Paper planes: the financing of aircraft predelivery payments

摘要

There has been a notable upsurge - or, rather, resurge - in commercial aircraft predelivery payment (PDP) financing over the past 12 to 18 months. This is in no small part thanks to the emergence of new PDP financiers, the most notable of which being aircraft lessors. It is also because of billions of dollars of new aircraft orders, representing what is likely now the largest commercial aircraft order book (and PDP bill) in history. Often viewed through the eyes of a financier as riskier in many ways, PDP financing can, if executed right, be less risky than traditional aircraft finance in many other ways. PDP financing is a study in the idea that where there are rewards, there are often risks; and where there are risks, there are often rewards, especially when the risks involved are understood and mitigated. The consideration of select topics concerning PDP financing in this article is not exhaustive - and therefore, hopefully, not exhausting. It is intended to serve as a pathfinder in a market that is in a state of flux, yet relatively mature. This market warrants participation and investment, especially by those who can understand the complicated interrelationships and dynamics between aircraft/engine manufacturers (OEMs), their customers and their customers' PDP financiers. As with any elephant in a room, there is almost no way to get around, over or under an OEM in a PDP financing - nor is it advisable for one to try. Still, to imagine the words of one famed comedian were he to consider the typical dynamic between OEM and PDP financier in relation to complex questions of risk allocation today: whereas an OEM sees a glass as half full, and a PDP financier sees it as half empty, a pragma-tist sees a glass that is already twice as big as it needs to be.