Oasis Leasing reports signs of recovery in airline industry

Speaking at the Middle East and North Africa Airfinance Conference in Dubai, Oasis Leasing's Commercial Director, Erik Dahmen, told delegates the company was seeing more opportunities to bid on transactions for major airlines, indicating increased demand for leasing as a finance solution. Airlines world-wide are seeking to finance existing orders through leasing or free up cash invested in their existing fleet.

"Although market values are under pressure they are stabalising. After three difficult years the long term trend is up and airline manufacturers are bullish in their forecasts, especially for Middle East markets," said Dahmen. He added, however, the availability of a large number of aircraft is an obstacle to a quick recovery.

"Leasing is becoming an increasingly popular finance option in the region. Companies, like Oasis Leasing, provide airlines with a 'One Stop Finance Shop', and operating leasing will undoubtedly be an important source of capital in the future. For some airlines, start-ups for example, leasing is the only realistic means to finance their fleets."

Dahmen said although uncertainties remain he is optimistic about a steady recovery in the global aviation industry. This is a view supported by an International Civil Aviation Organisation (ICAO) forecast that world airline passenger traffic will grow by 4.4% next year, followed by 6.3% in 2005.

"Middle East traffic has held up relatively well and there is every reason to be positive about future growth prospects. Several start up operations have been announced and Iraq has the potential to be a significant new market," Dahmen said.

"Oasis Leasing also sees a bright future for intra regional traffic and the possible introduction of smaller jets in the Gulf region.

"Elsewhere SARS has been contained quickly and airline stocks are up. July and August saw improving yields and traffic, especially in Asia, with a number of airlines reporting record load factors."

Dahmen told the conference, held at Dubai's Jumeirah Beach hotel, the success of low-cost airlines in Europe and the emergence of similar airlines in the Middle East and Asia are driving increased demand for newer and smaller aircraft and providing attractive acquisition opportunities for leasing companies.

"In the longer term, reorganisation and new finance strategies, put in place by several of the world's major airlines, will further stimulate demand for operating leases. Oasis Leasing is well placed to take advantage of the resulting business opportunities," Dahmen added.