Many aircraft leasing providers are left waiting on the tarmac, grounded by modelling and reporting struggles. The process takes too long and it involves extracting data from as many as five systems within the business, and crunching the numbers in a multi-faceted spreadsheet.
From Miagen’s perspective, aircraft leasing is looking increasingly like an industry that’s crying out for FP&A. Headwinds – whether in the form of competition or regulation – will force lessors to plan more efficiently and to have better visibility of information in order to drive their business.
The Global Airfinance Conference took place on Miagen’s doorstep in Dublin during January, so naturally we went along to get an inside track on some of the trends that will be shaping the leasing industry in the months and years ahead.
The overriding feeling on the ground was of increased amounts of capital chasing the same deals. The headline story from the conference is how Chinese lessors are showing their commitment to the sector as serious players. What this means in practice is that increased market liquidity naturally drives down lease rental factors. There are other external factors exerting pressure on lessors, with new banking rules looking likely to raise the cost of borrowing.
Decisions like moving an aircraft out of one region into another could involve reconfiguration from two-class to one-class – on the face of it a simple economic decision, but one that might require input from credit, risk, and finance to manage ongoing diversification.
We think that’s a strong argument for consolidating multiple reporting tools into one single financial performance management system. Its ability to assemble information in one place gives CFOs and business leaders a single window on the business, and is a vital tool in helping them plan with greater agility and to manoeuvre out of the way of any turbulence.
And speaking of turbulence, kudos to Mamoun Kuzbari of Novus Aviation Capital who described the airline leasing sector’s current boom as a “liquidity tsunami”. Many around the conference preferred another word that starts with the letter B: bubble.