AVIATION LEASING AS PART OF A BROADER INVESTMENT PORTFOLIO
March 2013
Executive Summary
Compared to property and infrastructure, aircraft leasing investments are a new asset class. The sector’s fragmented nature, its inherent lack of transparency and the sparse performance data have made it difficult for many investors to analyse and understand this type of investment. Based on the analysis of the aircraft leasing business model, the sources of value creation and the financing structures available to the sector, aircraft leasing is a viable investment that should be considered by institutional investors.
Aircraft assets share a number of common characteristics with other alternative assets, namely infrastructure and property. They are all hard, illiquid assets with long economic lives that require large upfront capital expenditure that is typically financed with a significant level of debt. They also all generate relatively predictable cash flows and are generally more liquid than either property or infrastructure.