Peter von Moltke

International aircraft lessors viewed with interest some telling facts released this week. 

The world’s airlines have scheduled some 3% more capacity on 2% more flights in December 2011, marking the seventh consecutive month of growth compared to the same period last year.

The OAG FACTS (Frequency and Capacity Trend Statistics) report for December reveals that 51,166 more scheduled flights offering 10.5m more seats will operate this month, totaling 322m seats on 2.5m flights. Average seats per flight in December total 126, compared to 124 a year ago.

International Lease Finance Corporation (ILFC), the world’s largest aircraft equipment lessor by value, has recorded a $1.3bn operating loss for Q3 2011 according to its parent American International Group (AIG).

AIG attributes the loss to impairment charges of $1.5bn that has come about as a result of ILFC's annual review of its aircraft fleet.

Simon McLean

Pitch Aviation (Pitch) has been re-formed by bringing together the collective industry expertise of three aviation specialists.

Pitch’s team consists of Andy Pavord, a UK Civil Aviation Authority- and Federal Aviation Administration-licensed aircraft engineer who has extensive experience in aircraft leasing, maintenance and engineering and who is Pitch’s original founder. Simon McLean, who was previously chief operating officer (COO) of Waha Leasing, and Roger Clarke, the company’s general counsel (external) a partner in international law firm Trowers & Hamlins LLP’s banking and finance department.

Reports abound in Australia that Macquarie Group is on the verge of bidding for Royal Bank of Scotland’s aircraft leasing business, RBS Aviation, worth an estimated US$6bn.

RBS Aviation is generally reckoned to be amongst the world’s top five commercial aircraft lessors with a portfolio, including current orders, of around 470 aircraft.

ILFC Holdings, Inc. (ILFC Holdings) has filed a registration statement with the US Securities and Exchange Commission for a proposed initial public offering (IPO). ILFC Holdings, a subsidiary of AIG Capital Corporation (AIG Capital), is a direct wholly owned subsidiary of American International Group, Inc. (AIG).

Prior to the completion of the IPO and subject to certain conditions, AIG Capital will transfer 100% of the common stock of International Lease Finance Corporation to ILFC Holdings.

Steven Udvar-Hazy

Boeing and Air Lease Corporation (ALC) have finalized an order for 14 Next-Generation 737-800s, with options for four more, and five 777-300ER (extended range) aeroplanes. The order marks the completion of part of an agreement announced during the Paris Air Show in June. At list prices, the order is valued at $2.5 billion.

Steven F. Udvar-Hazy, chairman and CEO of ALC said: “This order for Next-Generation 737-800s and 777-300ERs is a key building block in the foundation of our growing commercial leasing fleet. With this order, we'll be able to offer our clients a most economical, fuel-efficient and versatile aeroplane, suitable for a variety of profitable missions.”

FLY Leasing has entered into an agreement to purchase a $1.4bn portfolio of 49 aircraft, which will increase FLY’s total aircraft under operating lease to more than $3bn. The aircraft were previously managed by Global Aviation Asset Management, an Australian company. The aircraft are on lease to 23 airlines in 15 countries.

After completing the transaction, FLY will have 109 aircraft on lease to 53 airlines in 29 countries. The purchase price will be fully funded from FLY’s unrestricted cash and the assumption of existing non-recourse debt.

Norman Liu

Boeing has reached a major milestone with GE Capital Aviation Services (GECAS) through delivering the leasing company’s 400th aeroplane, a Next-Generation 737-800. GECAS leasing customer and Chinese carrier Xiamen Airlines will operate the aircraft.

Norman Liu, president and CEO of GECAS said: “Boeing is a key business partner providing us with advanced, efficient and reliable airplanes that our airline customers need to be successful in today’s competitive and environmentally sensitive marketplace.”

Colm Barrington

With record numbers of aircraft orders having taken place, the 49th Paris Air Show demonstrated the strength and a renewed confidence within the air finance industry. At the same time significant changes in the structure of global aircraft manufacture and financing became apparent.

Colm Barrington, CEO of FLY Leasing told Asset Finance International: “The Paris Air Show showed that more companies are coming back into the industry, manufacturers are announcing increased production and both leasing companies and airlines are ordering more aircraft. The cycle appears to be on the rise.”

Chang Cheow Teck

Singapore’s ST Aerospace has made its first foray into the leasing business after forming a joint venture with Japan’s Marubeni that will offer the CFM International CFM56 family of engines to customers globally.

The new Singapore-based company, Total Engine Asset Management (Team), will be equally owned and jointly managed by the partners. It is expected to begin operations in the second half of 2011.

Team’s initial engine leasing portfolio will include the CFM56-3, CFM56-5B and CFM56-7B engines that are used to power the Airbus A320 and Boeing 737 family of aircraft. 

The joint venture will leverage ST Aerospace’s expertise in total engine support, including engine technical management and engine Maintenance-By-the-Hour (MBH), alongside Marubeni’s extensive experience in financing and marketing knowledge, to bring value added solutions to customers worldwide.

“Team adds a new dimension to the engine total support capabilities already in place within ST Aerospace,” said Chang Cheow Teck, president ST Aerospace. “This significant partnership with Marubeni adds to our list of successful strategic partnerships and reflects our commitment to create long term value for our customers.”

Other notable joint ventures that ST Aerospace has entered into include Singapore Precision Repair and Overhaul with Messier Bugatti – a facility that specialises in the repair of landing gear systems and components.

Additionally, ST Aerospace Technologies, in collaboration with XAICO, is scheduled to open in 2012 and is an engine facility located in the Xiamen Aviation Industrial Zone that will provide MRO (maintenance, repair and overhaul) and total support services for the CFM56-5B and CFM56-7B engines.

“Beyond collaborating with our partners to form joint venture facilities, we also engage them in the engineering arena, designing and developing several products,” a spokesman for ST Aerospace told Asset Finance International.

“Noteworthy examples of these type of partnerships include our collaboration with Boeing for the Boeing 757-200 PTF conversion, as well as Eurocopter and CATIC for the development of the EC120 light helicopter.”

Gentaro Toya, senior operating officer at Marubeni’s Transportation Machinery Division, also commented: “Marubeni has an extensive track record in the investment of engine development programmes and aircraft leasing, as well as providing sales agency services for commercial aircraft, engines, business jets and various other services including aircraft components and airport ground handling services.”

Choo Han Khoon

“Over the last few years, there has been significant growth in the engine leasing market. We believe that this growth will be further propelled by the increased rate of new aircraft deliveries,” said Choo Han Khoon, executive vice-president, Engine Total Support at ST Aero.

“This collaboration is our first formal foray into the leasing business, and it now allows us to extend our engine total support expertise to better meet our customers’ needs for integrated engine solutions,” he concluded.

The joint venture plans to invest approximately US$100m worth of assets within the first two years, with equity injection of up to US$40m.

The 49th International Paris Air Show at Le Bourget will run from June 20-26, and will see 2,110 exhibitors, 340,000 trade and general public visitors and 200 international delegations.

It is the aviation and space industry’s largest event, and will see companies from across the globe view the 140 types of aircraft on display.

Howard Wolf

Experts in the helicopter industry have joined together with Perella Weinberg to form Lobo Leasing, a new joint venture that seeks to provide lease financing for helicopters and helicopter-related assets.

Howard Wolf, Bill Wolf, John Contas and Bruce Mauldin - who have decades of experience in the helicopter industry - will form the seasoned management team for Lobo Leasing.

GE Capital Aviation Services (GECAS) has moved to expand its position as a leading aircraft lessor and financier in China.

GECAS, the commercial aircraft leasing and financing division of GE, has agreed to deliver 20 new leased aircraft to airline customers in China throughout 2011.

Recent figures demonstrate the strong 2010 experienced by FLY Leasing, the global lessor of modern, fuel-efficient commercial jet aircraft. The company, which is managed and serviced by BBAM LLC, a global aircraft lease manager with more than 20 years experience, produced its financial results for 2010 on March 2.

“FLY had strong financial results for the year, with net income of $52.7m,” said Colm Barrington, CEO of FLY Leasing. “While these results were lower than the prior year, the 2009 year had benefited from a significant $82.7m pre-tax gain from the repurchase of notes payable.

Leasing remains the most important form of finance in the aircraft sector. According to research commissioned by CIT, 54% of respondents revealed that more than 50% of their fleets are leased, and they expect this to remain fairly consistent over the next five years.

Support funding from manufacturers (51%) ties with bank loans as the second most important form of aircraft finance followed by export credit loans (39%), secured bonds (28%), government loans (25%) and tax leases (24%). Islamic (Shariah) leasing makes an appearance at some 11% in terms of funding importance.

Aircraft lessor Avolon has announced an additional capital raising of $465m, bringing the total value of funds raised since May 2010 to in excess of $2.5bn.

The capital raising is the third announced by Avolon in eight months and consists of a fully underwritten long-term debt facility (including warehouse capacity) from a consortium of three leading US banks. The transaction was led and structured by Wells Fargo Securities and the consortium includes Citi and Morgan Stanley. It is intended that proceeds will be used to fund Avolon’s growing aircraft fleet and will significantly increase the company’s underwriting capacity

Only eight months after its formation, fast-growing aircraft lessor Avolon has returned again to the market for another significant injection of capital – whilst at the same time agreeing a sizeable sale and leaseback arrangement with four separate customers. The company now has a committed fleet of 60 aircraft valued at $2.8bn.

The second capital raising of $650m comprises $250m of equity and $400m of debt finance.  It comes with news of agreed terms to acquire 11 new aircraft, under sale and leaseback structures, from four airlines in Europe, Asia and Australia.

In what has turned out to be a busy week for GE Capital, comes news that GE Capital Aviation Services Limited (GECAS), is to open new offices in Accra, Ghana and Cape Town, South Africa to expand and strengthen relationships with its airline customers in Africa.

The Accra office will serve airline customers in West and Central Africa. The Cape Town office will focus on customers in southeastern Africa. North Africa will continue to be covered by GECAS’ Dubai office.

FLY Leasing Limited, a global lessor of modern commercial jet aircraft, reported third-quarter adjusted net income of $14.1m, or 52 cents per share, compared to $14.4m and $0.48 in the same period of 2009. Net income was $12.2m, or 45 cents per share. Cash flow was $40.4m, or $1.48 per share, compared to 96 cents in the same quarter last year, an increase of more than 50%. Total revenues for the third quarter of 2010 were $62.6m compared to $67.8m in the same period of the previous year.

DVB Bank and ICBC Financial Leasing, a wholly owned subsidiary of Industrial and Commercial Bank of China, have announced the successful closing of a five-year $162.8m term loan facility.

Through DVB’s Singapore-based subsidiary, DVB Group Merchant Bank (Asia) Ltd., it arranged and underwrote the portfolio financing of eight aircraft on operating leases to four international and Chinese airline lessees. The portfolio comprises a mix of new generation narrow-body aircraft from both Boeing and Airbus.

This five-year term loan facility is the first financing by a third-party international bank of any of ICBC´s leasing portfolio and represents a milestone in furthering the co-operation between DVB and ICBCFL.

Abu Dhabi-based Waha Capital will acquire about 29.8m shares in AerCap in exchange for $105m in cash, Waha’s 50% interest in AerVenture and the transfer of a 40% interest in Waha’s 16-aircraft portfolio. The total consideration for the shares in AerCap is about $380m based on the New York Stock Exchange closing price on Friday. Waha Capital’s main institutional shareholder is Mubadala Development Company. The completion of the transaction is scheduled for mid-November 2010.

Under the terms of the agreement, AerCap will provide all management services for Waha’s aircraft portfolio in return for servicing fees, and will open a representative office in Abu Dhabi.

Waha Capital, the Abu-Dhabi-based diversified investment holding company, has announced the delivery of four Bombardier CRJ900 aircraft to SkyWest Leasing Inc., a subsidiary of SkyWest Inc. the largest US regional airline on long-term operating leases. The aircraft will be used by one of SkyWest’s affiliates.

Salem Al Noaimi, CEO of Waha Capital PJSC said: “We are delighted to conclude this major transaction with such a leading US airline such as SkyWest. The lease deal consolidates Waha Capital’s position as one of the region’s key financial and investment institutions and raises its global profile in the aircraft leasing sector. We look forward to a long-term and productive relationship with SkyWest, which we see as an important partner in our effort to expand internationally.”

Dublin based aircraft leasing firm, Awas has taken delivery of the first aircraft in its order of 79 brand new Airbus A320s.

The aircraft is being leased to Jetstar Pacific Airlines and was handed over to the airline in Hamburg yesterday. The remainder of the aircraft will deliver between now and 2015.

"As we enter a significant growth phase of the business, the delivery of the first of our 79 A320s represents an exciting time in the history of AWAS. Our customers recognise the efficiencies which can be achieved through leasing new aircraft, such as the A320. For this reason, we have a strong pipeline of new aircraft coming into the fleet over the next five years" said Ray Sisson, president and CEO of Awas.

Stephen Udvar-Hazy has advised Boeing and Airbus to forget about upgrading their most popular planes with new engines.

Udvar-Hazy, founder of the world's largest aircraft leasing company, International Lease Finance Corp., and now the president of Air Lease Corp., said the benefits of fitting the Boeing 737 and the Airbus A320 family of single-aisle jets is too little to justify the expense, reported Bloomberg News.

Speaking in Munich, Udvar-Hazy said the re-engined planes would be too expensive and too heavy to compensate for the fuel they would save. Both Boeing and Airbus are considering whether to put new engines on those best-selling planes to compete with new jets from Canadian and Chinese manufacturers.

Belgian-based TNT Airways is to lease three Boeing 777 freighters for its Asian routes, introducing the type to its fleet next year.

TNT Airways is to acquire the aircraft from Guggenheim Aviation Partners. The first will be delivered in July 2011.

Two more 777Fs will be brought into the TNT fleet by the end of the same year.

TNT already uses four Boeing 747-400ERFs on its Europe-Asia routes. Two of these aircraft are owned while the other two are taken on short-term lease contracts.

Jazeera Airways Group today announced that Sahaab Aircraft Leasing (Sahaab), a fully owned subsidiary, has placed four Airbus A320 aircraft on long-term leases with Virgin America a California-based airline. This is Sahaab's first lease to a US-based customer and comes only a few months after the company was acquired by Jazeera Airways Group in February 2010. The contract is valued at €155m.

Jazeera Airways Group chairman Marwan Boodai said: "It was important for us to make our first placement as early as possible. However it was even more important to place the aircraft with the right customer and the award-winning Virgin America was the perfect customer. The airline, with 28 aircraft in service, is a rising star in North America and has a great all-round product.

We welcome Virgin America as Sahaab's latest customer and look forward to a long-term relationship with the airline."

A recent report entitled World Aircraft Leasing Market from Frost and Sullivan a global consultancy service, predicts that aircraft leasing will pick up steam towards the end of 2010 and the beginning of 2011. The report says new-generation aircraft rentals will increase quicker than older aircraft rentals although profitability is expected across the whole sector.

Falling interest rates are also expected to trigger growth in the air leasing sector. The report says that in 2008 and 2009, the leasing market maintained healthy profitability thanks to low interest rates. This was despite an increased number of parked aircraft and a fall in the market value/lease rentals of aircraft.

In 2009, the total fleet of aircraft held by leasing companies accounted for more than 31% of the world's active fleet. The aircraft fleet of all leasing companies grew from 5,757 aircraft in 2008 to 6,180 aircraft in 2009. However, the value of all the aircraft held by the leasing companies fell from $164.18bn in 2008 to $158.87bn in 2009.

Boeing and Air Lease Corporation (ALC) have finalised an order for up to 60 Next-Generation 737-800s worth over $4bn at list prices

The order, first announced at the Farnborough Airshow in July, is for deliveries through 2017. In addition to 54 firm orders the deal includes six additional airplanes to be reconfirmed.

"Our management team has been working closely with Boeing for more than 30 years," said Steven F. Udvar-Hazy, chairman and CEO of Air Lease Corporation. "This order for Next-Generation 737-800s continues that great tradition. With this large and long-term commitment we'll be able to offer our clients a most economical, fuel-efficient and versatile airplane, suitable for a variety of profitable missions."

The International Air Transport Association (IATA) has announced that there was a 6.4% increase in passenger air traffic and a 19.6% increase in cargo air traffic worldwide in August this year.

The IATA said that the August 2010 data is partially distorted by the comparison to August 2009, by which time markets were already expanding rapidly in a post-recession rebound. When adjusted for seasonality, traffic volumes for passenger traffic fell by 1.0% and cargo by .8% compared to July.

“The rapid improvements in demand that we saw earlier this year are behind us. The slow down of demand in August is consistent with our forecast for a tougher end to 2010 as government stimulus monies run out without having generated significant improvements in employment. The bounce from re-stocking is over. We do not yet see the strong consumer confidence needed to sustain the expansion with spending,” said Giovanni Bisignani, IATA’s director general and CEO.

Qatar Aviation Leasing, owned by the Qatar government, has launched syndication of a $650m loan agreed earlier this year in order to reduce the pricing, banking sources close to the deal said.

Qatar Aviation, set up to purchase aircraft and lease them to Qatar Airways, signed a $650m, three-year loan in March with a margin of 250 basis points (bps) over London Interbank Offered Rate (LIBOR) and the new agreement will see pricing halve to 125 bps, the bankers said.

Awas Aviation Capital is planning a $600m private placement of senior secured notes due 2016. Awas will use to the proceeds of the placement to repay existing indebtedness and to finance the purchase of new aircraft for general corporate purposes.

The notes will only be offered to qualified institutional buyers in the US. Active joint-bookrunners include Goldman Sachs and Morgan Stanley with Deutsche Bank acting as a passive bookrunner. Credit Agricole-CIB is co-manager.The bond is rated Ba2 by Moody's and BBB- by Standard & Poors. Earlier this year Awas closed a $530m term loan in the midst of the European debt crisis. Despite market volatility, the lessor was happy with the terms of the deal. Goldman Sachs and Credit Agricole-CIB were joint bookrunners for the transaction.

Donal Boylan chief executive of Odyssey Aviation and chief operating officer of Hong Kong Aviation Capital, fondly recalled his first big break.

“I was a twenty-something trainee engineer working at a GE-equipped power plant outside Muscat, Oman. A plant manager I was friends with, told me that there was another plant close by which had been commissioned some years previously but which GE licensee John Brown engineers had never gotten to work. When my shift was finished each evening I would head up to the plant and potter around to see what the problem was.”

The head of International Lease Finance Corp (ILFC) has said that Airbus and Boeing the world's two largest plane-makers must end a growing pattern of delays.

"We are getting into a pattern that is not sustainable from a company standpoint," Henri Courpron, chief executive of ILFC, said at the Reuters Aerospace and Defence Summit in Washington this week.

Aviation Capital Group (ACG) has appointed John Feren as executive vice president. Feren will oversee ACG’s Global Marketing and Portfolio Management Departments.

He will report to R. Stephen Hannahs, ACG Group Managing Director and Chief Executive Officer, and will be based in the company’s Newport Beach, US headquarters.

The Brazilian airline, Trip Linhas Aéreas will seek funds from Brazil’s national development bank, BNDES, in addition to international leasing companies, in order to add some 10 aircraft to its fleet in 2011, said CEO Jose Mario Caprioli this week.

“We’ll use mostly BNDES for the Embraer aircraft, and we’re studying proposals from two American leasing companies,” Caprioli said in a telephone interview from Campinas, Brazil.

Scandinavian Airlines System (SAS), Denmark-Norway-Sweden, a leading Scandinavian airline company whose chairman is Fritz Schur is to lease eight MD-90-30 aircraft to an undisclosed US operator.

A statement from SAS said the transaction is part of an initiative to reduce the number of aircraft types in its total fleet. The average age of the MD- 90's is 13.5 years.

Greenstone Aviation has appointed Deutsche Capital Securities to raise equity and debt. “Greenstone’s capital raise is going according to plan and we continue to be confident of our target capitalisation levels,” said John Slattery, CEO, Greenstone.
The recently-launched Dublin-based lessor plans to buy young, narrowbody aircraft that are on long-term lease. It will purchase assets through sale/leasebacks or small opportunistic portfolio acquisitions.

Aircraft leasing company International Lease Finance Corporation (ILFC) is negotiating with several national and commercial airlines in a bid to boost its presence in Africa.

"We would love to double our exposure in Africa....in the next five years," said ILFC vice president Ozzie Chraibi at an African aviation conference this week.

Hong Kong Aviation Capital (HKAC), an investor in global aviation finance has announced the appointed Richard Cherney as head of commercial and technical. Richard Cherney has already started with the company and is based at its  Hong Kong office. Cherney is a member of the senior executive committee and responsible for global leasing activities and technical management. He comes to HKAC from his position as executive vice-president of Aviation Capital Group (ACG), a commercial aircraft leasing and asset management company based in California.

Nordic Aviation Capital (NAC), the Danish turboprop lessor, has signed a $200m revolving credit facility with Denmark’s Kirk Aviation. The deal is NAC’s third investment transaction with Kirk Aviation, and builds on a previously existing relationship between the two organisations. The two companies jointly invested in 39 ATR72 aircraft that were leased to American Airlines in 2008.

Martin Møller, NAC’s chairman, says the facility will be used to build a joint portfolio of mainly regional aircraft.

Vedomosti the Customs Union of Russia, Belarus and Kazakhstan has decided to cancel the 20% import duty on planes with 112-159 and 220-299 seats. For planes contracted before 2014, zero import duties will be effective until the end of 2018.

This long-awaited decision means that Russian aircraft producers will be protected from duties, while airlines will get more freedom to upgrade their fleets. The import duties for planes with less than 50 and over 300 seats were previously cancelled.

Mexicana, a troubled Mexican airline is due to return almost 40% of its mainline fleet to lessors under agreements brokered following its bankruptcy last August.

Mexicana will return 12 aircraft to GE Capital Aviation Services, including all 10 of the Airbus A318s currently operated by the carrier. Two A320s also leased by the General Electric division are being returned.

The aircraft leasing group, Avolon has appointed Michael Lillis as chairman of its Latin American Advisory Board. Lillis is a former Irish diplomat and former head of GE Capital Airline Services (GECAS) Latin America and Caribbean business.

Lillis will support the development of Avolon’s Latin American business together with Paul Geaney, Avolon’s head of marketing for the Americas.

There were positive signs for the Latin American and in particular Brazilian aviation industry last week at the Latin American business aviation conference and exhibition.  The event is the second largest of its kind in the aviation world and was held this year at Sao Paulo Brazil. Estimates say that up to 15,000 visitors attended the event which ran from the 12th to the 14th of August.

Overall 150 companies including Embraer, Helibras Gulfstream, Bombardier, Dassaut, Pilatus, Agusta, TAM Executive Aviation and Air Taxi Leader put on exhibitions. And aircraft like the Global 5000 and the Challenger 850, both manufactured by Bombardier were presented.

The Air Lease Corporation (ALC), a leasing company led by Steven F. Udvar-Hazy, have signed a sale and lease-back agreement both with Air Berlin and Air France. The deal with Air Berlin covers five aircraft, one Airbus A320-200, one Airbus A321-200, two Boeing 737-800s and one used A320-200. All aircraft are equipped with CFM engines.

The first delivery was the A320-200 which already took place on May 19, 2010. An A321 and one used A320, were delivered in June 2010. The two Boeing 737-800 aircraft are scheduled for late 2010 and early 2011. 

Dubai Aerospace Enterprise (DAE) has cancelled 18 orders for narrow-body A320 planes and seven orders for A350-900 mid-sized jets from Airbus it was revealed this week. The troubled Dubai based aircraft lessor is also understood to have cancelled orders of some 10 777s and 15 787s with Boeing.

The developments bring to more than $8bn the catalogue value of DAE cancellations, totalling 50 aircraft, as revealed in Airbus and Boeing (BA.N) data published in the past few days.

The last two weeks have confirmed that the aircraft industry will bounce back in 2010 after suffering losses of over €9.4bn last year. Airlines are still wary about buying new planes but they will happily lease them, and aircraft lessors from Los Angeles to Hong Kong are frantically buying up new stock to cater for the demand. For aircraft makers like Boeing and Airbus the 2008 financial crash is starting to seem like ancient history.

At Farnborough air show last week new orders came to almost $30bn and there has been plenty of activity away from the show over the past two weeks as well. Companies like Hong Kong Aviation and the International Lease Finance Corporation have secured big deals.

Polish air carrier EuroLOT, which is owned by the Polish state treasury and LOT Polish Airlines, has signed an agreement with Poland’s Defence Ministry to lease out Embraer 175 aircraft for the use of government members, heads of state and entourage. The agreement is valid until 2013.

Kenya Airways, which is part-owned by Air France-KLM, has taken delivery of two leased Embraer aircraft as part of its efforts to increase flights to key African cities and open up new routes. The two planes, which are being leased from Finnair Oyj for four years at a cost of around $20m, bring the Kenya Airways’s Embraer fleet to five planes.

Russian air carrier Aeroflot has signed a leasing agreement with Rostekhnologii, a Russian government-controlled holding company, in order to guarantee a recent order from Boeing worth up to $2.5bn. Both entities said they would cooperate in the purchase and lease of passenger planes.

Steven Udvar-Hazy, who left International Lease Finance Corporation in February, is seeking capital for a “huge” new aircraft lessor, Air Lease Corporation, that he is setting up with his former colleague John Plueger.

“We’re in a quiet period so I can’t talk, but it won’t be much longer,” the 64-year-old Hungarian-born entrepreneur told Bloomberg News at the sidelines of a conference in New York yesterday. “It’ll be huge,” Udvar-Hazy said when asked how big the company will be.

Planemakers Boeing and Airbus have both enjoyed a strong recovery in orders in the first three months of this year, in stark contrast with the disastrous start to 2009. Boeing netted 83 orders in the first quarter while its European rival Airbus won 60.

A year ago, Boeing was haemorrhaging orders for the 787 Dreamliner and ended the quarter with its net orders down by four. It lost more 787 orders this year, which made up of the bulk of the 17 cancellations it suffered, although it also booked 15 new orders for the 787 Dreamliner.

The world’s second-largest commercial planemaker booked 71 new orders for 737s in the first three months of 2010, with four cancellations. It also suffered three cancellations of 777s.

Irish financier Domhnal Slattery is reportedly selling a joint controlling stake in his new Irish aircraft leasing business, Avolon, to three major private equity groups for $750m. He has secured a further $1bn in debt funding from UBS to finance the start-up.

Canadian airline Jazz Air has signed a flight services agreement with leisure travel group Thomas Cook Canada to operate no less than six Boeing 757-200 aircraft on their behalf to various destinations from Canadian gateways during the winter season (November through April). Subject to Jazz obtaining the required regulatory approvals and the execution of definitive leasing and maintenance agreements with Thomas Cook Airlines, the service will commence in November 2010.

Canadian planemaker Bombardier may be forced to cut more jobs at its Mirabel factory if aircraft sales do not pick up. The aerospace group has been hammered by a slump in demand for aircaft and a flood of used jets onto the market, which has dragged down prices for planes. It booked 213 new orders last year, but also suffered 202 cancellations, leaving a net order intake of just 11 aircraft for the year.

Lease4Less, a UK car, van and fleet hire lessor based in Manchester, is to invest in extra training for its staff to ensure that the highest standards for customer service are met. According to the company, a major factor of its success is its reputation for customer service and the way they deal with clients who are looking to utilise their contract hire services.

John Plueger has become the second chief executive of AIG’s airplane leasing arm to step down in the last two months. His departure triggered speculation that he would join the founder of the business, Steven Udvar-Hazy, in setting up a new aircraft leasing venture.

AIG said International Lease Finance (ILFC) will be run by chief financial officer Alan Lund until a permanent replacement is found.

Plueger, 55, was named acting chief executive in early February when Udvar-Hazy stepped down from the top job.

China Development Bank's leasing arm, one of China’s top leasing companies, has agreed to provide up to $3.85bn of customer financing to Bombardier. With the signing of a memorandum of understanding today, the Canadian planemaker hopes to expand its business in China and the Asia-Pacific region.

CDB Leasing (CLC) will offer pre-delivery payment financing, delivery financing and leasing to customers of Bombardier CSeries, Q400 and CRJ aircraft.

The funding will be available to both Chinese and overseas customers.

“The financial resources of CLC put Bombardier in a stronger competitive position to recommend financing and leasing solutions for potential customers in China and elsewhere,” said Gary R. Scott, president of Bombardier Commercial Aircraft.

Brian Hollnagel, owner, president and CEO of BCI Aircraft Leasing of the US, has been indicted by a federal grand jury on charges relating to a commercial bribery scheme, according to the US Attorney Patrick Fitzgerald’s office. Hollnagel has pleaded not guilty to one count of wire fraud, and was placed in custody but later released after paying a $1.7m bond.

Concerns remain over the health of the aircraft leasing sector, despite many economies coming out of recession and growing confidence in the global capital markets, according to a senior executive at aircraft manufacturer Boeing.

Randy Tinseth, vice-president of marketing at Boeing, said that even though Boeing and Airbus are working on a record number of aircraft orders and increasing production amid signs of a recovery in the global airline industry, there is still continued weakness in the leasing sector, private equity companies and hedge funds, causing concern that they may not be able to meet their financial obligations.

Agricultural Bank of China, one of China’s top four lenders, has secured approval from the China Banking Regulatory Commission to create a leasing firm.

According to Chinese reports, the new firm, with capital of 2 billion yuan, will become a wholly-owned subsidiary of the lender. The firm will specialise in shipbuilding, airplane and large-sized equipment leasing, and cater for its parent company’s customers.

Thai Airways International wants to lease up to four long-range wide-body jets from other Asian airlines after a delay in the delivery of new planes led to a shortfall in aircraft capacity. Thai needs the jets to cope with growing demand for its European routes.

As jet lessors face the worst recession in aviation history Julia Kollewe takes the pulse of the industry

While the first greenshoots are emerging in Europe’s corporate jet leasing market, a recovery is still some way off as many banks remain reluctant to lend and swollen inventories drive aircraft prices lower.

In what is being described as the “worst recession in aviation history”, some lessors have exited the market, notably Royal Bank of Scotland, although its Lombard subsidiary is still active. Icelandic bank Kaupthing collapsed, while Fortis Lease has downsized its business and pulled out of the UK.