KfW IPEX-Bank sees more operating leases and sale-and-lease-backs. More airport sales in Asia/LatAm
KfW IPEX-Bank GmbH's Michael Nosbuesch, Head of Aviation Financing and Thomas Brehler, Head of Port, Airport, Construction Industry/PPP Financing speak exclusively to CAPA on financing trends for the global airline and airport sectors. Mr Nosbuesch suggests that operating leases and sale and lease-backs might increase if ECA funding recedes and and carriers look for greater flexibility. On airport privatisation investments, Mr Brehler sees Asia and Latin America as the "ignition" points with the key opportunities in India, China and Brazil.
CAPA: Do you see rising airport privatisation in the wake of the GFC as governments seek to restore health to public sector finances?
Airport privatisation has been en vogue in almost all countries of the western world (other than the US) for more than the last decade. There might be pressure to do more on this route for some governments these days, but the global financial crisis also made investors and financiers act more cautiously, which is a certain countermovement.
The situation is somewhat different for the emerging economies of Asia and Latin America. The strong growth of these countries largely resisted the economic crisis and made investments in airport infrastructure more attractive than ever. These regions of the world will be the ignition plugs for strong and world-wide airport privatisation activities in the coming years.
See related report: New report identifies almost 300 airport investor firms globally
CAPA: Has KfW IPEX-Bank been active lately in airport project finance, and where are the major opportunities over the medium term?
KfW IPEX-Bank focuses on airport financings with a specialised department since 1998. Recently, we financed e.g. the new capital airport in Germany, Berlin Brandenburg International and the Gatwick Airport acquisition. Over the medium term we see major opportunities in India, China and Latin America (Brazil) and a second privatisation wave in Europe.
Head of Aviation Financing, Michael Nosbuesch, now takes up the discussion on airline financing.
CAPA: KfW IPEX-Bank GmbH is one of the large financiers in the aviation sector worldwide. How did you perform in 2009?
Although 2009 was a very challenging year for both the airline industry and the banking sector, KfW IPEX-Bank GmbH was able to provide financings in the amount of around USD700 million. The loans were almost exclusively granted on a commercial basis. For 2010 we plan to further extend our commitment to the sector.
CAPA: Are you seeing an improvement in conditions in the sector in 2010?
We are of the opinion that the parties in the aviation sector are still faced with a challenging environment. However, conditions in general have improved significantly and certain regions (e.g. Asia, Middle East, Latin America) are benefiting from the upswing much faster than others.
Click here for the full report, which contains discussion on the following questions:
- What are the key airline financing trends of 2010 and over the medium term?
- What is your view on airline consolidation? Will we see more of it, and what are the implications for KfW IPEX-Bank and the finance community more broadly?
- Have airlines over-ordered aircraft in 2010/2011 and do you see more airlines and lessors like DAE looking to restructure their order books?
- Which regions is KfW IPEX-Bank targeting for future growth? Do you see the Middle East region overheating?