The global airline industry currently has access to an abundance of fragmented capital, but there may not be an equal abundance of market awareness to adapt to potential changes in market conditions. This fragmentation has served the industry well during a period of significant growth and profits; however, due to the cyclical nature of the global airline sector, this lack of market awareness is leaving companies vulnerable to the next potential downturn. These are some of the observations presented by John Morabito, Group Head, Financial Institutions Group, CIT Commercial Air & CIT Maritime Finance, divisions of CIT Group in “Global Commercial Aerospace: Financing Trends”, the latest piece of market intelligence in the CIT Executive Insights video series.

“As the industry reaches a peak, it’s crucial that global airlines and financial institutions strategically and methodically plan their growth and access to capital in order to protect their economics before the sector enters a slowdown,” said Morabito. “In order to better serve our clients in the face of this prospect, CIT established a joint venture with Century Tokyo Leasing (CTL) that combines CIT’s platform and asset management experience with CTL’s unique capital backing and deep regional knowledge.”

Some of the other global aviation trends Morabito expands upon include:

• Lack of focus on midlife equipment: Capital providers and some carriers are missing opportunities with midlife equipment, largely due to a lack of knowledge and expertise in financing this type of asset.

• Opportunities in examining relative value options: A partner that understands new and midlife aircraft, technical considerations and regional nuances can assist in the creation of a diverse portfolio of assets and investments.

• Partnerships combine experience and expertise: CIT and CTL’s joint venture pairs financing solutions from CIT with CTL’s deep regional knowledge and unique capital backing.