Turkey's airlines are widely predicted to fund new deliveries through leasing deals after the failed military coup in the country earlier this year made banks wary of lending to them – but a lessor has warned that carriers will have to revise their expectations as to the deal terms they can achieve.
Speaking at the Airline Economics Growth Frontiers conference in Dubai today, Novus Aviation Capital's managing director Hani Kuzbari identified a mismatch between what airlines want and "where the market is", as well as uncertainty surrounding lease rates.
Kuzbari adds that Novus does see opportunity in Turkey, and has been "fact finding" about the market.
FlightGlobal understands that, given the market backdrop, lessors generally may look to extract favourable lease rates from the country's airlines, despite being more focused on asset risk rather than credit, unlike banks.
Firstly, Turkey's airlines are operating amid an uncertain political backdrop that has discouraged commercial lenders, meaning lessors essentially have a captive customer base at the moment. Secondly, a number of lessors are saying that lease rates across the market are depressed.
For example, rumours suggest that the lease rate factor has dipped as low as 0.55 for one recent Airbus narrowbody transaction.
Flag carrier Turkish Airlines held meetings with lessors in September over its 2017 deliveries, as other forms of financing options such as JOLCOs had proved difficult to arrange, FlightGlobal understands.
The airline has issued a request for proposals covering four Airbus A321neos, one A321, one A330 and three Boeing 777s set to be delivered next year.
Source: Cirium Dashboard
