The 2019 Current Aircraft Finance Market Outlook forecasts another year of stable growth and funding diversification. The aviation industry has shown an exceptional level of resiliency in a dynamic environment, demonstrating the underlying strength and value of air travel. For the ninth straight year, passenger traffic recorded above-trend growth with historically high load factors and aircraft utilization rates.
This consistent passenger growth, along with the continued health of the air cargo market, is allowing the industry to grow efficiently despite oil price headwinds and the rising U.S. interest rate environment.
Airlines and lessors are expected to have some of their lowest historical costs of financing, so long as interest rate hikes are gradual and the industry continues to successfully navigate past external challenges.
Last year saw the expansion of global participation in aircraft financing, increased capacity for pre-delivery payment and mezzanine debt financing, and the continued maturity of the global aircraft financing legal framework; these trends are expected to continue in 2019. Lessors will continue to play a vital role in supporting new airplane deliveries, while sourcing a greater share of their portfolios from direct order books.
All-in-all, 2019 is expected to be another year of strong and efficient liquidity from diverse markets.