Lessors in the time of
Covid — August 2020

The Covid-19 shock should be immense for the operating lessors, partly because, unlike the manufacturers, airlines and airports, they have no plausible case for state aid. They have expanded consistently over the past 25 years, navigated September 11 and the Global Financial Crash with minimum casualties, while pulling in capital from Japan and China. The last major crisis was back in 1992, when the Irish mega-lessor GPA imploded, which is outside the experience of the large majority of leasing executives, even if most are located in Dublin.

It might be worth recalling that investors lost faith in GPA because it had over-expanded, it was over-enthusiastic about residual values, to the extent that it seemed to argue that aircraft did not depreciate in real terms, and it was over-confident about the resilience of airlines in a downturn. There might be some lessons for today’s myriad leasing companies.