Dublin got its annual influx of aircraft financiers late last month when the community gathered for conference season in the Irish capital.

Whispers in the corridors suggested a conflicted picture for the sector.

While the tone of industry meetings has been described as "cautiously optimistic" for at least a couple of years, many are increasingly worried about what a downturn may look like, with one financier telling FlightGlobal that it's starting to look "subprime-ish".

For now, global GDP is increasing and aircraft are getting financed, as capital is abundant. So the party continues – but many think it has reached its peak.

In the view of several lessors with whom FlightGlobal spoke throughout the week in Dublin, lease-rate factors are just too low to agree sensible sale-and-leasebacks, while operating leases remains crushingly competitive. Many are taking a pass on sale-and-leasebacks in favour of renewing business with existing customers or taking advantage of the prevalent exuberance by selling aircraft to those looking to grow.

One aircraft leasing chief executive says it is impossible to make the economics work for a deal with a lease rate factor below 0.6. As a result, it's been hard to find deals that make sense for his company, amid lease-rate compression.

At least three of the top five lessors shrank their total fleets from 2016 to 2017, Flight Fleets Analyzer indicates. GECAS, AerCap and SMBC Aviation Capital were all net sellers in 2017, which suggests that trading remains active and that there were better selling opportunities than buying ones in 2017.

In 2017, six of the top 20 lessors by aircraft value were net sellers, compared with only two in 2016.

Lessors like GECAS and AerCap are taking advantage of the frothy market to tidy up their portfolios. Even the CDB Aviation Lease Finance chief executive Peter Chang told FlightGlobal in Dublin that his company would take the opportunity to sell around 50 aircraft in 2018.

AerCap chief executive Aengus Kelly said during an earnings call in November: "We continue to be active sellers of mid-life aircraft." While the company has sought to reduce the portfolio's average age, Kelly says AerCap has been able to book considerable gains from selling these assets.

"We will start to grow again next year, so in 2018 we will be start to be a net grower, we expect," he said on the same call.

Castlelake and Apollo Aviation Group are the best examples of private mid-life lessors adding more than 20 aircraft in 2016. Both companies have issued multiple aircraft ABS deals since 2014.

And, with a new mid-life lessor issuing an inaugural securitisation every six months, there is no shortage of buyers for such aircraft. And given the appetite of investors searching for yield, the cycle perpetuates.

On the other hand, the surge of Chinese capital shows no sign of slowing. Five of the six top purchasers of aircraft from the top 20 lessors by portfolio value in 2017 have Chinese parents.

Flight Fleets Analyzer shows that the top buyers – those purchasing 25 or more aircraft – are all Asian-owned lessors: Avolon, BOC Aviation, BoCom Leasing, CDB Aircraft Lease Finance, ICBC Leasing, and Orix, which is Japanese-owned. (This analysis excludes regional jet lessor Nordic Aviation Capital.)

The picture suggests that the experienced lessors are calling the top, while Asian lessors may be highlighting a changing of the guard.

We will only be able to call the peak in hindsight. In the meantime, some trepidation may be advisable. To quote Metallica: "The higher you are, the farther you fall."

Source: Cirium Dashboard