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South Asia’s leading aviation advisory and research practice
India aircraft financing & leasing outlookIndia aircraft financing & leasing outlookIndia aircraft financing & leasing outlookIndia aircraft financing & leasing outlook
Feb-2019
Key issuesKey issuesKey issuesKey issues
1© 2019 CAPA India
© 2019 CAPA India
© 2019 CAPA India
© 2019 CAPA India
DisclaimerDisclaimerDisclaimerDisclaimerThe information and analyses contained in this report have been prepared by Centre for Asia
Pacific Aviation India (CAPA India). The contents of the document are confidential and
intended for the sole use of the intended recipient/s, and use of any data, information or
section of the document without the prior written consent of CAPA India is strictly prohibited.
While every effort has been made to ensure that the report adheres to the highest quality
and accuracy standards, CAPA India assumes no responsibility for errors and omissions
related to the data, calculations or analysis contained herein, and in no event will CAPA India,
its associates, subsidiaries, directors or employees be liable for direct, special, incidental or
consequential damages (including but not limited to damages for the loss of business profits,
business interruption and loss of business information) arising directly or indirectly from the
use of (or failure to use) this document.
This document contains forward-looking statements. Such statements may include the words
‘may’, ‘will’, ‘plans’, ‘estimates’, ‘anticipates’, ‘believes’, ‘expects’, ‘intends’ and similar
expressions. These statements are made on the basis of existing information and simple
assumptions. Such forward-looking statements are subject to numerous caveats, risks and
uncertainties, which could cause actual outcomes to be materially different from those
projected or assumed in the statements.
© 2019 CAPA India
Table of ContentsTable of ContentsTable of ContentsTable of Contents
Fleet forecast
Financing fleet growth
Going it alone
Twin aisle is different
© 2019 CAPA India 6
Fleet
Pax – Domestic 5x International 3.8xFleet – Single aisle 4.3x Twin aisle 5.7x
Pax traffic
165
290
446
625
837
78 118173
232296
0
200
400
600
800
1000
FY20 FY25 FY30 FY35 FY40
Pa
sse
ng
ers
(m
n)
Domestic International
Source: CAPA India research and analysis
The next twenty years The next twenty years The next twenty years The next twenty years –––– 1.1 billion 1.1 billion 1.1 billion 1.1 billion paxpaxpaxpax with 3342 aircraftwith 3342 aircraftwith 3342 aircraftwith 3342 aircraft
63 133 178 247 357138263 352
502
652
553805
1238
1736
2333
0
500
1000
1500
2000
2500
FY20 FY25 FY30 FY35 FY40
Air
cra
ft u
nit
s
International WB International NB Domestic
1.1 bn
1201 3342
© 2019 CAPA India 7
A lot of aircraft to be financed – and engines matter
Significant long term delivery stream
Note: Fleet data as of 31-Jan-19 Source: CAPA India research and analysis, CAPA Fleet Database
Financing fleet growthFinancing fleet growthFinancing fleet growthFinancing fleet growth
397
168141
114
413 1
0
100
200
300
400
500
IndiGo SpiceJet Jet Airways GoAir Vistara Air India Alliance Air
Air
cra
ft u
nit
s
Narrowbody Jet Turboprop Widebody Jet
113 108
9076
68 70
4025 25 25 23 25 27 25 25
0
50
100
150
20
19
20
20
20
21
20
22
20
23
20
24
20
25
20
26
20
27
20
28
20
29
20
30
20
31
20
32
20
33
Air
cra
tf u
nit
s
Narrowbody Jet Turboprop
41%
40%
19%
Narrow body orders
Unspecified CFM International
Pratt & Whitney
60%
34%
4% 2%
Airbus Boeing ATR Bombardier
© 2019 CAPA India 8
Sale and lease back financing – not quite like the previous delivery cycle despite having substantial delivery stream
More of going it alone
Source: CAPA India research and analysis, CAPA Fleet Database
Financing fleet growthFinancing fleet growthFinancing fleet growthFinancing fleet growth
0
10
20
30
40
50
60
70
Air
cra
ft u
nit
s
86% 88% 86% 86% 83% 83% 84% 83%76%
14% 12%14% 14% 17%
17%16%
17%
24%
0
100
200
300
400
500
600
700
2010 2011 2012 2013 2014 2015 2016 2017 2018
Air
cra
ft u
nit
s
Leased Owned
0
5
10
15
20
25
30
35
40
2010 2011 2012 2013 2014 2015 2016 2017 2018
SLB
tra
nsa
ctio
ns
23%
77%
Full Service Carrier Low Cost Carrier
© 2019 CAPA India 9
Cash generation may not support going it alone for long – FC aircraft debt may reappear prominently in FY19
Some green shoots
Source: CAPA India research and analysis, Company fillings
Limited means in an increasingly difficult business environment with large Limited means in an increasingly difficult business environment with large Limited means in an increasingly difficult business environment with large Limited means in an increasingly difficult business environment with large
delivery streamsdelivery streamsdelivery streamsdelivery streams
0
2,000
4,000
6,000
8,000
10,000
12,000
FY2014 FY2015 FY2016 FY2017 FY2018
Ca
sh a
nd
ca
sh e
qu
iva
len
t
(IN
R m
n)
IndiGo SpiceJet GoAir Jet Airways
(10,000)
(5,000)
-
5,000
10,000
FY2014 FY2015 FY2016 FY2017 FY2018
Ne
t ca
sh g
en
era
ted
(IN
R m
n)
IndiGo SpiceJet GoAir Jet Airways
© 2019 CAPA India 10
Fewer, larger lessors with their own aircraft to place
Source: CAPA India research and analysis
Traditional SLB lessors which have supported India in the past have other plansTraditional SLB lessors which have supported India in the past have other plansTraditional SLB lessors which have supported India in the past have other plansTraditional SLB lessors which have supported India in the past have other plans
© 2019 CAPA India 11
SLB growth driven by new capital and relationships from
the changes in lessor ownership in recent years Strong credits get interest for SLBs
Lessor play is less in the twin aisle market A few lessors hold most of the aircraft
3
20
27 29
4347 46
1
9
18 19 18
0
10
20
30
40
50
2012 2013 2014 2015 2016 2017 2018
SLB
tra
nsa
ctio
ns
787 A350
13.6%
7.9%
6.4%
6.1%
5.4%
5.0%4.3%3.9%3.9%
3.9%
39.6%
Qatar Airways
British Airways
Etihad Airways
Air India
LAN Airlines
China Southern Airlines
Tui Ag
Xiamen Airlines
Finnair
Hainan Airlines
Others
Note: Aircraft in consideration are 737NG, 737 MAX, A320ceo family, A320neo family, 787 and A350.Source: CAPA India research and analysis
Twin aisle is differentTwin aisle is differentTwin aisle is differentTwin aisle is different
43.0%56.8%
57.0%43.2%
0%
20%
40%
60%
80%
100%
Single aisle Twin aisleAirline Lessor
0%
5%
10%
15%
20%
1 2 3 4 5 6 7 8 9 10
Lessor rank by In-service fleet
Single aisle Twin aisle
© 2019 CAPA India 12
Lessor interest is largely in middle of the range seating densities – potentially limiting aircraft
economics for diverse mission profiles and markets from India (Europe Vs North America Vs Oceania)
Source: CAPA India research and analysis, CAPA Fleet Database
Twin aisle is different Twin aisle is different Twin aisle is different Twin aisle is different –––– specs matterspecs matterspecs matterspecs matter
© 2019 CAPA India
© 2019 CAPA India
© 2019 CAPA India
© 2019 CAPA India
© 2019 CAPA India
© 2019 CAPA India
Thank You
© 2019 CAPA India Pvt. Ltd.
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