Thursday, 30 June 2011

Santander looks East as demand for Spanish operating leases grows

Santander, the only bank currently arranging Spanish Operating Leases (SOLs), has told Aviation Exchange it is pitching to potential clients in the Middle East and Asia as it witnesses growing demand for the tax leases. The structures, originally developed by Caja Madrid, allow lessees to receive tax benefits through accelerated depreciation and have previously only been closed in Latin America and Europe.

Spanish flag carrier Iberia secured the first ever aviation SOL in September 2005 after going on the hunt for alternatives to Japanese Operating Leases (JOLs). Caja Madrid provided 21% equity while RBS financed 79% debt, delivering savings of 6.5% through a reduced rental stream on two Airbus A340s.

The JOLs previously favoured by Iberia tended to deliver larger savings, but according to Gregorio Herrera, Santander Global Banking & Markets, Europe, there are several additional benefits entailed within SOL structures.

Tuesday, 7 June 2011

Flying Through EU Skies? Then Expect to Play by EU Rules

Full article on

America's airlines are at it again. Barely a year after quashing European efforts to reform the transatlantic Open Skies treaty -- a lop-sided agreement which gives U.S. carriers unfettered access to Europe, while barring our airlines from operating domestic flights in the U.S. -- America is now bellyaching about EU efforts to curb global warming.

When Phase II of the EU's Emissions Trading Scheme (ETS) comes into force next year, it will at long last hold the aviation sector accountable for its CO2 emissions. The scheme has gradually been rolled out across Europe since 2005, allocating carbon permits to large companies and forcing them to purchase extra credits if they exceed their allowance. By attaching a financial incentive to energy efficiency, the ETS is estimated to have delivered annual emissions reductions of 2.5 to 5 percent since its launch...

Wednesday, 1 June 2011

Interview: James Hogan, Etihad CEO

Full article in JPG format: page 32/33 & page 34

To most casual observers, the challenges faced by Etihad chief executive James Hogan during 2011 would appear quite exceptional. In the space of a few short months the Abu Dhabi-based carrier – still only seven years old – has been forced to contend with a dramatic oil price rise, civil unrest on its doorstep, and a combined tsunami-cum-nuclear crisis which sent shockwaves around the globe.

But for a man whose résumé includes breakneck expansion in the face of countless prior crises – including the SARS pandemic, the global financial crisis, and aviation-related terrorism, to name just three – the turbulence of the past few months is nothing out of the ordinary.

Hogan was drafted in to head up Etihad in 2006, having served prior senior management stints at Bahrain’s national carrier Gulf Air and the UK airline, bmi. With more than 35 years of industry experience to his name, the Australian native understands the cyclical nature of aviation better than most. His business model is the stuff of nightmares for Etihad’s legacy rivals...

FlyDubai eyeing new horizons

Full article in JPG format

When FlyDubai began operations in June 2009, chief executive Ghaith al Ghaith said he was bringing a "low-cost alternative" to residents of the Middle East. His choice of words might seem clichéd to European travellers, who have long been accustomed to the cut-throat, no-frills model pioneered by Ryanair. But in the Gulf, low-cost air travel has always been a notoriously elusive creature.

Take Air Arabia, the region’s first low-cost carrier (LCC), which took to the skies in 2003. Despite being in the business of no-frills travel, its passengers can check in a bag weighing up to 30 kilos free of charge – generosity which is quite literally unheard of in western no-frills markets. In Europe, hapless travellers who turn up to the airport with the same piece of luggage face fees of up to EUR 250 ($350)...