Overview:
- Credits:
- 7.5
- Level:
- 4
- Semester:
- Spring
- Subject:
- Finance
- School:
- Business
- Coordinator:
- John Kelly
FIN41590 Aviation Asset Management
Academic Year 2023/2024
This module seeks to develop in students a broad understanding of the salient features of the airline and aircraft financing business. The module will draw on the life-cycle of functional, financial and operational issues encountered by airlines and lessors, their operating environment, and deal with the aircraft specific issues associated with owning a portfolio of leased aircraft throughout their operational lives. The module will also examine the supply and demand aspects impacting the business, the particular aspects of aircraft lease transactions, evaluating the credit risk of an airline, and lease related dealings with airline customers at the start and end of the lease, including transitioning an aircraft during its operational life between 2 customers. One series of lectures will deal exclusively with the characteristics of an aircraft asset.Guest lecturers from industry will provide state-of-the-art experience and case studies.
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Curricular information is subject to change
Learning Outcomes:
Students will learn about many of the functional, financial and operational issues from the aviation industry.
At the end of the module you will to:
1. Analyse the macroeconomic drivers of demand for commercial air travel.
2. Describe how aircraft manufacturers supply aircraft to meet that demand.
3. Demonstrate how airlines finance their aircraft - in particular, through leasing
4. Analyse the aircraft leasing business, with a focus on how it interfaces with both manufacturers and airlines.
5. The economics of Aircraft Leasing - value components
6. Explain the management of the aircraft asset; managing aircraft throughout their life cycle, maintenance & value considerations.
7. Discuss Aircraft Portfolio Management (Credit Risk Management is dealt with in a separate module).
| Student Effort Type | Hours |
|---|---|
| Lectures | 24 |
| Specified Learning Activities | 36 |
| Autonomous Student Learning | 128 |
| Total | 188 |
Requirements, Exclusions and Recommendations
Not applicable to this module.
Module Requisites and Incompatibles
Not applicable to this module.
Assessment Strategy
| Description | Timing | Component Scale | % of Final Grade | ||
|---|---|---|---|---|---|
| Examination: Closed book exam under controlled conditions | 2 hour End of Trimester Exam | No | Graded | No | 30 |
| Group Project: Present to the class on a topic assigned to your group | Unspecified | n/a | Graded | No | 30 |
| Continuous Assessment: Various Projects which will include the following (among other projects): Basic Lease Modelling Exercise Complex Lease Modelling Exercise - including Maintenance Aircraft Portfolio Risk Management |
Varies over the Trimester | n/a | Graded | No | 40 |
| Resit In | Terminal Exam |
|---|---|
| Summer | Yes - 2 Hour |
Feedback Strategy/Strategies
• Feedback individually to students, on an activity or draft prior to summative assessment
• Feedback individually to students, post-assessment
• Group/class feedback, post-assessment
How will my Feedback be Delivered?
Typical feedback strategy will be as follows: 1. Initial Formative Projects (either Group or Individual) - with low weightings (not>10%) - focus on learning rather than assessment - Group Feedback - Post Assessment 2. During projects - tutorials covering assignments - available to answer questions either in person or by email 3. Final Individual or Group Projects - Feedback Individually or by Group - Post Assessment
Books – not all in Print as limited publication volumes
1. Guzha, Vitaly Raghavan, Sunder, S’Agostino, Damon J.
Aircraft Leasing and Financing Elsevier January 2019
Tools for Success in International Aircraft Acquisition and Management
ISBN 978-0-12-815285-0
$120 - €100 approx.
This book covers the subject matter in quite a few of the MSc Aviation Finance modules and brings it together in a very good format over 14 chapters.
If you are to buy one book, this is the one to get!
2. Morrell, P.
Airline Finance 4th Edition Routledge May 2013
ISBN 978 1 40945 278 2
£35 (Hardback £95)
Basic enough textbook – good starting point – worth reading in its entirety but the following chapters provide a useful starting point:
Chapter 1 – Industry Financial Performance
Chapter 5 – Sources of Finance
Chapter 10 – Aircraft Leasing
Chapter 11 – Aircraft Securitisation
3. Day, Alistair L
Applied Lease Finance: A practitioners guide to Leasing - Euromoney 2013
ISBN 978 1 78137 086 5
£270 (EBook £250)
Alistair Day has a specialist company Systematic Finance (www.system.co.uk) which sells detailed modelling books using excel, providing templates etc. The individual books cost £60 each. This is real number crunching stuff but gets into the detail of lease and associated cash flow evaluation.
4. Nasreen Desai/Robert Murphy – Out of Print
Aircraft Financing 4th Edition Euromoney 2011
ISBN: 978 1 84374 895 3
£199 (EBook £180)
Legal focus on commercial issues in aircraft financing. This is the definitive commercial legal textbook on the subject, and as such extremely helpful in these modules and the Law of Aviation Finance module as well. This book and 4 below are sister texts.
Robert tells me that this book is now out of print and that he has reacquired the rights to publish this book, which he may do in 2019. It is however still available for sale.
Part B – Transaction Structuring looks at all aspects legal, credit, value and cross border considerations
Part C – Core Finance Products/Operating Leasing – looks at the core fundamentals of Operating Leasing, but then looks at individual country markets and what issues exist for operating leasing to airlines located therein.
Part D - Regulatory Matters is of particular relevance to the Law of Aviation Finance Module
5. Ronald Sheinberg – Out of Print
The Commercial Aircraft Finance Handbook – Euromoney 2014
ISBN 978 1 78137 260 9
£175 (EBook £150)
Written from a lawyer’s perspective (Vedder Price Partner) it deals with all aspects and structures used in aircraft financing. A sister publication of the above.
This explains the plethora of terms (definitions etc.) used in this industry and gives them substance, mainly in the context of US and NYC law.
6. Chris Boobyer – Barclays Asset Finance
Leasing & Asset Finance 4th Edition – Euromoney 2003
ISBN: 1 85564 985 3
£110
Somewhat out of date but gives a good analytical frame work of all aspects of Lease Finance. Probably supplanted by the above books at 1, 3 & 4. Not one to buy if you can read the replacement books. I don’t have a copy of this book.
7. Airfinance Annual – typically produced at the time of the Aviation Finance Conferences in Dublin - January
Articles & analysis of the current aircraft finance market.
8. Bijan Vasign/Reza Taleghani/Darly Jenkins
Aircraft Finance: Strategies for managing Capital Costs in a turbulent Industry – J Ross Publishing 2012
ISBN 328 9 47982 397 7
US$90 (EBook also available)
Written by faculty members at Embry Riddle Aeronautical University, it provides a good general understanding of the aircraft, airline and associated aircraft financing industry. A good basic textbook.
9. Bijan Vasign/ Kenneth Fleming/Barry Humphries
The Foundation of Airline Finance 2015 – Routledge 2014
Basics of Finance for Airlines
ISBN 978 0 41574 326 6
Amazon US$40
General read on the issues and how to deal with them in airline financing. This is a substantial book (600 +pages) covering both theory and practice with an airline focus. Chapters 8 – Airline Capital Budgeting, 9 – Airline Capital Structure/Cost of Capital, 12 – Analysis of Leases are probably the most relevant, but its overview of the Industry and its financing is also useful background reading.
10. Bijan Vasign
Introduction to Air Transport Economics; From Theory to Applications – Routledge 2013
ISBN 978 1 40945 478 8
Amazon US$50
This deals with the macro economic issues involved in the airline business, and touches therefor on the financing aspects of aircraft. It gives a great understanding of the macro shifts that affected the airline industry in the years up to 2012. Probably a good textbook for our economics course.
11. Rigas Doganis
Flying Off Course 4th Edition – Airline Economics & Marketing – Routledge 2010
ISBN 978 0 415 44737 9
This looks at airlines and their high growth rate but marginal profitability, looking at the history of airlines, and how this enormous growth has come about, because of both the effects of deregulation and the impact of the LCC airlines. It’s a useful text to understand the dynamics/components and drivers of airline operations.
12. Adam Pilarski
Why can’t we make money in Aviation – Routledge 2008
ISBN 978 0 75464 911 3
Amazon US$60
Mr Pilarski is an industry veteran who works for Avitas one of the leading consultancies in aviation. He is both amusing, astute and a great observer of what has happened and why. It is a history of great airline failures, written at a time when it seemed like 90% of the US Airline industry was in bankruptcy. Probably good for history but not essential.
13. Paul Clark
Buying the Big Jets – 3rd Edition Routledge 2017
ISBN 978-1138749825
Amazon US$30 to 50
This book looks at fleet planning and the decisions that go into the choice of aircraft types. How to accommodate variable travel demand within a fixed capacity fleet. This helps understand why airlines have the fleets they have and the issues with fleet planning which lessors need to understand to appreciate the credit risks of their customers operations.
Chapters 8 – Aircraft Economics, and chapter 9 – Investment Appraisal are quite relevant. The case studies in this book are very helpful in explaining airline operations and capital budgeting decisions.
14. Donal P Hanley
Aircraft Operating Leasing – Kluwer Law International (August 2012)
ISBN 978 9041140456
Amazon £30
Written by a senior executive of ACG, with both a legal and a business background. This book covers a typical aircraft operating lease contract, taking readers through the principal provisions, with a detailed example document reviewed in detail. A good understanding of the format and construction of the core documents that surround aircraft financing.
This book is essential reading and reference text for a proper and detailed understanding of what is contained in an aircraft lease contract, and why! Essential for the Law of Aviation Finance Module.
15. Brian F Havel & Gabriel S Sanchez
The Principles & Practice of International Aviation Law – Cambridge University Press (2014)
ISBN 978 1107697737
This is the book to explain the transnational nature of aircraft finance, lease and registration complexities. The Principles and Practice of International Aviation Law provides an introduction to, and demystification of, the private and public dimensions of international aviation law. Unlike other global sectors, the air transport industry is not governed by a discrete area of the law, but by disparate transnational regulatory instruments. Everything from the routes that an international air carrier can serve to the acquisition of its fleet and its liability to passengers and shippers for incidents arising from its operations can be the object of bilateral and multilateral treaties that represent diverse and often contradictory interests.
It is a text more of interest to lawyers, but written in a very understandable way, and as such a useful reference.
16. Stephen Holloway
Straight & Level – Practical Airline Economics 3rd Edition – Ashgate 2008 Reprinted 2015
ISBN 978 0 7546 7258 6
This is probably the definitive economic textbook on the airline industry, written specifically for Masters level students wanting to understand how airlines are managed and its business model designed and adapted.
17. Alistair L Day
Mastering Financial Modelling in MS Excel, FT Prentice Hall
Alistair has a series of books all focussed on the use of excel for various financial models, including valuation and lease evaluation models. Look at his website see details at book 2) above. These are well worth buying and reading especially for those who are not strong in the use of excel of building financial models.
Excel Modelling Skills with VBA
I cannot over emphasise the importance of students having top level Excel and modelling skills as a pre-requisite for joining this industry. With few exceptions, there will be a modelling assignment in every internship and/or employment interview process, and your ability to take the problem and put it into a model which you can use to both manipulate and evaluate the cash flows, and show, in summary, the outcomes of that analysis, will be critical to your future career path.
Many of you already have some of these skills but the following books (you don’t need to read and learn the contents of more than 1 of these) have been recommended to me by both past students and experts in financial models, and if this is an area of weakness, you should start working on this as soon as possible in the current academic year.
18. Keith A Allman
Modelling Structured Finance Cash Flows with Excel, Wiley Finance 2007
ISBN 978 0470042908
19. Chandan Sengupta
Financial Analysis and Modelling using Excel and VBA, Wiley Finance 2010 2nd Edition
ISBN 978 0470275603
20. Simon Benninga
Financial Modelling, The MIT Press 4th Edition 2010
ISBN 978 0262027281
Useful Aviation Websites – Get Reading about the Industry NOW!
Most of this information is freely available, for those that are not, we have an active campaign to get a reduced rate subscription for the MSc Aviation Finance Team of Faculty and Students. This is an evolving process and I will provide occasional updates as and when these more extensive publications and insights become available.
IATA Economics https://www.iata.org/publications/Pages/index.aspx
If you want to know what is happening to the airline industry, then the IATA website is a font of useful knowledge, giving regular updates on what’s happening in the global and regional economies that impacts on airlines, on traffic and yields (fare paid), the financial condition of airlines, and industry developments. IATA is the world’s airline industry body, so essential reading.
Airbus http://www.airbus.com/
Boeing http://www.boeing.com/
Both manufacturers have detailed websites which give a lot of information on the market outlook, their products, and why their strategy (and model line-up) best suits their prediction of future aircraft needs. Again, essential reading.
B737 Site http://www.b737.org.uk/
This is a private website which tracks all matters B737 and covers the history of the type and its development since 1969. The website is for sale and has become of less value in recent years as other sources have improved the information they supply.
OAG https://www.oag.com/
OAG is another publication from the pre internet days, Official Airline Guide was the global list of every airline’s schedules and traffic patterns, a dataset which is in huge demand by airlines as they plan their route network and flight schedules. OAG is more focussed on flights and traffic data and analytics, but none the less gives useful data about airline operations and activities. It too has some free publications and a blog which is worth subscribing to, and they regularly produce publications and reports of general interest.
Flight Global https://www.flightglobal.com/
FlightGlobal is one of the leading industry information/publication and conference organisers and is responsible for magazines like Flight International and Airline Business. They are part of a large EU based publications/media group, and own Cirium, a leading Aviation Consultancy and Database Provider to the aviation industry (see below). They have blogs and daily newsletters of interest to students.
You should subscribe to their blogs, daily and regular newsletters, and occasional “thought piece” articles which give good broad industry updates, often of great relevance to industry happenings.
Cirium https://www.linkedin.com/company/cirium/
Cirium were previously known as Ascend and are one of the key consultancy businesses in this industry, and we will have a lecture from Rob Morris, their head of Consultancy, during the Spring of 2020. They publish information from time to time, and you need to subscribe to their regular newsletters, but a great source of information on industry happenings is through their LinkedIn profile to which you should subscribe.
Ishka https://www.ishkaglobal.com/
Ishka Global is another leading consultancy business, many of whom worked previously with Ascend/Cirium but they focus on credit analysis and general lessor consultancy. Again, their online newsletters are essential reading for students with the regular industry “thought” pieces. Their “latest insights” are useful.
IBA Group https://www.iba.aero/
IBA Group, led by Phil Seymour (CEO) and Dr Stuart Hatcher (COO) are both an advisory firm as well as being a specialist third party asset manager (for smaller organisations who cannot have the same in-house expert team as IBA provides) so have broad expertise across the industry. They host regular webinars, seminars and industry briefings. You should sign up to their website, LinkedIn and other profiles and start getting valuable industry information. They have also employed a former graduate of the MSc Aviation Finance programme. We will hopefully get Phil and his team present at some stage during the year.
Aircraft Monitor http://www.aircraftmonitor.com/
Technical Guide to Aircraft and Maintenance – excellent workbooks and explanations.
This website, established by the Chief Technical Officer for Jackson Square Aviation, a Japanese Owned Lessor, is probably the best source of technical and modelling materials explaining the entire workings of Maintenance Utility and, if cash reserves are paid by the airline, how to model the impact of flight operations on the utility value of an aircraft.
This is essential reading for the entire class as part and parcel of the technical aspects of the Topics in Aviation Finance Module.
Airline Monitor http://www.airlinemonitor.com/
Excellent reference source for Orders/Deliveries/Actual Aircraft Delivery Prices/Market Trends. Ed Greenslet produces this document and has a lifetime looking at trends in aircraft, values, and has a long track record of being ahead of the curve on seeing trends.
UCD has a subscription to this publication which is only available online but all MSc AF students can log on online as follows:
User ID: UCDMSC2018 (Case sensitive)
Password: Classof2018 (Case sensitive)
Among the most interesting pieces in this website is Ed’s unique perspective on the aircraft business over 35 years and its evolution since the dawn of the jet age – look for his “Industry Tutorial” header on the website which tells the story of how the aviation industry got to where it is today.
As well as masses of hard data on traffic, production rates, aircraft prices and values and thereby demand for aircraft, he gives his own views (interspersed between the data) and looks out twice a year into market developments. This also gives an idea of actual OEM selling prices and trading values, so giving some insight into how aircraft values change over time. He has an archive going back 30 years and produces all his data in excel so you can download in either PDF or XLXS formats depending on what you are using the data for.
Airfleets http://www.airfleets.net/home/
Gives details on an aircraft by aircraft basis, by type, operator, and airline fleets – just basic data.
Oliver Wyman
https://www.oliverwyman.com/our-expertise/industries/aviation-aerospace-defense.html
Oliver Wyman is a Consultancy Business with an aviation practice, which is owned by Marsh & McLennan one of the leading Global Insurance businesses with a particular focus on aviation.
They routinely publish industry papers and provide an external perspective on the happenings within the airline and aircraft businesses.
Their global fleet and MOR summary outlook for the period 2019 to 2029 is of great interest, and can be accessed at: https://www.oliverwyman.com/our-expertise/insights/2019/jan/global-fleet-mro-market-forecast-commentary-2019-2029.html
They have a statistical webpage which features interesting statistics about the industry, called planstats: https://www.planestats.com/ this is worth subscribing to and getting your daily fix called “nOW arriving” a daily interesting aviation fact.
Publications and News Sources
This is a useful but by no means comprehensive list of key publications and other available industry news sources – spend a little time researching and if you find another useful source please let me know and I’ll add it to this listing.
1. AirFinance Journal:
UCD Library has this publication – They run several conferences annually including in Dublin in January each year.
2. Airline Economics:
I have sent them your UCD Connect email addresses and they will give you a 12-month free subscription to their publication as students. Again, they compete with the AFJ on both publications and conferences, so another excellent source of news about the industry.
3. Flight International:
The main publication from Flight Global and one of the main industry publications, with a focus on airlines and fleet issues. I hope to get a subscription to this publication in the UCD Smurfit library.
4. Aviator Aero: https://aviator.aero/
A useful listing of the daily news stories about airlines, lessors, manufacturers and what’s happening generally. This is often a good place to just see what is happening before going to the more detailed sources later. You subscribe to their free offering and get a daily email with all the news.
5. Aircraft Investor: http://www.aircraftinvestor.com
A website which keeps track of investor interests in debt and equity transactions with lessors and airlines. This gives a good starting point for your further research.
6. CAPA Centre for Aviation: https://centreforaviation.com/analysis/airline-leader
CAPA is a professional research organisation which provides detailed analysis and reviews of aircraft, airline and aviation issues on a paid subscription basis. Most of the worlds airlines and aircraft financiers are members and pay for this research. Among their many publications is a quarterly strategic report on aviation matters, targeted at the CEO level, and while it reports on a slightly behind the curve basis, the publication is free and gives good analysis which can help students in their own research efforts, being well organised and very topical.
7. Simple Flying https://simpleflying.com/
A useful website with interesting articles
Other Useful Governmental and/or Industry Lobby Group References
US Department of Transportation – Great Statistics on US Airlines
https://www.bts.gov/
Airlines for America – Data Sets for US Carriers
http://airlines.org/data/
http://airlines.org/data/a4a-presentation-industry-review-and-outlook/
Airlines for Europe – Recent Initiative among EU based Airlines – little data but lots on policy issues as their primary purpose is as a lobby group.
https://a4e.eu/
Boeing Capital Corporation – Funding Outlook
https://www.boeing.com/company/key-orgs/boeing-capital/#/cmo
Glossary of Terms used in Measuring Airline Performance
https://en.wikipedia.org/wiki/Airline_cost_glossary#Total_Revenue_per_Available_Seat_Mile_.28TRASM.29
Selected Airlines – Corporate Information – This is neither complete nor regularly updated, but simply is a list of possible references – if any of the links are incorrect please let me know
Alaska Airlines
http://phx.corporate-ir.net/phoenix.zhtml?c=109361&p=irol-IRHome
Ryanair Corporate
https://investor.ryanair.com/
IAG
http://www.iairgroup.com/phoenix.zhtml?c=240949&p=irol-irhome
Cathay Pacific
https://www.cathaypacific.com/cx/en_GB/about-us/investor-relations/interim-annual-reports.html
Singapore
http://www.singaporeair.com/en_UK/ie/about-us/information-for-investors/
Emirates
https://www.emirates.com/ie/english/about/press-room.aspx
Allegiant
https://www.allegiantair.com/about-allegiant
Spirit
https://www.spirit.com/AboutUs.aspx
EasyJet
http://corporate.easyjet.com/investors.aspx
Air Asia
http://www.airasia.com/my/en/about-us/investor-relations-main.page
http://www.airasiax.com/
Lion Air
http://lionair.co.id/lion-experience/about-us
Wizz Air
http://corporate.wizzair.com/en-GB/
Norwegian Airlines
http://www.norwegian.com/uk/about/company/investor-relations/
Virgin Atlantic
http://www.virginatlantic.com/gb/en/media-centre.html
GOL Linhas Aereas Brasil
http://ri.voegol.com.br/default_en.asp?idioma=1&conta=44
Air Arabia
http://www.airarabia.com/en/corporate-investor-relations
LATAM
http://www.latamairlinesgroup.net/phoenix.zhtml?c=81136&p=irol-irhome
THY Turkish Airlines
http://investor.turkishairlines.com/en
Jet Blue
http://blueir.investproductions.com/investor-relations
Volaris
http://ir.volaris.com/English/home/default.aspx
Copa
http://investor.shareholder.com/copa/
Southwest
http://www.southwestairlinesinvestorrelations.com/
Jet Blue
http://blueir.investproductions.com/investor-relations
Indigo
https://www.goindigo.in/information/investor-relations.html
Jet Airways
http://www.jetairways.com/EN/EU/InvestorInformation/financials.aspx
Comair
http://www.comair.co.za/investor-relations
Aegean
https://en.about.aegeanair.com/?_ga=1.113458884.293193598.1484916919
Icelandair
http://www.icelandairgroup.is/investors/
Virgin Australia
https://www.virginaustralia.com/au/en/about-us/company-overview/investor-information/
Cebu Pacific
http://cebupacificaircorporate.com/#
This just an introductory list, so go out and add others like Easyjet, some of the US Majors to your list of reference points – they will all help your understanding of the industry.
Selected Aircraft Lessors
Each of the Lessors have very extensive websites and investor presentations, including recordings of their various quarterly reports. These are typically in the Investor Relations sections of their websites.
Listening to these recordings gives a much more in-depth explanation of what is happening at each lessor and what its key business and ratings metrics and activities are, so hugely enhances the presentations which they present during those calls. Students should familiarise themselves with the past 24 months financial reports (all of 2016, 2017 and 2018), both quarterly and Annual, and read the very detailed content in their 10-K Annual Reports filed with the SEC in the US.
AerCap http://www.aercap.com/
Air Lease http://www.airleasecorp.com/
BOC Aviation https://www.bocaviation.com/
Avolon http://avolon.aero/
SMBC Aviation https://www.smbc.aero/
GECAS https://www.gecas.com/en/our-company/about-us.html
CDB Aviation https://www.cdbaviation.aero/
Fly Leasing http://www.flyleasing.com/investor-relations/
AirCastle https://www.aircastle.com/about
ACG http://www.aviationcapitalgroup.com/
CALC http://www.calc.com.hk/en/default.aspx
Goshawk https://www.goshawk.aero/
Accipiter https://www.accipiter.aero/index.php
ICBC https://www.icbcleasing.com/aviation.html
Nordic AC http://www.nac.dk/
BoComm website not available yet
List of ABS Securitisation Parties in 2017 (Not necessarily Complete – will be updated in November 2019)
Rating Agencies issue Pre-Sale Reports on all issues of EETC’s and ABS Securities and explain their ratings methodology which is very helpful for understanding the stress testing that is used to examine the ratings of various debt issues.
The best website, in terms of access to useful information, is that of Kroll Bond Rating Agency (KBRA) which you can register with and thereafter get access to their dedicated Aircraft Asset Backed Securitisation Transactions. They have produced an annual report of Aircraft ABS transactions each year, this is the link to 2017: https://www.krollbondratings.com/show_report/8582
Typically, you can log on to each of the Rating Agency websites, register yourself, and then have access to their pre-sale reports and updates on previously rated issues. Often the pre-sale reports are online going back 2 to 3 years. However, some rating agencies charge additionally for this research.
All of the Issues will be on Bloomberg, with up to date pricing and information. The issuer details below will help you find them.
Kroll https://www.krollbondratings.com/
S&P https://www.standardandpoors.com/en_US/web/guest/home
Moody’s https://www.moodys.com/
Fitch https://www.fitchratings.com/site/home
Issuer Name of Vehicle
ACG Group Merlin
GECAS Labrador Aviation Finance
Fan Engine Securitisation Limited
Apollo Apollo Aviation Securitisation Equity Trust 2016-1,2
Air Lease Blackbird Capital Aircraft Lease Securitisation Limited 2016-1,2
Castlelake Castlelake Aircraft Securitisation Trust CAST 2016-1
AWAS Diamond Head Aviation 2015 Limited
DVB Bank AIM Aviation Finance Limited
Jetscape Eagle 1 Limited (E-Jets)
Avalon Emerald Aviation Finance Limited
DAE Falcon
Technical
Article explaining the Pratt & Whitney Geared turbofan concept vs CFM Leap Technology
http://theflyingengineer.com/?s=geared+turbofan&search=Go
1. Guzha, Vitaly Raghavan, Sunder, S’Agostino, Damon J.
Aircraft Leasing and Financing Elsevier January 2019
Tools for Success in International Aircraft Acquisition and Management
ISBN 978-0-12-815285-0
$120 - €100 approx.
This book covers the subject matter in quite a few of the MSc Aviation Finance modules and brings it together in a very good format over 14 chapters.
If you are to buy one book, this is the one to get!
2. Morrell, P.
Airline Finance 4th Edition Routledge May 2013
ISBN 978 1 40945 278 2
£35 (Hardback £95)
Basic enough textbook – good starting point – worth reading in its entirety but the following chapters provide a useful starting point:
Chapter 1 – Industry Financial Performance
Chapter 5 – Sources of Finance
Chapter 10 – Aircraft Leasing
Chapter 11 – Aircraft Securitisation
3. Day, Alistair L
Applied Lease Finance: A practitioners guide to Leasing - Euromoney 2013
ISBN 978 1 78137 086 5
£270 (EBook £250)
Alistair Day has a specialist company Systematic Finance (www.system.co.uk) which sells detailed modelling books using excel, providing templates etc. The individual books cost £60 each. This is real number crunching stuff but gets into the detail of lease and associated cash flow evaluation.
4. Nasreen Desai/Robert Murphy – Out of Print
Aircraft Financing 4th Edition Euromoney 2011
ISBN: 978 1 84374 895 3
£199 (EBook £180)
Legal focus on commercial issues in aircraft financing. This is the definitive commercial legal textbook on the subject, and as such extremely helpful in these modules and the Law of Aviation Finance module as well. This book and 4 below are sister texts.
Robert tells me that this book is now out of print and that he has reacquired the rights to publish this book, which he may do in 2019. It is however still available for sale.
Part B – Transaction Structuring looks at all aspects legal, credit, value and cross border considerations
Part C – Core Finance Products/Operating Leasing – looks at the core fundamentals of Operating Leasing, but then looks at individual country markets and what issues exist for operating leasing to airlines located therein.
Part D - Regulatory Matters is of particular relevance to the Law of Aviation Finance Module
5. Ronald Sheinberg – Out of Print
The Commercial Aircraft Finance Handbook – Euromoney 2014
ISBN 978 1 78137 260 9
£175 (EBook £150)
Written from a lawyer’s perspective (Vedder Price Partner) it deals with all aspects and structures used in aircraft financing. A sister publication of the above.
This explains the plethora of terms (definitions etc.) used in this industry and gives them substance, mainly in the context of US and NYC law.
6. Chris Boobyer – Barclays Asset Finance
Leasing & Asset Finance 4th Edition – Euromoney 2003
ISBN: 1 85564 985 3
£110
Somewhat out of date but gives a good analytical frame work of all aspects of Lease Finance. Probably supplanted by the above books at 1, 3 & 4. Not one to buy if you can read the replacement books. I don’t have a copy of this book.
7. Airfinance Annual – typically produced at the time of the Aviation Finance Conferences in Dublin - January
Articles & analysis of the current aircraft finance market.
8. Bijan Vasign/Reza Taleghani/Darly Jenkins
Aircraft Finance: Strategies for managing Capital Costs in a turbulent Industry – J Ross Publishing 2012
ISBN 328 9 47982 397 7
US$90 (EBook also available)
Written by faculty members at Embry Riddle Aeronautical University, it provides a good general understanding of the aircraft, airline and associated aircraft financing industry. A good basic textbook.
9. Bijan Vasign/ Kenneth Fleming/Barry Humphries
The Foundation of Airline Finance 2015 – Routledge 2014
Basics of Finance for Airlines
ISBN 978 0 41574 326 6
Amazon US$40
General read on the issues and how to deal with them in airline financing. This is a substantial book (600 +pages) covering both theory and practice with an airline focus. Chapters 8 – Airline Capital Budgeting, 9 – Airline Capital Structure/Cost of Capital, 12 – Analysis of Leases are probably the most relevant, but its overview of the Industry and its financing is also useful background reading.
10. Bijan Vasign
Introduction to Air Transport Economics; From Theory to Applications – Routledge 2013
ISBN 978 1 40945 478 8
Amazon US$50
This deals with the macro economic issues involved in the airline business, and touches therefor on the financing aspects of aircraft. It gives a great understanding of the macro shifts that affected the airline industry in the years up to 2012. Probably a good textbook for our economics course.
11. Rigas Doganis
Flying Off Course 4th Edition – Airline Economics & Marketing – Routledge 2010
ISBN 978 0 415 44737 9
This looks at airlines and their high growth rate but marginal profitability, looking at the history of airlines, and how this enormous growth has come about, because of both the effects of deregulation and the impact of the LCC airlines. It’s a useful text to understand the dynamics/components and drivers of airline operations.
12. Adam Pilarski
Why can’t we make money in Aviation – Routledge 2008
ISBN 978 0 75464 911 3
Amazon US$60
Mr Pilarski is an industry veteran who works for Avitas one of the leading consultancies in aviation. He is both amusing, astute and a great observer of what has happened and why. It is a history of great airline failures, written at a time when it seemed like 90% of the US Airline industry was in bankruptcy. Probably good for history but not essential.
13. Paul Clark
Buying the Big Jets – 3rd Edition Routledge 2017
ISBN 978-1138749825
Amazon US$30 to 50
This book looks at fleet planning and the decisions that go into the choice of aircraft types. How to accommodate variable travel demand within a fixed capacity fleet. This helps understand why airlines have the fleets they have and the issues with fleet planning which lessors need to understand to appreciate the credit risks of their customers operations.
Chapters 8 – Aircraft Economics, and chapter 9 – Investment Appraisal are quite relevant. The case studies in this book are very helpful in explaining airline operations and capital budgeting decisions.
14. Donal P Hanley
Aircraft Operating Leasing – Kluwer Law International (August 2012)
ISBN 978 9041140456
Amazon £30
Written by a senior executive of ACG, with both a legal and a business background. This book covers a typical aircraft operating lease contract, taking readers through the principal provisions, with a detailed example document reviewed in detail. A good understanding of the format and construction of the core documents that surround aircraft financing.
This book is essential reading and reference text for a proper and detailed understanding of what is contained in an aircraft lease contract, and why! Essential for the Law of Aviation Finance Module.
15. Brian F Havel & Gabriel S Sanchez
The Principles & Practice of International Aviation Law – Cambridge University Press (2014)
ISBN 978 1107697737
This is the book to explain the transnational nature of aircraft finance, lease and registration complexities. The Principles and Practice of International Aviation Law provides an introduction to, and demystification of, the private and public dimensions of international aviation law. Unlike other global sectors, the air transport industry is not governed by a discrete area of the law, but by disparate transnational regulatory instruments. Everything from the routes that an international air carrier can serve to the acquisition of its fleet and its liability to passengers and shippers for incidents arising from its operations can be the object of bilateral and multilateral treaties that represent diverse and often contradictory interests.
It is a text more of interest to lawyers, but written in a very understandable way, and as such a useful reference.
16. Stephen Holloway
Straight & Level – Practical Airline Economics 3rd Edition – Ashgate 2008 Reprinted 2015
ISBN 978 0 7546 7258 6
This is probably the definitive economic textbook on the airline industry, written specifically for Masters level students wanting to understand how airlines are managed and its business model designed and adapted.
17. Alistair L Day
Mastering Financial Modelling in MS Excel, FT Prentice Hall
Alistair has a series of books all focussed on the use of excel for various financial models, including valuation and lease evaluation models. Look at his website see details at book 2) above. These are well worth buying and reading especially for those who are not strong in the use of excel of building financial models.
Excel Modelling Skills with VBA
I cannot over emphasise the importance of students having top level Excel and modelling skills as a pre-requisite for joining this industry. With few exceptions, there will be a modelling assignment in every internship and/or employment interview process, and your ability to take the problem and put it into a model which you can use to both manipulate and evaluate the cash flows, and show, in summary, the outcomes of that analysis, will be critical to your future career path.
Many of you already have some of these skills but the following books (you don’t need to read and learn the contents of more than 1 of these) have been recommended to me by both past students and experts in financial models, and if this is an area of weakness, you should start working on this as soon as possible in the current academic year.
18. Keith A Allman
Modelling Structured Finance Cash Flows with Excel, Wiley Finance 2007
ISBN 978 0470042908
19. Chandan Sengupta
Financial Analysis and Modelling using Excel and VBA, Wiley Finance 2010 2nd Edition
ISBN 978 0470275603
20. Simon Benninga
Financial Modelling, The MIT Press 4th Edition 2010
ISBN 978 0262027281
Useful Aviation Websites – Get Reading about the Industry NOW!
Most of this information is freely available, for those that are not, we have an active campaign to get a reduced rate subscription for the MSc Aviation Finance Team of Faculty and Students. This is an evolving process and I will provide occasional updates as and when these more extensive publications and insights become available.
IATA Economics https://www.iata.org/publications/Pages/index.aspx
If you want to know what is happening to the airline industry, then the IATA website is a font of useful knowledge, giving regular updates on what’s happening in the global and regional economies that impacts on airlines, on traffic and yields (fare paid), the financial condition of airlines, and industry developments. IATA is the world’s airline industry body, so essential reading.
Airbus http://www.airbus.com/
Boeing http://www.boeing.com/
Both manufacturers have detailed websites which give a lot of information on the market outlook, their products, and why their strategy (and model line-up) best suits their prediction of future aircraft needs. Again, essential reading.
B737 Site http://www.b737.org.uk/
This is a private website which tracks all matters B737 and covers the history of the type and its development since 1969. The website is for sale and has become of less value in recent years as other sources have improved the information they supply.
OAG https://www.oag.com/
OAG is another publication from the pre internet days, Official Airline Guide was the global list of every airline’s schedules and traffic patterns, a dataset which is in huge demand by airlines as they plan their route network and flight schedules. OAG is more focussed on flights and traffic data and analytics, but none the less gives useful data about airline operations and activities. It too has some free publications and a blog which is worth subscribing to, and they regularly produce publications and reports of general interest.
Flight Global https://www.flightglobal.com/
FlightGlobal is one of the leading industry information/publication and conference organisers and is responsible for magazines like Flight International and Airline Business. They are part of a large EU based publications/media group, and own Cirium, a leading Aviation Consultancy and Database Provider to the aviation industry (see below). They have blogs and daily newsletters of interest to students.
You should subscribe to their blogs, daily and regular newsletters, and occasional “thought piece” articles which give good broad industry updates, often of great relevance to industry happenings.
Cirium https://www.linkedin.com/company/cirium/
Cirium were previously known as Ascend and are one of the key consultancy businesses in this industry, and we will have a lecture from Rob Morris, their head of Consultancy, during the Spring of 2020. They publish information from time to time, and you need to subscribe to their regular newsletters, but a great source of information on industry happenings is through their LinkedIn profile to which you should subscribe.
Ishka https://www.ishkaglobal.com/
Ishka Global is another leading consultancy business, many of whom worked previously with Ascend/Cirium but they focus on credit analysis and general lessor consultancy. Again, their online newsletters are essential reading for students with the regular industry “thought” pieces. Their “latest insights” are useful.
IBA Group https://www.iba.aero/
IBA Group, led by Phil Seymour (CEO) and Dr Stuart Hatcher (COO) are both an advisory firm as well as being a specialist third party asset manager (for smaller organisations who cannot have the same in-house expert team as IBA provides) so have broad expertise across the industry. They host regular webinars, seminars and industry briefings. You should sign up to their website, LinkedIn and other profiles and start getting valuable industry information. They have also employed a former graduate of the MSc Aviation Finance programme. We will hopefully get Phil and his team present at some stage during the year.
Aircraft Monitor http://www.aircraftmonitor.com/
Technical Guide to Aircraft and Maintenance – excellent workbooks and explanations.
This website, established by the Chief Technical Officer for Jackson Square Aviation, a Japanese Owned Lessor, is probably the best source of technical and modelling materials explaining the entire workings of Maintenance Utility and, if cash reserves are paid by the airline, how to model the impact of flight operations on the utility value of an aircraft.
This is essential reading for the entire class as part and parcel of the technical aspects of the Topics in Aviation Finance Module.
Airline Monitor http://www.airlinemonitor.com/
Excellent reference source for Orders/Deliveries/Actual Aircraft Delivery Prices/Market Trends. Ed Greenslet produces this document and has a lifetime looking at trends in aircraft, values, and has a long track record of being ahead of the curve on seeing trends.
UCD has a subscription to this publication which is only available online but all MSc AF students can log on online as follows:
User ID: UCDMSC2018 (Case sensitive)
Password: Classof2018 (Case sensitive)
Among the most interesting pieces in this website is Ed’s unique perspective on the aircraft business over 35 years and its evolution since the dawn of the jet age – look for his “Industry Tutorial” header on the website which tells the story of how the aviation industry got to where it is today.
As well as masses of hard data on traffic, production rates, aircraft prices and values and thereby demand for aircraft, he gives his own views (interspersed between the data) and looks out twice a year into market developments. This also gives an idea of actual OEM selling prices and trading values, so giving some insight into how aircraft values change over time. He has an archive going back 30 years and produces all his data in excel so you can download in either PDF or XLXS formats depending on what you are using the data for.
Airfleets http://www.airfleets.net/home/
Gives details on an aircraft by aircraft basis, by type, operator, and airline fleets – just basic data.
Oliver Wyman
https://www.oliverwyman.com/our-expertise/industries/aviation-aerospace-defense.html
Oliver Wyman is a Consultancy Business with an aviation practice, which is owned by Marsh & McLennan one of the leading Global Insurance businesses with a particular focus on aviation.
They routinely publish industry papers and provide an external perspective on the happenings within the airline and aircraft businesses.
Their global fleet and MOR summary outlook for the period 2019 to 2029 is of great interest, and can be accessed at: https://www.oliverwyman.com/our-expertise/insights/2019/jan/global-fleet-mro-market-forecast-commentary-2019-2029.html
They have a statistical webpage which features interesting statistics about the industry, called planstats: https://www.planestats.com/ this is worth subscribing to and getting your daily fix called “nOW arriving” a daily interesting aviation fact.
Publications and News Sources
This is a useful but by no means comprehensive list of key publications and other available industry news sources – spend a little time researching and if you find another useful source please let me know and I’ll add it to this listing.
1. AirFinance Journal:
UCD Library has this publication – They run several conferences annually including in Dublin in January each year.
2. Airline Economics:
I have sent them your UCD Connect email addresses and they will give you a 12-month free subscription to their publication as students. Again, they compete with the AFJ on both publications and conferences, so another excellent source of news about the industry.
3. Flight International:
The main publication from Flight Global and one of the main industry publications, with a focus on airlines and fleet issues. I hope to get a subscription to this publication in the UCD Smurfit library.
4. Aviator Aero: https://aviator.aero/
A useful listing of the daily news stories about airlines, lessors, manufacturers and what’s happening generally. This is often a good place to just see what is happening before going to the more detailed sources later. You subscribe to their free offering and get a daily email with all the news.
5. Aircraft Investor: http://www.aircraftinvestor.com
A website which keeps track of investor interests in debt and equity transactions with lessors and airlines. This gives a good starting point for your further research.
6. CAPA Centre for Aviation: https://centreforaviation.com/analysis/airline-leader
CAPA is a professional research organisation which provides detailed analysis and reviews of aircraft, airline and aviation issues on a paid subscription basis. Most of the worlds airlines and aircraft financiers are members and pay for this research. Among their many publications is a quarterly strategic report on aviation matters, targeted at the CEO level, and while it reports on a slightly behind the curve basis, the publication is free and gives good analysis which can help students in their own research efforts, being well organised and very topical.
7. Simple Flying https://simpleflying.com/
A useful website with interesting articles
Other Useful Governmental and/or Industry Lobby Group References
US Department of Transportation – Great Statistics on US Airlines
https://www.bts.gov/
Airlines for America – Data Sets for US Carriers
http://airlines.org/data/
http://airlines.org/data/a4a-presentation-industry-review-and-outlook/
Airlines for Europe – Recent Initiative among EU based Airlines – little data but lots on policy issues as their primary purpose is as a lobby group.
https://a4e.eu/
Boeing Capital Corporation – Funding Outlook
https://www.boeing.com/company/key-orgs/boeing-capital/#/cmo
Glossary of Terms used in Measuring Airline Performance
https://en.wikipedia.org/wiki/Airline_cost_glossary#Total_Revenue_per_Available_Seat_Mile_.28TRASM.29
Selected Airlines – Corporate Information – This is neither complete nor regularly updated, but simply is a list of possible references – if any of the links are incorrect please let me know
Alaska Airlines
http://phx.corporate-ir.net/phoenix.zhtml?c=109361&p=irol-IRHome
Ryanair Corporate
https://investor.ryanair.com/
IAG
http://www.iairgroup.com/phoenix.zhtml?c=240949&p=irol-irhome
Cathay Pacific
https://www.cathaypacific.com/cx/en_GB/about-us/investor-relations/interim-annual-reports.html
Singapore
http://www.singaporeair.com/en_UK/ie/about-us/information-for-investors/
Emirates
https://www.emirates.com/ie/english/about/press-room.aspx
Allegiant
https://www.allegiantair.com/about-allegiant
Spirit
https://www.spirit.com/AboutUs.aspx
EasyJet
http://corporate.easyjet.com/investors.aspx
Air Asia
http://www.airasia.com/my/en/about-us/investor-relations-main.page
http://www.airasiax.com/
Lion Air
http://lionair.co.id/lion-experience/about-us
Wizz Air
http://corporate.wizzair.com/en-GB/
Norwegian Airlines
http://www.norwegian.com/uk/about/company/investor-relations/
Virgin Atlantic
http://www.virginatlantic.com/gb/en/media-centre.html
GOL Linhas Aereas Brasil
http://ri.voegol.com.br/default_en.asp?idioma=1&conta=44
Air Arabia
http://www.airarabia.com/en/corporate-investor-relations
LATAM
http://www.latamairlinesgroup.net/phoenix.zhtml?c=81136&p=irol-irhome
THY Turkish Airlines
http://investor.turkishairlines.com/en
Jet Blue
http://blueir.investproductions.com/investor-relations
Volaris
http://ir.volaris.com/English/home/default.aspx
Copa
http://investor.shareholder.com/copa/
Southwest
http://www.southwestairlinesinvestorrelations.com/
Jet Blue
http://blueir.investproductions.com/investor-relations
Indigo
https://www.goindigo.in/information/investor-relations.html
Jet Airways
http://www.jetairways.com/EN/EU/InvestorInformation/financials.aspx
Comair
http://www.comair.co.za/investor-relations
Aegean
https://en.about.aegeanair.com/?_ga=1.113458884.293193598.1484916919
Icelandair
http://www.icelandairgroup.is/investors/
Virgin Australia
https://www.virginaustralia.com/au/en/about-us/company-overview/investor-information/
Cebu Pacific
http://cebupacificaircorporate.com/#
This just an introductory list, so go out and add others like Easyjet, some of the US Majors to your list of reference points – they will all help your understanding of the industry.
Selected Aircraft Lessors
Each of the Lessors have very extensive websites and investor presentations, including recordings of their various quarterly reports. These are typically in the Investor Relations sections of their websites.
Listening to these recordings gives a much more in-depth explanation of what is happening at each lessor and what its key business and ratings metrics and activities are, so hugely enhances the presentations which they present during those calls. Students should familiarise themselves with the past 24 months financial reports (all of 2016, 2017 and 2018), both quarterly and Annual, and read the very detailed content in their 10-K Annual Reports filed with the SEC in the US.
AerCap http://www.aercap.com/
Air Lease http://www.airleasecorp.com/
BOC Aviation https://www.bocaviation.com/
Avolon http://avolon.aero/
SMBC Aviation https://www.smbc.aero/
GECAS https://www.gecas.com/en/our-company/about-us.html
CDB Aviation https://www.cdbaviation.aero/
Fly Leasing http://www.flyleasing.com/investor-relations/
AirCastle https://www.aircastle.com/about
ACG http://www.aviationcapitalgroup.com/
CALC http://www.calc.com.hk/en/default.aspx
Goshawk https://www.goshawk.aero/
Accipiter https://www.accipiter.aero/index.php
ICBC https://www.icbcleasing.com/aviation.html
Nordic AC http://www.nac.dk/
BoComm website not available yet
List of ABS Securitisation Parties in 2017 (Not necessarily Complete – will be updated in November 2019)
Rating Agencies issue Pre-Sale Reports on all issues of EETC’s and ABS Securities and explain their ratings methodology which is very helpful for understanding the stress testing that is used to examine the ratings of various debt issues.
The best website, in terms of access to useful information, is that of Kroll Bond Rating Agency (KBRA) which you can register with and thereafter get access to their dedicated Aircraft Asset Backed Securitisation Transactions. They have produced an annual report of Aircraft ABS transactions each year, this is the link to 2017: https://www.krollbondratings.com/show_report/8582
Typically, you can log on to each of the Rating Agency websites, register yourself, and then have access to their pre-sale reports and updates on previously rated issues. Often the pre-sale reports are online going back 2 to 3 years. However, some rating agencies charge additionally for this research.
All of the Issues will be on Bloomberg, with up to date pricing and information. The issuer details below will help you find them.
Kroll https://www.krollbondratings.com/
S&P https://www.standardandpoors.com/en_US/web/guest/home
Moody’s https://www.moodys.com/
Fitch https://www.fitchratings.com/site/home
Issuer Name of Vehicle
ACG Group Merlin
GECAS Labrador Aviation Finance
Fan Engine Securitisation Limited
Apollo Apollo Aviation Securitisation Equity Trust 2016-1,2
Air Lease Blackbird Capital Aircraft Lease Securitisation Limited 2016-1,2
Castlelake Castlelake Aircraft Securitisation Trust CAST 2016-1
AWAS Diamond Head Aviation 2015 Limited
DVB Bank AIM Aviation Finance Limited
Jetscape Eagle 1 Limited (E-Jets)
Avalon Emerald Aviation Finance Limited
DAE Falcon
Technical
Article explaining the Pratt & Whitney Geared turbofan concept vs CFM Leap Technology
http://theflyingengineer.com/?s=geared+turbofan&search=Go
| Name | Role |
|---|---|
| John Kelly | Lecturer / Co-Lecturer |
| Practical | Offering 1 | Week(s) - 23 | Fri 10:00 - 11:50 |
| Practical | Offering 1 | Week(s) - 22, 23 | Fri 15:00 - 16:50 |
| Practical | Offering 1 | Week(s) - 23 | Mon 15:00 - 16:50 |
| Lecture | Offering 1 | Week(s) - 22, 23, 24, 25, 26, 29, 30, 31, 32, 33 | Thurs 10:00 - 12:50 |
| Lecture | Offering 1 | Week(s) - 22 | Tues 10:00 - 11:50 |
| Practical | Offering 1 | Week(s) - 23, 24 | Tues 10:00 - 11:50 |
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