Q&A With Olivier Trauchessec of MUFG
With nearly 30 years in aviation finance, Olivier Trauchessec, managing director and head of global aviation, has helped build MUFG’s reputation for trust, innovation and resilience. He discusses how the bank’s entrepreneurial culture and global reach continue to shape its client partnerships.
Jetrader: You’ve been with MUFG since 2016 and now lead its global aviation practice. What have been the biggest milestones in that transition from BNP Paribas, where you spent 16 years, to MUFG?
Olivier Trauchessec (OT): When I joined MUFG in 2016, the objective was to position MUFG as a leading financial institution in aviation. After almost 10 years with MUFG, I think we can be very proud of what we have achieved collectively: MUFG is a leading capital markets franchise in aviation with a No. 1 position in terms of issuance; we offer tailor-made specialty lending solutions; and we can implement the whole spectrum of aviation products.
The commitment of the bank to the aviation sector is strong and steadfast: Every year, we start the relationship with new clients, and we add new products and new assets to our offering.
The acquisition of DVB was a transformational project for MUFG, which brought in unique capabilities in terms of aviation research, asset management and advisory. Over the years, we have continued to build the business by hiring top-notch bankers, best-in-class capital markets specialists and technical experts who can offer best-in-class solutions to our clients. MUFG is uniquely positioned in the market, and we have unmatched capabilities to serve our clients.
Jetrader: Looking back at when you created the aviation desk for the Americas in 2000, what lessons from that experience still shape how you approach aviation finance today?
OT: I think that to be a leading player in aviation, you need to build unique structuring and distribution capabilities to match the needs of your clients. If you want to create value for your client, you need to be ready to support them with their most complex issues. There is nothing easy that creates value. I want to stress the importance of long term relationships. MUFG as an institution is a relationship bank.
Each team member of the MUFG aviation group is deeply focused on personal relationships. We concentrate on understanding the needs of our clients and on helping them grow their business over the years. We are deal-makers, but what counts at the end of the day is client satisfaction and building mutually satisfactory relationships.
MUFG is a bank that gives its employees the opportunity to be very entrepreneurial, to come up with new ideas, new ways of supporting their clients and to adapt to current market conditions. It is also a bank with a very strong culture based on trust, respect, very high ethical standards and team spirit. As such, it is very conducive to building tailor-made solutions for its clients.
Jetrader: MUFG is one of the largest financial institutions in the world. What distinguishes its approach to aviation finance from other banks?
OT: We want to be the first call for our clients. We want them to reach out to us with their more challenging issues. We always ask our clients, “What keeps you up at night?” We want to be there when they need us the most in good times and in bad times. We have the capabilities to support clients when they start a new business, when they are transforming their company, when they decide to do a very large acquisition or when they are considering a transformational project.
We have helped many clients as a startup, and to this day, they are grateful for our support when they were creating their new venture. We have had clients coming to us to support them during a broad range of situations: cargo conversion facilities where we financed aircraft before, during and post-conversion; facilities for fleets of off-lease aircraft; financing of aircraft at the end of their life; and then transition to engine leasing, to give a few examples.
During the COVID-19 pandemic, we deployed close to US$4 billion of capital to support aviation clients. We know that there will be another crisis in aviation in the future, and we have built a strong franchise that is ready to support our clients.
Jetrader: Where does aviation fit within MUFG’s broader strategy, and how do you see that role evolving over the next five years?
OT: Aviation is one of the three pillars of growth for MUFG, with project finance and securitization. As such, there is a very strong focus by senior management to execute on the strategy by supporting the business by meeting clients and getting involved in important projects.
We are building a sustainable business to be a trustworthy financial institution in aviation finance for the very long term.
Over the next five years, the strategy is to continue to grow by starting relationships with new clients, by offering innovative structures to our clients and by supporting the financing of new assets. We want to be viewed as a reliable partner for our clients — a financial institution that can take them to the next level.
Jetrader: What trends are you seeing in financing demand from airlines versus lessors today?
OT: Airlines operate in a very competitive environment. As such, their main focus is to have access to competitive financing. They may also be interested in tapping a new source of financing or by new types of structures to help with their capital structures.
Aircraft lessors are focused on working with financing partners who can offer tailor-made solutions that match their needs and requirements. They are also interested in competitive financing solutions, but they may be more focused on advance rate, balloons or amortizations. There is also strong appetite from the aircraft lessors’ source to the capital markets through bond insurance, asset-backed securities (ABS) solutions or private placements.
In all circumstances, MUFG always makes sure that we offer the right solution for our clients to help them achieve their needs, and not to promote the products that are most favorable to the bank.
All clients are focused on great execution. They want certainty of execution, and they want to make sure that the process is smooth and efficient. With MUFG, they know that they are working with the right partner who can deliver.
Jetrader: The industry is still navigating high interest rates, supply chain constraints and geopolitical uncertainty. How are these dynamics influencing financing structures and access to capital?
OT: In spite of the current uncertainties, aviation clients continue to be very attractive for investors, and we are continuing to see new investors coming into the space. People have come to realize that the aviation sector is a very resilient industry. The best demonstration was during COVID, where governments provided strong support to the airlines in most regions.
Airlines are a key part of the infrastructure of a country. Just like a country needs highways, a country needs an airline to bring people in and out of the country and to move goods. Similarly, the capital markets remained open during COVID and provided very strong support to the airlines and to aircraft lessors. Over the years, we have not seen long periods of time when capital markets were not open to the aviation industry. Banks like MUFG are there to bridge periods of uncertainty and support clients in the meantime.
There is also strong growth in the sector for aviation investors. With significant needs in terms of new aircraft deliveries, but also renewal of existing fleet, it makes the aviation sector very appealing for investors who want to deploy capital in a resilient and growing industry.
Jetrader: With record aircraft orderbooks and OEM delivery challenges, what financing innovations or structures do you expect will gain traction?
OT: I do not believe that there is a risk of a funding gap in aviation. The market has adapted very well over the years with new structures, such as private placement, private insurance solutions and new forms of capital markets issuance.
We are spending a lot of time reaching out to new investors to educate them on aviation. We are focusing on all regions, and we believe that a combination of local investors and international capital market investors will provide the required capital needs for airlines and aircraft lessors.
Every year, we organize an MUFG aviation conference during the Paris and London air shows, where we invite all our clients and aviation investors, and the conference has grown every year with close to 500 attendees and more investors showing appetite in the space.
Jetrader: Sustainability-linked financing has been gaining momentum. How do you see ESG considerations shaping aviation lending and investment in the near term?
OT: Like any trend, the focus on sustainability has seen periods of intense focus and de-emphasis.
For the time being, carbon emissions from aviation make up only a small percentage of total emissions. But as other industries are decarbonizing, the aviation industry is going to become more prominent.
It is key for each stakeholder to do their share and to contribute to the efforts. Otherwise, there may be government mandates that may be more painful for the industry as a whole. MUFG continues to be focused on achieving its sustainability goals, and we will continue to pursue our strategy accordingly.
Jetrader: Are there regional differences in how airlines and lessors are approaching financing today — for example, between the Americas, Europe and Asia-Pacific?
OT: Aviation finance is a global industry. We observe similar trends and approaches between aircraft lessors, aviation investors and airlines around the world.
That being said, we also see differences between regions. For example, airline companies in the APAC region are very focused on achieving very competitive financing, and they benefit from the support of the strong network of local financial institutions.
Airlines in North America benefit from strong access to capital markets with competitive structures such as EETC and loyalty program financing. The U.S. capital markets are the deepest and most competitive markets for U.S. dollar funding, and we expect to see close to US$1.5 trillion of issuance in 2026 across the high-grade and high-yield markets.
The common trend that we see throughout the world is that old clients are very focused on building a strong group of relationship banks and investors whom they can rely on for the very long term. MUFG is viewed as a core relationship bank by its clients, and we want to continue to be positioned as such with them.
Jetrader: What excites you most about working in aviation finance at this stage of your career?
OT: I have been working in aviation finance all my career. It amazes me to see that every new transaction is so unique. Each client comes with specific requirements, has their own needs and objectives, and we always need to be creative and adaptable to help them meet their goals. We want MUFG to be viewed in the market as a constructive bank that makes every effort to support its clients and help them grow their business.
I come to the office every day, and I find myself being intellectually challenged. I like how the industry keeps evolving and adapting to new challenges.
More importantly, I really like the fact that people stay in the industry for a very long time, often for their whole career, and you have the opportunity to build special relationships with bright people and to cultivate friendships that last a lifetime.
Jetrader: For younger professionals entering aviation finance, what skills or experiences do you think will be most valuable over the next decade?
OT: I think that it is important for a young professional to build a strong reputation both with clients and internally with their colleagues. You need to be viewed as a reliable partner. It is important to be viewed as a trustworthy partner whom people can call and ask for help.
Another important factor is the quality of work-life. We spend so much time at work; it is important to enjoy yourself, be intellectually challenged and build strong connections with a good group of clients and colleagues who may eventually become friends.
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