Growing Confidence Within the Airline Leasing Industry

As the industry of Biotechnology enters new areas of business, it is expected that growing confidence within the industry will be important for all Biotechnological plants, Outsourcing Contract manufacturers and Service Providers. As a group, Biotechnological Plants, have not been immune to recent events. Many companies lost money when investments were lost or when customers were unable to receive their goods because of recalls. Investors in Biotechnological plants are looking at risk management in an overall sense with regard to plant investments. The bottom line in the Airlines, Lodging Industry and Hotels industries have been hit hard because of the economy, travel delays and rising fuel costs. Many airlines have cut flights and hotel room prices and while profitability is not guaranteed, some have gone into negative profit figures.

There are some signs of growing confidence within the air transport industry. The September 11th terrorist attacks on New York and Washington caused immediate disruptions to several air carrier flights. The number of cancellations and delays as well as refunds increased dramatically as people began to react to the events of that day. The impact of these incidents can still be seen four and five months later as tourism is hurting tremendously in the United States. There are still more issues to deal with within the airline industry and I doubt that we’ll see any positive results from this situation until mid-year at least.

Many US based companies have been hit by the weak economic conditions in the United States. The economy is still young and growing, but many of the companies in the Oil and Gas, Natural Gas and Electricity sectors are being impacted. A few years ago, when these types of industries wanted to place a long term project on the lease they would put together a very attractive proposal package. Now they cannot do that because of the lack of projects and there has been too much competition among the airlines, hotels, cargo airlines and freight forwarders. This has led to many project delays and cancellation announcements.

An interesting phenomenon is taking place. Several large US based companies are exiting the leasing business. These include Continental Airlines, American Airlines, Continental Airlines, US Airways, Delta Airlines, PHL Airlines, Northwest Airlines, Air Canada, and Houston Area Airlines. One of the reasons for the departure of these companies is the fact that they were spending too much money on advertising. They have lost too much business due to a decreasing economy and rising fuel and airline rates.

With more companies exiting the business there will be less competition amongst the aircraft leasing companies. Babcock International Limited, a British-based aircraft leasing and finance company is in talks with three potential customers to supply them with aircraft and technical support. If these deals go through it will be good news for lessors as more companies will be offering lease coverage at lower prices. In the current economic climate many businesses are trying to cut costs wherever they can. However, leasing providers are always going to be tempted to go for the lowest price, as that makes it easier for them to turn a profit.

Some of the current US based aircraft leasing companies have received financing from a Chinese based lender. This raises the hopes of investors that the sector will continue to expand. In addition, there are some US based companies that are looking to expand their business in Africa, Latin America, Russia and Asia. There is a fear within the aircraft leasing business that this could happen as soon as the US economy begins to recover from its recent recession. There is also the possibility that Awas, a French company could move into the US lessor market, providing a much needed boost to the industry.

With growth in this sector expect aircraft types to continue to grow as demand picks up. Demand is already high in the domestic sector but more demand is expected as more people buy homes and settle down. This means that as more people buy homes having the right aircraft types at the right price in the order book them quickly when they decide to sell. The growing confidence within the industry is likely to result in more lease rates being offered to more people and companies, which will provide more long term stability for the industry as a whole.

The industry is looking to grow its base of clients and partner suppliers as the global economy continues to recover, providing growth and orders for clients from all over the world. If you own an aircraft type, you are likely to benefit from the boom in this sector. If you don’t own an aircraft type, you may still want to explore the opportunities provided by leasing in order to build your own portfolio of assets and create a diversified portfolio by owning and operating multiple types of leased aircraft. The future looks bright for anyone with an interest in growing their businesses on a global scale.

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