ISTAT Jetrader - Summer 2024 - 24

AUDIENCE POLLS
When will Boeing achieve a
production rate of the 737 MAX
equal to what it produced in
2019? (i.e., 52 per month?)
* 2% - 2025
* 12% - 2026
* 29% - 2027
* 22% - 2028
* 28% - After 2028
* 8% - Never
When will reliability issues
affecting the Pratt & Whitney GTF
engine be largely resolved?
* 0% - 2024
* 2% - 2025
* 34% - 2026
* 28% - 2027
* 37% - After 2027
O'Leary noted that while the core
message of ESG is acknowledged, there
is caution surrounding greenwashing,
emphasizing the need for genuine
action. " The core message is there, but
people are cautious around things that
are greenwashed, " he said. " Revolt is
the last stage before mass adoption. "
The panel also discussed the role
of governments in promoting SAF
production. Halaby expressed the
expectation of increased governmental
support for SAF initiatives,
considering its vital role in reducing
carbon emissions.
The discussion touched upon
the cost implications of adopting
sustainable practices, particularly in
SAF production. Halaby highlighted
challenges in accessing SAF due to
both its cost and availability, with
airlines facing pressure to increase
24 * THE OF F I C I AL PUBL I CAT I ON OF ISTAT
ticket prices. Sheridan discussed
skepticism's impact on sustainabilitylinked
financings, noting that
governmental involvement and EU
reporting frameworks may drive
changes in the future.
" The EU is looking at a reporting
framework for ESG on par with
financial reporting, " Sheridan said.
" It's huge, and it's going to embed
ESG considerations into operations.
It's going to be hard to BS these
reports. The ultimate aim of this is to
have radical transparency to eliminate
greenwashing. Once you add in the
taxonomy reporting, people in the
aircraft financing world will really
have to pay attention. It's going to
have a positive impact on anyone who
supports the issue. "
The panel addressed the need for
technological innovations alongside
SAF adoption. O'Leary emphasized
the importance of focusing on new
technologies to achieve net-zero
emissions in aviation, particularly
in enhancing aircraft efficiency and
airframe design.
Forslund highlighted the potential of
electric aircraft, emphasizing their lower
operating costs and potential to address
emissions. However, he noted challenges
in widespread adoption, particularly in
middle-income countries where new
aircraft sales are increasing.
Navigating the Volatile
Capital Markets of 2024
Mark Streeter, managing director at
JP Morgan, moderated the Capital
Markets Panel and was joined by
John Beekman, chief financial officer
at Griffin Global Asset Management;
Meghan Montana, senior vice president
and treasurer at American Airlines;
Paraic Quinn, head of trading and
capital markets at Avolon; Jonathan
Root, senior vice president at Moody's
Investors Service; and Radha Tilton,
managing director at Goldman Sachs.
Beekman discussed Griffin's goal
of achieving an investment-grade
rating, emphasizing growth and risk
management strategies to align with
investment-grade criteria.
Montana explained American Airlines'
approach to funding its aircraft orders,
considering various financing options
such as cash, bank debt, leasing and
enhanced equipment trust certificates
(EETC). She highlighted the importance
of flexibility and timing in selecting the
most efficient capital sources. Montana
also discussed the evolving role of
lessors and debt markets in aircraft
financing, noting a shift toward diverse
financing sources and preferences
for certain debt products based on
market conditions.
Root provided insights into credit
ratings and the recovery process for
airlines, indicating progress toward
pre-pandemic liquidity levels and
expectations for airlines to manage
balance sheets prudently in light of
potential future challenges.
Tilton discussed the complexities
of monetizing loyalty programs and the
considerations for airlines in leveraging
these assets within their capital
structure. She highlighted differences in
market perception and investor appetite
based on airline size and loyalty program
strength. Tilton also addressed the state
of the asset-backed securities (ABS)
market, noting a gradual recovery with
ongoing deal progress and increased
investor interest compared to previous
years. However, she highlighted the
importance of issuer preferences and
market attractiveness in determining the
pace of ABS issuance.
AFTERMARKET:
Challenges, Pitfalls
and Opportunities
Jep Thornton, partner at Aerolease
Aviation LLC, moderated a panel on
the challenges and opportunities in the
aviation aftermarket featuring David
Chaimovitz, founder and CEO of Setna iO;
David Moreno, chief operating officer of
FTAI Aviation; and Tyler Norman, president
and CEO of Aero Engine Solutions.
ISTAT Jetrader - Summer 2024

Table of Contents for the Digital Edition of ISTAT Jetrader - Summer 2024
