Rising interest rates, supply chain challenges and wars in Europe and the Middle East have created a turbulent time for the global economy. What has this meant for aviation finance? Gerrard Cowan learns what the industry experts are expecting in 2024...
According to Brian Macbean, AOPA Aviation Finance’s Director of Credit and Sales, while the aircraft market is subject to macroeconomic conditions there is often a lag between changes in other markets and the aviation sector.
“If things are steady on a macro level, the aircraft market will likely follow the same path,” he says. “If we see drastic changes in other major asset values (real estate, for example) which are sustained over time, we can expect to see changes filter into the aircraft market as well.
“Keeping an eye on the economy as a whole will give aircraft buyers an indication of what to expect in the aircraft market in the coming months.”
A Reasonable Baseline for 2024 Expectations...
The main trend of 2023 was a general slowing of the market, Macbean says, primarily as a response to anticipated moves by the US Federal Reserve.
“The cost of funds for lenders increased in 2023, and there may continue to be a slight increase into early 2024. That being said, the expectation is that costs will not rise as quickly, or comparatively as high as they did in 2023 – so the current market condition is a reasonable baseline for 2024 expectations.”
This article was originally published by AvBuyer on December 11, 2023.
