Barely two years ago prospective business aircraft buyers in Europe were among the most sought-after clients for a banking industry attracted both to the high rates of growth in this market sector and to the exceptional strength of asset values, driven largely by soaring demand and long delivery backlogs. But then as the credit crunch crossed the Atlantic in 2008, the jet set found itself seemingly no more able to raise loans than the lowest of the low in America’s bankrupt home mortgage market.
For much of last year, the lack of available credit was identified as one of the biggest impediments to a recovery in demand for business aircraft, along with the perilous collapse in aircraft values. Overwhelmed by wider financial worries, many lenders simply deserted the market, but others such as Barclays (Booth No. 1452) and Banc of America Leasing (Booth No. 1452) did not and are playing their part in the recovery process.
“I believe, in terms of a new business aviation cycle, we are still waiting for the dust to settle, but are probably at or near the bottom of the cycle,” said Paul Fowkes, head of corporate aircraft finance at Barclays Capital. “However, we need to analyze the next two quarters to be sure by carefully looking at certain parameters and indicators such as GDP, corporate profitability, charter hours flown, etc. One positive is that charter hours within Europe are now beginning to recover.”
More In Finance, Taxes, Insurance
