Jetrader - March/April 2013 - 18

Going bankrupt, combined with mergers and subsequent infrastructure
rationalizations, has enabled the major U.S. airlines to slash their debt
servicing and operating costs.

ISTAT 2013 Events

financing costs, so airlines will need to be
vigilant there,” echoed Mary Ellen S. Jones.
“I think they also face the question of how
much more—or if—they can continue to
raise passenger fees.”
Despite these challenges, the North
American air transport sector is finding
ways to not only be profitable, but grow
profits for the past two years. This said,
when it comes to new aircraft purchases,
this region is a shadow of its former self.
In the past, most aircraft orders came
from North America, with the region
accounting for 50-60 percent of aircraft
purchases in the 1980s “to less than 10
percent in the dark days of 2008-09,”
Jones said. “North American orders have
rebounded since, to about 20 percent, as
U.S. networks launched their re-fleeting
plans, but this share pales in comparison
to the continuing strong growth in the
Asia-Pacific region, led by China and now
Latin America.”

Instead of a wide range of banks willing
to underwrite aircraft purchases, the credit
base has shrunk to a handful of majors
such as Bank of America, HSBC and Wells
Fargo—“and these guys don’t do that kind
of debt,” Whitehouse said.
In this tightened credit market, purchasers of new aircraft have an edge, due to the
fuel-efficiency and lower operating costs of
these airframes. In contrast, seller and buyers of middle-aged used aircraft face some
serious challenges, according to Whitehouse.
To offset these aircraft’s comparably higher
operating costs (due to less efficient fuel
consumption), sellers will have to drop the
asking price of their aircraft to compete with
more expensive, more efficient new aircraft.
Meanwhile, buyers will have to find lenders
willing to take the risk on older aircraft,
when financing deals for new purchases are
available to them.
“There are some warning cries of lack
of available financing and/or increasing

no-shows and rebookings—these tools let
them “change fares on a daily basis to
maximize total revenues.”
While they are enjoying improved profitability, North American airlines are also
facing a massive renewal of their fleets.
Boeing predicts that these carriers will
spend $820 billion on 7,290 new airplanes
during the next 20 years. The push will
be to retire older, less fuel-efficient
single-aisle aircraft. According to Randy
Tinseth, vice president of marketing, Boeing
commercial airplanes, single-aisle aircraft
will increase their share of overall North
American airline fleets to 69 percent in
2031. Overall fleet size will grow from
6,650 today to 8,830 in 2031, once the
retirement of older aircraft are factored in.
This said, finding financing could be
difficult, said Neil Whitehouse, president
of Ariel Aviation. The recession and related
bank crisis has led to a substantial drop
in the number of lenders, he explained.

save the date
ISTAT Americas 2013

ISTAT ASIA 2013

Sunday-Tuesday
10-12 March 2013
JW Marriott Orlando
Grand Lakes
Orlando, Florida

Sunday-Tuesday
12-14 May 2013
ANA Intercontinental
Tokyo, Japan

ISTAT Reception at
the Paris Airshow

ISTAT Chalet at the
Paris Airshow

Monday
17 June 2013

Monday-Sunday
17-23 June 2013

ISTAT Europe 2013
Sunday-Tuesday
6-8 October 2013
Hotel Arts
Barcelona, Spain

Don’t miss these 2013 ISTAT events.
For more information, please visit www.istat.org.

18614913_EditorialAdvt.indd 1
The official publication of the International Society of Transport Aircraft Trading

12/11/12 1:09 PM


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Jetrader - March/April 2013

Table of Contents for the Digital Edition of Jetrader - March/April 2013

A Message from the President
Calendar/News
ISTAT Honors Renowned Airline Executive
State of the Regions: North America
Q&A: Paul A. Jacobson
Investment Thesis: Why Airplanes are Great Assets?
Remarket or Dismantle: That is the Question
What's Going On?
Aircraft Appraisals
Letter of Intent: Crafting Road Maps for Success
ISTAT Members on the Move
Advertiser.com/Advertiser Index
Jetrader - March/April 2013 - Cover1
Jetrader - March/April 2013 - Cover2
Jetrader - March/April 2013 - 3
Jetrader - March/April 2013 - 4
Jetrader - March/April 2013 - A Message from the President
Jetrader - March/April 2013 - 6
Jetrader - March/April 2013 - 7
Jetrader - March/April 2013 - Calendar/News
Jetrader - March/April 2013 - 9
Jetrader - March/April 2013 - ISTAT Honors Renowned Airline Executive
Jetrader - March/April 2013 - 11
Jetrader - March/April 2013 - 12
Jetrader - March/April 2013 - 13
Jetrader - March/April 2013 - 14
Jetrader - March/April 2013 - 15
Jetrader - March/April 2013 - State of the Regions: North America
Jetrader - March/April 2013 - 17
Jetrader - March/April 2013 - 18
Jetrader - March/April 2013 - Q&A: Paul A. Jacobson
Jetrader - March/April 2013 - 20
Jetrader - March/April 2013 - 21
Jetrader - March/April 2013 - 22
Jetrader - March/April 2013 - 23
Jetrader - March/April 2013 - Investment Thesis: Why Airplanes are Great Assets?
Jetrader - March/April 2013 - 25
Jetrader - March/April 2013 - 26
Jetrader - March/April 2013 - 27
Jetrader - March/April 2013 - 28
Jetrader - March/April 2013 - Remarket or Dismantle: That is the Question
Jetrader - March/April 2013 - 30
Jetrader - March/April 2013 - 31
Jetrader - March/April 2013 - 32
Jetrader - March/April 2013 - What's Going On?
Jetrader - March/April 2013 - 34
Jetrader - March/April 2013 - Aircraft Appraisals
Jetrader - March/April 2013 - 36
Jetrader - March/April 2013 - 37
Jetrader - March/April 2013 - Letter of Intent: Crafting Road Maps for Success
Jetrader - March/April 2013 - 39
Jetrader - March/April 2013 - ISTAT Members on the Move
Jetrader - March/April 2013 - 41
Jetrader - March/April 2013 - Advertiser.com/Advertiser Index
Jetrader - March/April 2013 - Cover3
Jetrader - March/April 2013 - Cover4
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