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It turned out to be an unhappy Valentine’s Day for the Airbus A380 and her admirers, as Airbus announced the scrapping of the A380 programme, with the last deliveries scheduled for 2021. It’s hardly a shock, however, after the fleet’s first retirement last year and with two of them already being parted out. The economics of operating these fantastic beasts just never really made sense, however game-changing the concept (or indeed the passenger experience).…
At the end of last year I wrote a published piece entitled “The Allure of Investing in Aviation”. A client asked me this week whether, a year later, I stood by what I’d written. To answer that, you have to decide whether or not you think 2018 was a good year for the airline industry as a whole. There were many highs, but some telling lows as well. There can be no doubt…
The Hong Kong conferences are over for another year, and our Aviation Finance team had another very productive week at the various sessions. It was great to see so many familiar faces and connect with new people, and doing so in what is fast becoming one of the world’s new aviation finance powerhouse jurisdictions gave the meetings a real buzz.…
In this blog post we take a brief look at export credit agency (“ECA”) supported finance in the asset finance industry, and the development of a new template loan agreement by the UK’s Loan Market Association. The role of the ECAs ECA finance describes transactions where states (whether by direct sovereign bodies or by separately mandated organisations) provide (financial) support to would-be purchasers of certain goods or equipment constructed in that ECA’s home jurisdiction. ECA…
In this blog post we take a brief look at export credit agency (“ECA”) supported finance in the asset finance industry, and the development of a new template loan agreement by the UK’s Loan Market Association. The role of the ECAs  ECA finance describes transactions where states (whether by direct sovereign bodies or by separately mandated organisations) provide (financial) support to would-be purchasers of certain goods or equipment constructed in that ECA’s home jurisdiction. ECA…
Summary In last week’s case of Triple 7 MSN 27251 Ltd v. Azman Air Services Ltd,[1] Azman Air Services argued that two aircraft lease agreements were void under the English law doctrine of common mistake. The High Court considered this question and found that common mistake is only sufficient to void a lease agreement (or any other contract) where: the mistaken assumption on which the parties acted was fundamental to the contract; and the…
The sale and leaseback (“SLB”) model has been a key source of funding and portfolio management for lessors and airlines alike for some time now. There are two principal SLB transaction structures employed for new aircraft, as illustrated below. The first is the “back to back” sale, whereby an airline pays for and takes delivery of an aircraft as the purchaser under the purchase agreement with the manufacturer. The airline will then simultaneously sell the…
What a year it has been! At the start of 2017, Reed Smith had no aviation finance team. We have now established teams in London, New York and Abu Dhabi (and we’re not done yet!). Across the board we have structured and closed a diverse range of transactions for lenders, lessors and operators alike (and we still have one or two to go as we all race for the finishing line that is the Holidays).…
As we open our Advent Calendars each December, thoughts inevitably turn to Christmas, the New Year, and to what the next year will bring. But this year we are also looking 12 months ahead to New Year 2019. Why? Because January 2019 will see International Accounting Standard (IAS) 17 replaced by International Financial Reporting Standard (IFRS) 16. Now accounting standards may not be the most festive or exciting of topics, and to many of our…
The Reed Smith aviation team have returned to their offices in London, New York and Hong Kong but memories of this year’s Airline Economics “Growth Frontiers” Hong Kong conference are still fresh in the memory (or as fresh as they can be with jet lag!). Hong Kong’s Grand Hyatt was packed to the rafters with all of the leading industry stakeholders. Many of the key players we spoke to touched on recurring themes that seem…