Unstable economy prompts bidding caution

Source: Flightglobal.com
This story is sourced from Flightglobal.com

Robust competition for new and middle-age assets is helping to keep the price of assets high, but not all players are willingly to pay frothy figures in a less than stable economic environment.

"We are exercising a lot of discipline when we bid on assets, unlike our competitors, as we don't know if we are heading into another recession," says a lessor. "At Chi-Stat this year, we spoke with airlines that are deferring maintenance, as all of their assets are encumbered. They are trying to put off their problems until 2012, but that is when austerity cuts will really start to bite the average person on the street".

The lessor describes prices on new and 10-year old assets as "very strong".

On the bright side, he says, 2012 could see capacity pulled in response to a weakening economy, which could "put a lot of these overpriced assets on the ground, creating an ideal time to buy aircraft."