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Capital Remains Available, but Financing Has Become More Disciplined

Access to capital has long been one of aviation’s defining strengths, allowing airlines to finance growth through a wide range of structures and funding sources. Yet as the industry emerges from years of disruption, financiers are approaching new opportunities with a renewed emphasis on discipline, flexibility and long-term partnerships.

That was evident throughout ISTAT Asia, held 12-14 May in Bangkok, Thailand, where bankers, lessors and private credit providers agreed that capital remains readily available for aviation investment. The conversation, however, has moved beyond whether financing exists to how it is being deployed in a more complex market.

Relationships Continue to Matter

Participants in the Lessor Finance Panel described a market that remains highly competitive, but one in which experience and relationships play an increasingly important role.

Mamoun Kuzbari, chief operating officer of Novus Aviation Capital; Stephen O’Flanagan, senior vice president of corporate finance at Avolon; and Mui Sin Chan, head of treasury at BOC Aviation discussed a financing landscape supported by diverse sources of capital, including commercial banks, export credit agencies, capital markets and leasing platforms. While funding remains available, panelists noted that lenders are placing greater emphasis on credit quality, transaction structure and long-term customer relationships than they did during previous market cycles.

That theme extended beyond traditional aircraft financing.

During the Private Credit Panel, Sarah Conway, director at Ashland Place Finance; Nelson Lim, principal at Apollo PK Airfinance; Stephen Murphy, CEO of AV AirFinance; and JungWook (James) Sim, managing director and head of mobility investment at Korea Transport Asset Management (KOTAM), discussed the growing role private credit continues to play across the aviation sector. Panelists explained that alternative lenders have expanded their presence by offering customized financing solutions capable of addressing opportunities that may not fit conventional bank lending criteria. Rather than replacing traditional financing, private credit has become another important source of capital for airlines, lessors and investors navigating an increasingly sophisticated marketplace.

Financing Solutions Continue to Evolve

While new sources of capital continue to emerge, participants emphasized that financing structures must evolve alongside changing market conditions.

Aircraft delivery delays, elevated interest rates and ongoing supply chain constraints have created a more dynamic financing environment than existed just a few years ago. Rather than relying on a single funding source, airlines increasingly are combining multiple financing tools throughout an aircraft’s life cycle, from predelivery payment financing and sale-leasebacks to secured debt, capital markets and private credit.

Those changing requirements were echoed during the Asian Banking Panel.

Ryo Hoshino, vice president at Development Bank of Japan Inc.; Jiayun Liang, senior vice president and head of the aviation finance desk APAC for Korea Development Bank; Katlin Liu, vice president at CTBC Bank; and Kevin Whiting, senior vice president at China Construction Bank (Asia) Corporation Limited, described strong demand for aviation financing across Asia despite ongoing economic uncertainty. Panelists acknowledged that higher interest rates, currency volatility and geopolitical considerations require careful underwriting, but they also stressed that aviation remains an attractive sector supported by favorable long-term fundamentals.

Several speakers noted that lenders today are spending more time evaluating management teams, business plans and jurisdictional risks alongside traditional credit metrics. As a result, financing decisions increasingly reflect the quality of the overall transaction rather than simply the underlying aircraft asset.

Confidence Supports Continued Investment

Although financing structures continue to evolve, confidence in aviation’s long-term prospects remains a constant.

That confidence was reflected not only among lenders but also among airline executives discussing their future fleet plans. Throughout the conference, carriers described significant aircraft delivery pipelines and continued investment despite manufacturer delays and geopolitical uncertainty. Those plans depend upon access to a broad range of financing options, reinforcing the importance of a healthy and diversified capital ecosystem.

The value of long-term partnerships also emerged as a recurring theme.

During his Fireside Chat, Chai Eamsiri, CEO of Thai Airways, reflected on the airline’s restructuring and the support it received from financiers and lessors during one of the most challenging periods in its history. He noted that rebuilding the airline required partners willing to take a long-term view rather than focusing solely on short-term market conditions, adding that those relationships continue to support Thai Airways’ next phase of growth.

The discussions throughout ISTAT Asia suggested that aviation finance has entered a more disciplined phase rather than a more constrained one. Capital remains abundant, but lenders are increasingly selective about where and how they deploy it.

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