New lease of life
With the impending arrival of the Boeing 787 and Airbus A380 likely to establish large bodied freighters as the industry norm, Ron Anderson, CEO of Intrepid Aviation, explains why now is the time for Middle East companies to lease medium wide bodied aircrafts.
What unique leasing options does Intrepid Aviation offer the airfreight sector in the Middle East?
Intrepid is a freighter aircraft leasing specialist. Our management possess decade's worth of experience in the airfreight business and have developed a unique understanding of the operational requirements of various types of freighter airlines and forwarders. We offer airlines dry lease options for freighter aircrafts and wet lease options with strategic partners. Intrepid also provides sale-leasebacks for freighter aircraft and passenger aircraft that are potential freighter conversion candidates. We largely focus on medium wide bodied aircraft, such as the Airbus A300, A330 and A340, as well as the Boeing 767 and 777.
What are the advantages of leasing medium wide bodied freighter aircrafts such as the A330-200?
The leasing market for medium wide bodied freighters is currently very tight. Historically, 75% of the world's freighter aircraft derive from converted passenger aircraft. With the demand for passenger aircraft at an all time high combined with the market arrival delays of the Airbus A380, A350XWB and Boeing 787 there will be little if any, medium wide bodied aircraft available for conversion. We receive many requests for A300-600s and B767-300ERs, but the current owners and operators of these aircraft are reluctant to let them go. Therefore we see demand for medium wide bodies growing as freight carriers struggle with the requirement for more long range aircraft and rising fuel prices.
Why should freighter airlines lease aircraft as opposed to purchase?
Leasing aircraft allows an airline to focus on the capital resources of its operation rather than just focus on the aircraft. Leasing companies are generally able to draw on a broader capital pool than airlines, which benefits an airline in a lower equipment cost solution. Leasing also frees the airline from the residual value risk of owning the aircraft. It eradicates concerns of future reselling of an aircraft once a company no longer requires it.
How strong do you view the leasing and finance market for the airfreight sector in the Middle East?
With it's ideal geographic location and rapidly developing infrastructure, we think the Middle East will continue it's strong growth in freight traffic. According to IATA statistics for the Middle East airfreight sector, there was a 9% increase in FTK's for October 2007 in comparison to October 2006.
We expect this type of growth to continue. The airport infrastructure is like no other in the world.
How do you intend to establish Intrepid Aviation's name and business in the Middle East?
We are currently busy helping companies in the region appreciate the operational capabilities that the A330 freighter will bring to the marketplace. There is a growing awareness that this is a unique new aircraft that will allow carriers to offer direct services, higher frequencies and optimise long haul operations in ways not possible until now. We are in discussions with Middle Eastern carriers that operate older equipment such as the A300, as well as operators of 747s and A330 passenger aircraft. We will also be looking to purchase medium wide bodied passenger aircraft from Middle Eastern carriers as they make the transition towards implementing 787s and A350s.
What are your future predictions for the Middle East airfreight market and how dominant will leasing become?
We see the medium wide bodied freighters growing in popularity in the Middle East. There will be a number of 747 and 777 freighters coming into the market with local operators, as well as operators based outside the Middle East, but aircraft this large are not always the best solution for all market segments.
We believe there is an interesting parallel in Asia where A300-600RFs have gradually found their way into the region, with daily A300 services replacing every second or third day 747 services. One of the only sources for additional capacity will therefore be from leasing companies with the A330 freighter.