Airline Economics Growth Frontiers 2026 ABS Panel

John McInerney

Managing Director – PAFS Ireland

Discussion Highlights

Resilient Investor Appetite

Question:
“In the world of geopolitical tensions, we find ourselves in shifting trade policies almost on a daily basis, general all around volatility and unpredictability. Do you see these dynamics in your business weighing on any investor or issuer decisions to come to market? Or is it the case that perhaps these are more localized, geographical issues that you know we don’t really need to concern too much with?”

John McInerney:
“Yeah, it’s a good question. I guess, you know, when we think about institutional investors, what do they want? They want certainty of return. Some, I suppose, more on the analyst side, they’ll probably look and say it’s more of an opportunity – guys that have a higher risk tolerance – and say it’s more of an opportunity than an exit strategy. So it depends on where your risk appetite is.

I think we’ve seen over time in aviation, that it’s very cyclical. We’ve gone through lots of black swan events, ranging from the 911 to the credit crisis to Covid to Russia and Ukraine. So, I think overall, you’ve had all of these events, but the market has been resilient.

And as we speak about the potential issuances coming into the year, you can see the investor appetite is there. You look at the different events that are happening throughout the world, geopolitical stuff. You know the trends, the tariffs, the trade wars, you know the price of gold, inflation continuing to move, price of oil. These are all uncertainties that can either be at local level or on a wider scale. But I think from the investor stack, I think the appetite is there to continue to do transactions.”

ABS Portfolio Strength

Question:
“John, in the portfolios that you see being managed, you know, are you noticing an impact on the ABS portfolios with this uprise in valuations and lease rates, the general positive sentiment in the market?”

John McInerney:
“I think positively is there? I guess you’ve seen an increase in values, an increase in lease rates. You know, my view is that every asset out there is effectively for sale at the moment, because people are willing to spend money on it, and I think some of the older deals that are out there, and that might have gone through challenging times between Covid, Russia and Ukraine, obviously they got Russian proceeds in from insurance claims, which obviously helpful transactions as well.

But also the uptick, I suppose, in values, as you look to move out of portfolios and sell them off, has been quite beneficial. And also, there’s been some trading on E notes as well. So, there’s obviously value within the portfolios, and people can see that. So, again, it goes back to your investor appetite on where you want to buy and where you want to sell.”

Confidence in Servicers

Question:
“Do you see the tightening supply of aircraft as beneficial to ABS pools in that there’s more flexibility as to what can go into them, given the lack of supply in the market, or does it impact it?”

John McInerney:
“Yeah, I think, look, ultimately, your pool, you have to make it, I guess, as efficient as you can, to bring it to market, right? Because there’s lots of issuance out there, potentially and ultimately, from an investor’s perspective, it’s going to be the maths, it’s going to be the quality servicer that’s sitting behind it and the partners that partner up with it. Because, you know, if you’re sitting at your investor desk you have lots of different options, and it’s a case of going with the one that you know you’re going to get, your certainty of return, and that’s where your quality servicer comes into space.

And also, I guess, the proof of concept – repeat issuers that have done deals time after time, and we spoke about earlier on, in relation to people being able to get down to the E-note given the market. So I think that’s really important.”

Optimism Upgrade

Question:

What is the outlook for aviation ABS in 2026?

John McInerney:
“Yeah, I concur with fellow panelists in the sentiment that’s there. When we spoke in Singapore, I think the term was “cautiously optimistic”. Now, I think we’re going to go for “bullishly optimistic.”