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Business Aviation Finance Market to Grow

So Says Airbus …

According to a new study commissioned by Airbus Corporate Jets (ACJ), eight out of ten (82-percent) U.S.-based business aviation financiers and private jet brokers expect access to business aviation financing to increase over the next three-years, with 17-percent expecting it to stay the same and only one-percent predicting a decline.

Some 98-percent of survey respondents believe business aviation finance rates are still attractive, and it remains advantageous to use credit when buying an aircraft as opposed to tying up capital. However, over the next five-years, one in four (25-percent) of those surveyed expect a dramatic increase in the size of cash deposits used in the purchase of business jets; a further 54-percent anticipate a slight rise, reducing the size of any debt secured to purchase aircraft.

Also, with fiscal and monetary policy uncertainty, 74-percent of survey respondents posit the preference for fixed-rate transactions, as opposed to floating rates, will increase over the next five-years amongst those utilizing leases and credit to purchase business aircraft.

Some 69-percent of business aviation financiers and brokers believe demand for operating leases—under which lessors take the residual value risk buyer—will increase between now and 2028.

The survey revealed that of the U.S. business aviation professionals interviewed, 85-percent expect sales of larger business jets to increase over the next five years, while half (51-percent) believe the forecasted growth in demand will help subject aircraft retain their residual value. However, 42-percent believe increased sales will have no impact and valuations will move in line with the overall market.

Nevertheless, as demand for larger business jets is increasing, 77-percent of those surveyed believe securing financing for such will be easier than securing finance for midsized and smaller jets.

Finally, 68-percent believe specialist lenders will gain market share over mainstream banks.

Airbus Corporate Jets vice-president of Commercial for North America Sean McGeough set forth: “The business aviation market is predicted to enjoy consistent growth in the coming years, and aircraft financing will be key to facilitating this growth. Many of those purchasing aircraft do not want to tie up huge amounts of their capital in the transaction and turn to leasing and other forms of credit.”

Mr. McGeough continued: “The business aviation finance market is very competitive with many financial players willing to lend money to meet their client’s needs. Innovation and flexibility in the sector is also increasing and we expect this to continue.”

The recently launched ACJ TwoTwenty features six-wide, VIP living areas of approximately 130-square-feet each. The aircraft offers a true office environment boasting best-in-class connectivity and a range of relaxation options including a California King-size bed, an en suite bathroom with rain shower ,and a 55-inch 4K television.

The ACJ TwoTwenty offers twice the cabin space of similarly-priced Ultra-Long-Range (ULR) business jets, along with market-leading fuel efficiency and excellent reliability. The TwoTwenty occupies the same parking footprint as competitive ULR jets and is capable of departing the same airports while maintaining operating costs as much as one-third lower than competing ULR jets.

With a range of up to 5,650-nautical-miles, the ACJ TwoTwenty meets the requirements of 99.9-percent of all U.S. departures, connecting city pairs such as Los Angeles to London, Miami to Buenos Aires, and New York to Istanbul.

Airbus builds ACJs to order only, thereby eliminating the financial pressure to reduce prices to move unsold inventory. Furthermore, ACJ maintains commonality in new feature designs, allowing existing aircraft to be retrofitted to the latest capabilities without buying a new model.

As with all ACJ aircraft, the ACJ TwoTwenty is capable of flying on up to a fifty-percent blend of kerosene and so-called Sustainable Aviation Fuel (SAF) while keeping to the technical specifications of Jet A.

2023 occasions the ACJ TwoTwenty’s NBAA-BACE debut.

FMI: www.airbus.com

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