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Agenda Overview

Masterclass: Monday, February 26, 2018

8:30AM Registration and morning coffee
8:50AM Chairman's introduction – where are we in the aviation cycle?
9:10AM Presentation: Fundamentals of aircraft valuation
  • Valuation methodologies: depreciation, economic life, residual value and lease rate factor
  • Aircraft supply and demand: are there too many planes in the market? 
  • Maintenance effects and cycle: half-life, full-life and zero-Life
  • Factors affecting aircraft values
  • Secondary market transactions
David Tokoph, Chief Operating Officer, Morten Beyer & Agnew
9:40AM Presentations & panel: Historical data of used aircraft values

Part I: Widebodies

  • A380-800
  • A330-200/300,
  • A340-300/500/600 vs B777- 200ER/300ER
  • A350-900/-1000, B787-8/-9

Part II: Narrowbodies

  • A320 NEOs
  • B737 MAXs

       Part III: Mid-life aircraft – Are they investible? Which used aircraft types offer the best returns, and why?

Thomas Kaplan, Senior Valuations Analyst, Flight Ascend Consultancy
Dick Forsberg, Head of Strategy, Avolon
Bryson Monteleone, ISTAT Certified Senior Appraiser, Tailwind Capital
10:40AM Presentation: Effect of maintenance cost on the residual values
  • Main contributors to maintenance cost: Airframe heavy check, landing gear overhaul, engine, etc.
  • Current maintenance cost by aircraft models: A380, A330-300, A350-900, B777-300ER, B787-8/-9 etc.
  • Key factors affecting maintenance costs
  • Impact of high maintenance costs on residual values
Timothy Scott, Senior Vice President – Technical Services, Avitas
11:20AM Morning break
11:50AM The Airline Analyst presentation: Can LCCs outperform full service carriers?
  • Airline KPIs
  • Financial performance of full service carriers and LCCs
  • Which airlines are the top performers?
Michael Duff, Managing Director, The Airline Analyst
12:20PM Lunch
1:40PM Presentation: Equity performance of airlines vs lessors
  • Historical equity performance of airlines versus lessors
  • Key financial indicators of lessors versus airlines
  • Rating agencies' perspective of public lessors and airlines
  • What are the exit opportunities for new aircraft investors? 
Joseph Shanahan, Managing Director, Global Aviation, Citi
2:10PM Presentation: Shifting from credit-focused to asset-focused lending
  • What are the valuation matrices for an asset-based lender and how do they differ from commercial lenders?
  • What are the market trends in secured and unsecured lending?
  • Common repayment profiles and balloon risks for A321, A330-300 and B777-300ER in the current market conditions 
2:40PM Presentation: The importance of the Cape Town Convention on EETC transactions
  • Structure of EETCs and how to mitigate default risk
  • Relative value proposition: EETC vs treasury notes
  • The importance of the Cape Town Convention
  • Do EETCs fall into Korean investors' risk and return matrix?
Scott Paige, Portfolio Manager, Apollo Aviation Group
3:10PM Presentations: narrowbody portfolio vs single widebody transaction
  • Asset type and size for a single portfolio transaction — What is the right composition?
  • Pros and cons of investing in a narrowbody portfolio vs a standalone widebody transaction
  • Cost efficiency between portfolios and standalone assets: structuring costs and legal costs
  • Maintenance: How to manage a diversified pool of maintenance reserves and costs
  • Remarketing capability 
John Leenane, Head of Trading, CDB Aviation
Andy Mansell, EVP & Chief Commercial Officer, Aviation Capital Group
4:10PM Afternoon break
4:40PM Getting your lease agreement and return conditions right
  • How to make the lease agreement and return conditions right in the first place?
  • Conflicting interest with airlines, lessors and MROs in maintenance reserve management
  • What are the common disputes with lease return condition and possible remedies?
Peter Huijbers, CEO, CALS Aviation Group
5:20PM Aircraft repossession case study

In this session, legal and aircraft remarketing experts will introduce some common disputes in aircraft financing and leasing transactions and use a real business case to help you understand the dispute resolution procedures, enforcement and application of the Cape Town Convention.

As Airfinance Journal has reported, in December 2015 Thai carrier Business Air Centre (BAC) filed for business rehabilitation protection following a dispute with its lessor Global Knafaim Leasing (GKL) for non-payment of lease rentals on a 767-300ER. GKL was able to successfully repossess the aircraft after Thailand’s civil aviation authority deregistered the aircraft without a court order and without the lessee's consent – something unusual for Thailand. Previously a court order or judgement has been required to repossess aircraft in Thailand and in the meantime lessors can lose money because they are unable to retrieve their asset.

This case “marks a shift in thinking” and is “certainly a positive development”, according to John Frangos, a consultant at Tilleke & Gibbins, the firm that acted as GKL’s litigation counsel for this case.

John Frangos, Consultant, Tilleke & Gibbins
Vincent Lam, SVP Asia Pacific – Aircraft Remarketing, Air Partner
6:00PM Chairman’s closing remarks and close of masterclass