Money People See A Robust Traffic Numbers, Fleet Upgrade Possibilities

The people and companies who put up money for the purchase or lease of airliners seem to be at least cautiously optimistic about a return on investment in new, quieter, fuel efficient aircraft.

The buzz at the meeting of the International Society of Transport Aircraft Trading, being held this week in Barcelona, Spain, is that airlines are poised to rebuild their fleets with newer, more efficient airplanes in an effort to increase their bottom lines. They cite as examples recent announcements from American, Delta, and Air France-KLM for the purchase of hundreds of new airliners from Boeing and Airbus. The Wall Street Journal reports that John Plueger, president of Air Lease corporation, said that "demand for new aircraft over the next several years is exceeding supply."

Domhnal Slattery, CEO of the Irish leasing company Avolon Aerospace Leasing, said interest rates at "extraordinarily low" levels will also have a positive effect on the industry, and should offset the increased cost of government guarantees.

An executive of Germany's DVB Bank SE said that there will likely be a squeeze on re-financing older airplanes, as many of the best deals are for purchase of new equipment. That means older planes may be retired sooner than they might have otherwise, and their value may be written down by airlines and leasing companies sooner than they had anticipated.

FMI: www.istat.org