Gregory Polek has spent his entire career in aviation journalism with AIN, starting as a proofreader and assistant to then-managing editor Mary Mahoney in 1995 after serving an internship with&nbsp;New Jersey Monthly&nbsp;magazine and completing his B.A. degree in English/Writing at New Jersey’s William Paterson College. By 1997 Polek accepted a position as an associate editor, covering the regional airline beat for&nbsp;Aviation International News&nbsp;in place of retiring industry veteran Don Anderson. The assignment took Polek across North America and Europe to profile regional airlines varying in size and mission from the likes of floatplane operators Kenmore Air and Chalk’s Ocean Airways to regional jet operators such as SkyWest and American Eagle. Today, in his dual role as Air Transport Editor and International Airshow Editor, Polek writes, edits, and manages AIN’s commercial aviation content while overseeing each of the company’s daily international air show publications in Paris, Farnborough, Singapore, and Dubai. Most recently Polek has assumed oversight of daily coverage of the Helicopter Association International’s annual Heli-Expo convention.

Senior Editor

Gregory Polek

While the well-documented effect of the Covid-19 virus on airlines appears unmistakable, the leasing companies that finance a significant proportion of the airplanes that now sit on the ground will no doubt feel pain as well. Some of the world’s most prominent lessors find themselves exposed to regions hardest hit by the virus, at first most notably in China and now in Europe and around the world, as airlines ask for rent deferrals through either reduced payments or a halt in payments until the crisis subsides.

 


As a result, aircraft lessors must decide whether or not they will accept lower-than-contracted lease payments or allow lessees to default, in which case they would have to repossess, reconfigure, and remarket the aircraft in an environment where lease rates would likely move lower. A new report by New York-based Kroll Rating Agency on the effects of the coronavirus on global aviation places repossession, reconfiguration, and remarketing (RRR) cost at about $1.5 million for widebody aircraft and $750,000 for narrowbodies. Lessors, it said, must decide whether a temporary decline in lease payment revenue outweighs the potential RRR cost. &nbsp;

 


According to Kroll, most lessors have decided to remain “in a holding pattern” and have shown more interest in helping their lessees with better credit and/or parent company support. No matter how severe the effect of the virus proves in the near term, many lessors still hope that a rebound will happen as quickly as after other epidemics over the past 20 years.

 


Although Kroll head of aviation, transportation, and commercial finance Marjan Riggi expressed less concern about&nbsp;Covid-19’s influence on lessors than about its effect on airlines, she acknowledged that lessors will at least see a near-term revenue hit, while those exposed to airlines with comparatively weak credit ratings and no government support likely will need to absorb more outright defaults.

 


Fortunately for some lessors, their exposure to China largely involves the three big state-owned carriers, whose main benefactor—the Chinese government—harbors no desire to watch its vital transportation infrastructure collapse. Furthermore, those lessors must consider the health of their relationships with those airlines and their sponsors.

 


“There could be reasons that are a little bit more complicated than just, okay, well look, they don't have money to pay,” explained Riggi. “It might be that down the road it helps them with other negotiations. It's a negotiating tactic. But yet at the same time, they've also told us that let's say a very small, financially weak airline is asking for the same thing. They may very well say no and start repossession procedures.”

 


Although she said she couldn’t talk about which lessors the company rates, they could face downgrades as a result of the virus situation. “This is why we put this report out, [because] we're looking at the situation very closely and want the market to be aware of our process,” Riggi noted.

News and developments about airplanes, helicopters and unmanned air vehicles used in all varieties of operations, including airlines, military, business, commercial, general aviation and private.

Inconspicuously, Aircraft Lessors Hit Hard by Virus Scare

Although most lessors remain in a “holding pattern,” the worsening Covid-19 crisis will force repossession of devalued assets. 

2024 Corporate Aviation Leadership Summit

Kerry Lynch

News and issues relating to business, corporate and private aviation, primarily regarding turbine-engine-powered airplanes and helicopters. Subjects include aircraft, engines, maintenance, operations, personnel, acquisitions, accidents, safety, security, and training.

Deal to close this year

Bombardier To Grow Manufacturing Capacity with MHICA Buy

David Donald

Essential news and analysis on the defense aerospace business. Your trusted source for new and ongoing programs and requirements in military aircraft (manned and unmanned), engines, avionics, weapons and associated systems, including ground-based air defense.

The two NATO allies will purchase seven of the tanker/transport aircraft

Spain and Poland Agree to Buy A330MRTT Tanker Transports

News and developments about aircraft engines, including turbofan, turboprop, turboshaft and piston.

News and issues relating to the aerospace industry that are related to the science, engineering and business of flight in space involving civil, industrial and military applications, and similar topics related to flight in the atmosphere of the Earth that are not covered more directly by other AINonline subject channels. In other words, both astronautical and aeronautical subjects, except for those aeronautical topics that are specifically covered elsewhere on this website.

News and issues relating to international air transport and cargo carriers, national airlines and regional airlines, including aircraft, engines, personnel, acquisitions, accidents, safety, security and training.

GE Aerospace has tested the GE9X, Leap 1A, Leap 1B, and more with the 747.

GE Aerospace Flies Boeing 747 To Test New Engine Tech

Charles Alcock

News about commercial airlines, including regulations, aircraft orders, safety, acquisitions, and mergers.

News about environmental issues relating to aircraft operations, including noise issues, emissisions, and regulations. See Fuel for biofuel.

City officials and a local university are working with manufacturer Electra 

Helsinki Evaluates Hybrid-electric Flight Connections

Platform offers 100 kilogram payload and 300 nm range 

Zuri Prepares to Fly Hybrid-electric Cargo Drone 

Broker says new aircraft production rates and tax changes are key drivers

Jetcraft Bullish on Preowned Business Aircraft Market

Amy Wilder

Aircraft flew Jacksonville to San Diego nonstop

SyberJet SJ30-2 Sets Unofficial Transcontinental Record

Hanneke Weitering

New developments at airports including regulations and noise issues; legal disputes; openings, acquisitions and mergers.

News and issues regarding all manner of civil and military rotorcraft and their powerplants, including helicopters, tilt rotors and unmanned air vehicles.

More In Aircraft