The aircraft trading market is currently “red hot”, observes DAE Capital chief executive Firoz Tarapore.
Speaking during an analyst call on 4 August, Tarapore said that the Middle Eastern lessor had met with a “very robust” trading environment after agreeing the sale of nine aircraft earlier this year.
“The bids are there, the prices are there and I think it was a good thing for us to go into the transactions that we did to make sure there is the right balancing of our portfolio,” he says.
Tarapore notes that three of the sales closed in the second quarter, with the rest due to complete in the third quarter.
While people are still testing what the appetite is like for equity notes in relation to the asset-backed securities market, there is “adequate liquidity”, and a “high degree of comfort” as to aircraft types will be valued, looking forward, he adds.
Airlines that have been able to distinguish themselves during the pandemic are the credits that people are willing to back and this creates the conditions for DAE to achieve a “decent price and very high degree of executional certainty,” Tarapore notes.
He says that the Dubai-based lessor does not expect to conclude further aircraft trading for the rest of the year.
Turning to the direct order DAE has placed for 15 737 Max 8 aircraft with Boeing, Tarapore says that the lessor is in advanced discussions to place these units and adds that he wished it had access to “many more of those assets”.