
Aircraft Finance
Strategies for Managing Capital Costs in a Turbulent Industry
By: Bijan Vasigh
Hardcover | 1 July 2012
At a Glance
448 Pages
22.86 x 15.24 x 2.54
Hardcover
$219.40
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Industry Reviews
About the Authors | p. xiii |
Acknowledgments | p. xv |
Foreword | p. xvii |
Preface | p. xix |
Prologue | p. xxiii |
Web Added Valueâ„¢ | p. xiv |
The Globalization and Evolution of the Commercial Aircraft Industry | p. 1 |
Early Contributions to Commercial Aircraft Manufacturing | p. 3 |
Ford Tri-Motor | p. 3 |
Junkers German Transport | p. 4 |
Commercial Aircraft Manufacturing | p. 4 |
North America | p. 5 |
Western Europe Aircraft Companies: Evolution and Constellation | p. 22 |
Russia and Eastern Europe | p. 30 |
Asia | p. 42 |
Regional Jet Markets | p. 44 |
Embraer | p. 45 |
Bombardier Aerospace | p. 48 |
Mitsubishi Aircraft Corporation | p. 51 |
Summary | p. 52 |
References | p. 53 |
Aircraft Variants and Manufacturing Specifications | p. 57 |
Boeing Commercial Aircraft | p. 58 |
Boeing Existing Fleet | p. 59 |
Boeing Retired Fleet | p. 65 |
Airbus Commercial Aircraft | p. 71 |
General Characteristics of the Fleet | p. 73 |
Physical Characteristics of the Fleet | p. 73 |
Operational Characteristics of the Fleet | p. 76 |
Comparative Analysis of the Airbus Aircraft Family | p. 76 |
McDonnell Douglas Commercial Aircraft | p. 78 |
General Characteristics of the Fleet | p. 78 |
Physical Characteristics of the Fleet | p. 80 |
Operational Characteristics of the Fleet | p. 80 |
Comparative Analysis of the McDonnell Douglas Aircraft Family | p. 80 |
Lockheed | p. 83 |
Regional Jets | p. 83 |
Embraer | p. 83 |
Bombardier | p. 87 |
Summary | p. 90 |
References | p. 91 |
Aircraft Efficiency: Operating and Financial Metrics | p. 95 |
Airline Fleet Composition | p. 96 |
Single Factor Ratios | p. 97 |
Aircraft Technical Performance Ratios | p. 99 |
Operating Ratios | p. 102 |
Fuel Efficiency | p. 103 |
Aircraft Utilization | p. 103 |
Average Stage Length | p. 107 |
Financial and Operational Performance | p. 112 |
Aircraft Financial Performance through Financial Ratios Analysis | p. 113 |
Comparative Analysis of Efficiency | p. 118 |
Narrow-body: Boeing 737NG vs. Airbus A320 | p. 119 |
Wide-body: Boeing 777-200 vs. Airbus A330-300 | p. 127 |
Regional Jets: CRJ100/200 vs. ERJ 145 | p. 130 |
Summary | p. 133 |
References | p. 133 |
A Methodology for Aircraft Valuation | p. 135 |
Intricacy and Resourcefulness | p. 136 |
Current Market Practices | p. 140 |
Aircraft and Data Selection | p. 140 |
Boeing Aircraft | p. 141 |
Airbus Aircraft | p. 142 |
Potential Sources of Revenue | p. 142 |
Passenger Revenue | p. 143 |
Cargo Revenue | p. 144 |
Ancillary Revenue | p. 145 |
Aircraft Total Cost Structure | p. 147 |
Total Operating Costs | p. 149 |
Direct Operating Costs | p. 149 |
Indirect Operating Costs | p. 151 |
Non-operating Costs | p. 151 |
Aircraft Valuation Methodology | p. 152 |
Weighted Average Cost of Capital | p. 152 |
Discounted Cash Flow Model | p. 153 |
Summary | p. 155 |
References | p. 155 |
Aircraft Valuation and Sensitivity Analysis | p. 157 |
Value of Physical Assets | p. 158 |
Theoretical Value of Airbus Aircraft | p. 160 |
Theoretical Aircraft Value vs. List Price | p. 160 |
Theoretical Aircraft Valuation Trends | p. 162 |
Aircraft Value Volatilities | p. 164 |
Impact on Theoretical Aircraft Valuation of Input Changes over Lifespan of Aircraft | p. 171 |
Theoretical Value of Boeing Aircraft | p. 173 |
Theoretical Aircraft Value vs. List Price | p. 173 |
Aircraft Value Volatilities | p. 178 |
Theoretical Aircraft Valuation Trend Comparison | p. 180 |
A320-200 vs. 737-700 | p. 180 |
A330-200 vs. 767-400ER | p. 181 |
Elasticity | p. 182 |
Summary | p. 183 |
References | p. 183 |
Appendix to the Chapter | p. 184 |
The Principles of Effective Cost Management and Capital Structure | p. 185 |
Fixed Assets Financing | p. 186 |
Equity Financing | p. 188 |
Common Stock | p. 188 |
Preferred Stock | p. 189 |
Debt Financing | p. 193 |
Bonds | p. 194 |
Yield to Maturity | p. 198 |
Cost of Debt (Bonds) | p. 198 |
Strategic Labor Cost Management13 | p. 199 |
Financial Crew Cost Analysis | p. 200 |
Operational Crew Cost Analysis | p. 201 |
Rules of Thumb | p. 207 |
Summary | p. 210 |
References | p. 211 |
Aircraft Secured Bond Transactions and Securitization | p. 213 |
Aircraft Secured Bond Products | p. 214 |
Asset-backed Securities | p. 217 |
Conventional Equipment Trust Certificates and Pass-through Certificates | p. 220 |
Bankruptcy Protection Issues | p. 221 |
Chapter 11 Reorganization | p. 221 |
Chapter 7 Liquidation | p. 224 |
Aircraft Lease Securitization | p. 225 |
Aircraft Lease Portfolio Securitizations | p. 225 |
Enhanced Equipment Trust Certificates | p. 231 |
Tranching | p. 234 |
Liquidity Facility | p. 235 |
Cross-default | p. 236 |
Ratings Agencies | p. 236 |
Standard & Poor's | p. 236 |
Moody's Investors Service | p. 237 |
Fitch Ratings | p. 238 |
Altman Bankruptcy Index | p. 239 |
Summary | p. 240 |
References | p. 240 |
General Aviation Aircraft and Appraisal | p. 243 |
General Aviation Aircraft | p. 244 |
General Aviation Aircraft Manufacturers | p. 246 |
Appraisal Standards and Requirements | p. 253 |
American Society of Appraisers | p. 254 |
International Society of Transport Aircraft Trading | p. 254 |
Appraisal Company Requirements | p. 255 |
General Aviation vs. Commercial Aviation Appraisal Methods | p. 255 |
Aircraft Bluebook Values | p. 256 |
Scope of Appraisal | p. 258 |
Diminution of Value Assessment | p. 262 |
Diminution of Value Scope of Work | p. 262 |
Fixed-base Operators | p. 264 |
Scope of FBO Appraisals | p. 264 |
Summary | p. 265 |
References | p. 266 |
Aircraft Leasing and Finance | p. 269 |
Commercial Aircraft Leasing | p. 270 |
Characteristics of Aircraft Leasing | p. 274 |
Advantages of Aircraft Leasing | p. 274 |
Disadvantages of Aircraft Leasing | p. 276 |
Classification of Leases | p. 277 |
Operating Lease | p. 277 |
Financial (Capital) Lease | p. 279 |
Cross-border Aircraft Leasing | p. 281 |
Sale and Leaseback | p. 281 |
Dry and Wet Leases | p. 283 |
Financial Considerations for Aircraft Leasing | p. 284 |
Buy vs. Lease Analysis | p. 284 |
Business Jets Market and Fractional Ownership | p. 291 |
Summary | p. 292 |
Appendix: Major Commercial Aircraft Leasing Companies | p. 292 |
General Electric Capital Aviation Services | p. 293 |
International Lease Finance Corporation | p. 293 |
CIT Aerospace | p. 293 |
RBS Aviation Capital | p. 294 |
Babcock & Brown Aircraft Management | p. 294 |
Ansett Worldwide Aviation Services | p. 294 |
Aviation Capital Group Corporation | p. 294 |
Boeing Capital Corporation | p. 295 |
References | p. 296 |
Airline Fleet Selection Process | p. 299 |
Network Planning and Aircraft Selection | p. 300 |
Operating Environment | p. 301 |
Market Forecast and Route Analysis | p. 305 |
Analyzing the Competitive Dynamic | p. 306 |
Choosing an Aircraft Type | p. 310 |
Aircraft Selection Methodology | p. 311 |
Detailed Aircraft Performance | p. 312 |
Cost Efficiency | p. 312 |
Payload vs. Range | p. 320 |
Modeling Techniques and Issues | p. 322 |
Assessing Aircraft Profitability-Cost Components | p. 322 |
Assessing Aircraft Profitability-Revenue Components | p. 326 |
Sensitivity Analysis | p. 327 |
Summary | p. 328 |
References | p. 329 |
Export Credit Agencies and Aircraft Finance | p. 331 |
Background of Aircraft Export Credit Finance | p. 332 |
Export Credit Agencies throughout the World | p. 333 |
Overview of Large Aircraft Sector Understanding Rules | p. 334 |
ECA Finance Supported by the U.S., EU, Brazil, and Canada | p. 335 |
Cape Town Convention | p. 339 |
Overview of UNIDROIT Convention | p. 339 |
ECA Financing and the Cape Town Treaty | p. 340 |
The 2011 Aircraft Sector Understanding | p. 340 |
Export Credit Rules and the New Aircraft Sector Understanding | p. 340 |
Grandfathered Transactions | p. 344 |
Financing Alternatives Utilizing ECA Support | p. 344 |
How Aircraft Financiers Utilize the ECA Guarantee to Lower Borrowing Costs | p. 344 |
Loan and Bond Instruments and Structures | p. 346 |
Summary | p. 349 |
References | p. 350 |
p. 353 | |
Top 20 Commercial Airline Leasing Companies | p. 353 |
Top 4 Commercial Aircraft Manufactuers, 2011 | p. 354 |
Top 20 Airlines, 2011 | p. 354 |
World Airline Vital Statistics, 2011 | p. 355 |
Aircraft Seat Capacity by Manufacturer, 2011 | p. 358 |
Glossary | p. 363 |
Index | p. 371 |
Table of Contents provided by Ingram. All Rights Reserved. |
ISBN: 9781604270716
ISBN-10: 1604270713
Series: J ROSS PRESS
Published: 1st July 2012
Format: Hardcover
Language: English
Number of Pages: 448
Audience: General Adult
Publisher: J Ross Publishing
Country of Publication: US
Dimensions (cm): 22.86 x 15.24 x 2.54
Weight (kg): 0.66
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