DAE to keep head low in 2010
Dubai, November 16, 2009
Dubai aviation leasing firm DAE Capital, which has about $27 billion worth of aircraft orders from Airbus and Boeing, said it will wait until mid-2010 for rates to recover before marketing its aircraft.
DAE chief executive Robert Genise said leasing rates dropped as much as 25 percent in the wake of last year's financial crisis before bottoming in March and April.
The market was now witnessing a bounce back of about 10 percent but obtaining financing is still a challenge, he said on Sunday.
'Given what is happening in the market place... raising financing is difficult,' he told reporters at the Dubai Airshow.
'(Next year) will continue to be a challenging market for the airline industry and so you need to keep your head down as a leasing firm.'
State-owned Dubai Aerospace Enterprise agreed earlier on Sunday to buy $340 million worth of engines from International Aero Engines, a consortium led by Rolls-Royce and Pratt & Whitney, to power 20 A320 Airbus planes.
The deal was a far cry from the 2007 Dubai Airshow when the leasing firm made headlines with its 70-aircraft order as it looked to become a major international player.
Genise said he expected the firm to place the 20 A320s, part of that 2007 order, but it did not see the economy recovering until 2011 or 2012.
'As the markets turn with the global economy... 2013/14 in our view will have strong market conditions and airlines who slowed down their deliveries... will look for equipment and we will have it,' Genise said.
He said DAE was still committed to its orders and had its 37 aircraft currently leased.
'We had to repossess three, but have placed them,' he said. 'All aircraft are leased and the lessors are paying.'
DAE will add six more aircraft to its fleet next year, but most of its deliveries are slated for 2013 and 2014.
Genise ruled out acquisitions, citing the financial markets conditions and unattractive valuations for sellers. 'It's very different for sellers to find values when buyers are looking for very cheap prices,' he said. - Reuters