ISTAT Jetrader - Winter 2022 - 12

PERSPECTIVES
FT: We do not see any benefit
currently in placing a large order,
especially because the OEMs are
sold out for five-plus years and
escalation is a challenge given the
current inflationary environment. We
maintain a continuous presence in all
four origination channels, which have
all contributed to our success over
the last three decades. The trading
channel is brimming with activity at
the moment. We are watching to see
the impact of rising rates and inflation
on this market.
Jetrader: DAE saw a sizable yearover-year
decline in funding costs
over the six months to 30 June 2022.
How did DAE cut interest expense
so dramatically?
FT: We consciously accessed the
capital markets in early 2021 to raise
US$3.5 billion of new debt to, in part,
refinance the high coupon debt we
had issued in 2017 and 2018 that was
scheduled to mature in 2022, 2023
and early 2024. We disclosed in one of
our quarterly reports that the coupon
differential between the newly issued
debt and the refinanced debt was
approximately 300 bps. This is driving
the differential in our reported interest
expense this year.
Jetrader: DAE established an
aircraft asset management
business in 2018 (DAE Aircraft
Investor Services). How has this
business been doing, and what are
your long-term plans for this?
FT: When we established this activity,
we set a target of US$5 billion of
assets under management. We're
nearly there and are now setting our
sights on a much bigger number. The
opportunity set is large.
Jetrader: Can you tell us about
DAE's MRO (Joramco)?
FT: DAE Engineering operates as a
stand-alone division and caters to the
airframe and components maintenance
requirements of airlines in the region.
12 * THE OF F I C I AL PUBL I CAT I ON OF ISTAT
We go to market from a single,
100,000+ square meter facility in
Amman. This allows us to target
airlines in Europe, Africa, the Middle
East and South Asia. We run the
business on an independent basis and
believe we can double the revenue of
this division in the next few years.
Jetrader: Congratulations on DAE
securing a favorable ESG rating
from Sustainalytics. Can you tell
us about DAE's focus on ESG and
how this benefits the business
and stakeholders?
FT: In September 2021, we received
our inaugural ESG Risk Rating from
Sustainalytics. We scored 14.1 on
its rating scale, indicating that our
business is " Low Risk, " and we are
the best rated aircraft lessor among
our rated peers. We understand
the importance ESG risks have on
our business, and the importance
of ESG risks to our financial and
nonfinancial stakeholders. Adequate
and accurate transparency and
disclosure are fundamental principles
to us, and a key area of focus. That
is why we were the first lessor to
have our ESG disclosures audited,
and why we reassess our disclosures
regularly against our stakeholders'
requirements and international
best practices to ensure that what
we publish is informative and
beneficial to the consumers of our
annual reporting.
For the business, knowing and
understanding not only the magnitude
of our emissions footprint, but
also each of the components, is
critical in allowing us to develop and
implement a strategy on ESG risk
management and future emissions
management and decarbonization.
We also understand that for investors
and financiers, ESG factors are
becoming an ever more important
element of financing, and so would
also assert that our leadership in
ESG transparency among lessors will
ultimately also be a key differentiator
for us when managing our future
liquidity needs.
For our stakeholders -
particularly our employees, our
customers, our shareholders and
society at large - our focus on ESG
fosters positive value chain creation
and benefits across the board. By
aligning our long-term targets with
that of the Paris Agreement and UAE's
Net Zero by 2050 Strategic Initiative,
we are making a public statement on
climate protection, and this is valued
by each of our stakeholder groups.
Employees increasingly want to work
for companies that demonstrate
environmental consciousness, so
we benefit from increased talent
attraction and retention. We are
purchasing the newest, cleanest
aircraft for our fleet; we are supporting
our customers and suppliers to reduce
their footprints; and we are supporting
our sovereign shareholders' vision to
reduce the UAE's emissions.
Jetrader: How does DAE's recent
acquisition of Sky Fund I Irish Ltd.
fit into the company's future plans?
FT: This transaction takes us another
step closer to our publicly stated goal
of growing our owned and managed
aircraft portfolio to approximately
800 aircraft. The addition of 36 highly
desirable, in-demand aircraft to
DAE's fleet supplements our current
customer base and represents a
valuable addition to DAE's overall
business. Further, with approximately
90% next-generation technology
aircraft, this acquisition also
significantly accelerates our goals to
transition to cleaner, greener aircraft
for our customers.
Jetrader: Any final words of
wisdom?
FT: Deploy capital in this space with
patience and discipline. Returns and
margins will follow. Growth will take
care of itself.
ISTAT Jetrader - Winter 2022

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