACG's CEO Steve Hannahs authored a two page article on Preparing for a Post-Recovery Aviation Industry which appeared in Jetrader magazine's March-April 2010 issue.
"We think the market is ready for this structure," says ACG CEO Stephen Hannahs, speaking exclusively to CAO.
"It will help improve liquidity in the market for aviation and open up a new investor class."
The structure of this note issuance has traditionally not been done for various reasons.
"The success of the FDIC
[Federal Deposit Insurance Corporation] guaranteed note programme has demonstrated the market's appetite for this type of instrument, " Hannahs
is hopeful that in time with an educated market this financing will trade at levels similar to Federal Deposit Insurance Corporation paper, or in the Libor plus 40-75 basis points range.
Speaking on a conference call with Wachovia yesterday, ACG CEO Stephen Hannahs and VP-Finance Madhu Vijayaraghavan said the optimistic outlook is due to: demand for fuel-efficient aircraft, the absence of a narrowbody replacement and the continuing trend away from airline ownership of aircraft.
According to Steve Hannahs, CEO and group managing director of California-based less or Aviation Capital Group (ACG), this development in particular differentiates the present cycle from preceding ones and is a cornerstone of the strong demand that lessors are experiencing in the face of the industry downturn.
"This cycle is different," says Hannahs
This is a relationship-driven industry and you want to be able to access capital in the down-times," continues Hannahs
También presenció la entrega de la aeronave Stephen Hannahs
, director general de Aviation Capital Group, que financia el plan de modernización de la flotilla de Avianca.
, primera aerolínea fundada en América, en 1919, forma parte desde 2005 del grupo brasileño Sinergy, de Brasil, junto con las aerolíneas OceanAir, de Brasil, y Vip S.A., de Ecuador.
Finalmente, R. Stephen Hannahs
, Director Administrativo del Grupo de Financiación y Director General de Aviation Capital Group, declaró: "Nos enorgullece formar parte de la planificación estratégica de Avianca para el futuro y esperamos con beneplácito la oportunidad de ampliar nuestra asociación con la Aerolínea líder de Colombia y una de las primeras de la región".
"We have eight or nine different funding avenues and a strong parent company so we are able to access the capital markets anytime we want," says R Stephen Hannahs, MD and CEO of Aviation Capital Group in an interview with CAO.
"We have extensive capital resources for our expansion."
ACG's parent company, Pacific LifeCorp, has no subprime exposure, which puts the lessor in a strong position to access financing.
warns that "raising new equity capital is going to be very challenging" for some lessors.
Not capital that will come in and get out quickly," says Hannahs
Unlike the short but deep downturn that characterized 9/11, Hannahs
anticipates this "downturn will be shallower, but longer."
Also, unlike 9/11, this time around, there is financial pressure in the bank market and the capital markets, which is causing concern about the future sources of liquidity in the wake of increased aircraft deliveries.
"Every decade, we have this same question about where the money is going to come from, and every decade something comes up," Hannahs
"Today, I don't know where the money will come from [for airlines and some lessors].
No one could figure it out in the early 1990s, but then we got EETCs, and later we got securitizations.
I suspect folks who get paid to think of these things will come up with something this time around, too."
believes there is a "prospect of consolidation" among lessors during this downturn.
"Our first Airbus orders were due to be in 2013, but at the last minute, Airbus said it had five positions open up and they offered three to us," says Stephen Hannahs, CEO of Aviation Capital Group in an interview with CAO at Farnborough.
doesn't anticipate a narrowbody replacement in the near future.
will come to market with an enhanced A320 that will see "the addition of winglets and maybe some clean-up on the aerodynamics."
"I suspect what you will see from Airbus
is a warmed over A320 in 2012 or 2013.
We will see an interim aircraft that will offer some of the operating costs savings, but without the drama of a new aircraft and the dollars that go with it."
is also looking to build up the widebody positions, saying he
would like to "add more 787s", but is also "studying the Airbus A350."
"I believe the A350 will be a good aircraft so we are studying the A350-900."
"I have cautioned Boeing
that the A350 will go right into the teeth of the 777-200ER, so Boeing
will need to look at what kind of competitor's response it will give to the A350."
dismisses any jumbo aircraft orders.
AGC CEO Stephen Hannahs told Dow Jones that U.S. airlines specifically are in "desperate need" of new planes to replace older, less fuel-efficient aircraft.
Leasing is a good option, he
continued, for airlines that can't get loans to buy new ones.