27 Jul Investor demand driving growth in aviation leasing industry
The recovery of the aviation industry post-pandemic is in full flow, signified with major milestones reached across commercial airlines and OEMs respectively, demonstrated by Europe’s largest airline, Ryanair, posting record Q2 profits, and India’s IndiGo placing the largest order of aircraft in history at the recent Paris Airshow. AIP Capital, a new global aviation asset management and investment company, argues that the recovery of the aviation industry is driving alternative capital into the sector, creating a wave of new entrants into the leasing and private credit industry within aerospace.
Launched in May 2023, AIP already has a $1.6 billion portfolio encompassing 30 aircraft, with another 68 Boeing 737 Max models on order. Its activities include aircraft management, operating and acquisition finance, and private credit investing, and currently has an additional $2.6 billion of capital deployed in investment grade, high-yield and distressed aviation credit. The AIP Capital team has a successful track record of leveraging relationships and a unique investment approach to deliver outsized returns on assets, with previous aircraft investments totaled approximately $5 billion across 119 assets.
Jared Ailstock, Managing Partner at AIP Capital has commented on why investors are increasingly turning to aviation:
“There is a lot of really different and attractive ways to get yield in the environment we are living in right now. I think a lot of people have looked at different parts of that market and said ‘Well, the risk/return in X, Y, Z investment is way better than aviation’, and I think some of those participants wouldn’t have said that a couple of years ago.
“Where we have seen success are folks that have either been coming into the space for the very first time, because they view the entry point as being a lot more attractive today because there isn’t as much equity in the space, or guys who have been able to weather the storm and they view aviation as a core part of their strategy and they will continue to deploy equity throughout various cycles.”
