Aircraft financing – the next big hurdle: Chris Tarry
09 November 2006) Speaking at Outlook 2007, aviation finance analyst Chris Tarry outlined one of the bigger obstacles soon to confront airline managers: the availability of aircraft finance. The airline industry’s low returns on equity will push capital to more profitable arenas. “A rendez-vous with reality”, is imminent, he warned, adding that, “future financing will be an issue.”
A longstanding leading City airline analyst and current principal of transport strategy consultancy CTAIRA, Mr Tarry advised that the current airline sector cycle shows signs of peaking in 2007/2008, with a consequence that affordable capital will become scarce for airlines whose fundamentals are not solid. With the industry as a whole likely to post operating returns of just 3% at the peak of the current cycle, “investors will find places to put their money offering better returns with less risk,” he said.
Outlook 2007 is the Centre for Asia Pacific Aviation’s annual examination of the prospects for the Asia Pacific airline industry. Convening in Singapore with the participation of 30 CEOs and 380 vital stakeholders from all components of the aviation sector, Outlook 2007 and the CAPA Aviation Awards for Excellence is the year’s premier gathering of the region’s aviation decision makers, providing a forum for dialogue between leaders from the airline, airport, supplier and regulatory communities.
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