Lessor run at Farnborough shows growing prominence of sector

Aircraft lessors were prominent during the 2012 Farnborough International Airshow, accounting for approximately 46% of the commitments and pledges disclosed from 09-Jul-2012 to 12-Jul-2012 covering 627 aircraft. Removing the 150 aircraft order announced by United Airlines in Chicago on 12-Jul-2012, lessors represented nearly 61% of the business agreements tabled at the show. The results reflect salient growth of the aircraft leasing business during the last decade as airlines saw their ability to secure credit dwindle and banks preferred to forge financing deals with lessors with increasing portfolio diversification that lowered their risk profile.

A direct result of the rise of lessors in importance is the share of the world's commercial aircraft fleet financed through operating leases has grown from 25% to 35% since 2000, according to rating agency Fitch. "Aircraft lessors have filled important financing gaps that grew as debt capital markets tightened and airline credit quality weakened," the company recently concluded. Boeing estimates that between 1970 and 2000 the percentage of the global commercial aircraft fleet on operating lease grew from less than 1% to 36%.