Operating lessor AWAS will see its leverage ratio hit "2 times before coming back down" in 2015, according to its chief executive officer.
AWAS has a current leverage ratio of 1.7-1.8 times.
Expenditures for the next couple of years should remain low as the lessor plans on "keeping its powder dry and focusing on sale and leasebacks," says AWAS' Ray Sisson in an interview.
"We don't see additional, near-term manufacturer orders because there is little to no slot scarcity with order books full until 2018-19 combined with the negative impact of planned production increases," he says.
Also, by focusing on the secondary aircraft market, AWAS is free of "price escalation and the drag on returns of pre-delivery payments".
Sisson believes "newer lessors" could struggle in the current financial markets "as they have similar business models, offering only new and mostly narrowbodies", versus AWAS' broader array of "solutions".
"We would rather offer our customers more options to better meet their needs...AWAS' strategy is differentiated and we purposefully avoid market spaces we deem to be overcrowded," he says.
Sisson says AWAS is in a "fortunate situation" with a "very strong" equity position. "Even if we were to desire more equity, we have the capability to source it and then back lever."
The Dublin-based lessor currently has a 240-aircraft portfolio with 80 forward orders. Deliveries are scheduled during the next three years.
The forward orders will take AWAS to over $10 billion worth of assets by 2015.