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India aircraft financing & leasing outlookIndia aircraft financing & leasing outlookIndia aircraft financing & leasing outlookIndia aircraft financing & leasing outlook

Feb-2019

Key issuesKey issuesKey issuesKey issues

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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,

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uncertainties, which could cause actual outcomes to be materially different from those

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© 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


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


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


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


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


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


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

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India aircraft financing & leasing ... - Centre for Aviation