Now that the dust has settled on the Dublin Conference Week , we at Phoenix American have had time to reflect on our key takeaways. It was a busy and productive week that was no doubt a great boost to the local economy.
The current OEM delivery delays and engine issues dominated a number of panel discussions as it impacts all facets of the aviation industry. It was noted on one panel that virtually every aircraft that can fly, is flying at the moment. Anything that isn’t flying is being impacted by the shortage of slots for shop visits. The OEM delivery delays look to push towards the back end of this decade due to the lost 3-4 year period over COVID. The engine issues on new technology aircraft are driving airlines to extend leases on older aircraft. This was referred to an ‘extension boom’ during the conference with lease rates increasing on most aircraft.
This directly impacts the Aviation ABS market, in which Phoenix American is the leading Managing Agent, as the existing Aviation ABS deals tend to have aircraft of this vintage. This is giving additional, in some cases not forecasted, revenue and helping increase the residual value of those aircraft. This was one of many topics discussed on the ABS Panel which was expertly moderated by Phoenix American’s John McInerney. The panelists had a robust discussion on the Aviation ABS market and the outlook for 2024 and beyond. The panel came to a consensus of ‘cautious optimism’ for new issuance in the Aviation ABS market.
John McInerney Moderating the ABS Panel at Growth Frontiers Dublin
The Aviation ABS market will be aided by the pick-up in trading of aircraft as lessors look to recycle and refinance portfolios when conditions are conducive. Panel discussions agreed that there are more portfolios out in the market for sale and expect an increase in trading activity during the year.
Another hot topic for discussion was ESG and its impact on the aviation industry. It is such an important topic within the industry that there was an entire day of the conference dedicated to `Sustainable Aviation Fuel (“SAF”) and Carbon Finance. An outcome of the discussions was that production of SAF will have to increase dramatically over the coming decade to help meet ESG targets set by the industry for 2050.
All in all, it was a great week to connect with industry friends, colleagues and clients. With 5000+ people in Dublin, it was a week not to be missed and has set the tone as optimistic for 2024 in the aviation industry.
Next you will find Phoenix American attending ISTAT Americas in Austin. Please feel free to reach out should you wish to connect.
