Oasis Leasing says open skies set to fuel Mid East aircraft leasing sector

Speaking at the 3rd Annual Middle East Aviation Finance Conference, Erik Dahmen, Commercial Director of Oasis International Leasing Company - the Abu Dhabi-based big ticket leasing company - said leasing will have a vital role to play in the future financing of the region's airline fleets.

'Although the number of aircraft on operating leases lags behind the global market, the growth potential is enormous. Boeing has estimated the Middle East will need 640 aircraft worth around US $ 63 billion within the next 20 years,' said Dahmen.

'Leasing will enable airlines to manage constrained capital budgets by relieving them of the huge financial burden associated with owning aircraft.'

Oasis Leasing believes the regional market has largely recovered from the repercussions of the events of September 11 last year. Meanwhile, industry analysts predict, more liberal, open skies policies will increase aircraft purchases.

'This represents a significant opportunity for a company, such as Oasis Leasing, as airlines seek new financing methods and a means of diversifying access to capital,' Dahmen said.

The worldwide leasing industry has increased from US$ 40 billion to US $500bn in 20 years, demonstrating strong 6% annual growth, according to Dahmen. Today almost one third of leasing transactions are in the transport sector.

'In the Middle East asset leasing remains an under utilised finance option, accounting for just 10% of the worldwide market,' Dahmen told the conference, held at Le Meridien Dubai Hotel.

'However, regional constraints on leasing are falling away. Governments, that have traditionally owned, controlled and funded strategic industries, such as utilities, shipping companies and airlines, are increasingly seeking to more actively manage their balance sheets.'

In addition to increasing its portfolio of aircraft, Oasis Leasing plans to target the Middle East's infrastructure, shipping and power generation sectors for future growth.

'Privatisation has re-emerged as a key issue. Gulf governments are encouraging private sector support for the development of new and existing businesses. Leasing has an important role to play in that process,' said Dahmen.

Oasis Leasing has announced three aircraft transactions in recent weeks. In partnership with Compass Capital Corporation in the US, Oasis Leasing has financed the acquisition of an MD82 aircraft on lease to Continental Airlines. It has also signed contracts, with Air Canada, for the purchase and long term leaseback of two Bombardier CRJ-100ER aircraft and the acquisition of a new Airbus 321 passenger jet, on lease to Canada's flagship airline for 10 years.

Earlier, in the year Oasis Leasing unveiled a solid set of financial results for the first half of 2002. Figures released by the company showed that its Risk Adjusted Lease Book (RALB) - the present value of contracted future lease revenues - rose by AED 33 million to AED 828m in the first six months of the year, an increase of 58% since the company began reporting in 1998. Revenue amounted to AED 97.221m and net profit was AED 5.635m.