Dublin-based aviation-leasing service provider Intertrust Ireland is to administer a new aeroplane-trading scheme in Europe just as the coronavirus is likely to see a rise in aircraft trading.
The new Global Aircraft Trading System (Gats) - established by an industry body representing the major leasing companies - will greatly streamline the buying and selling of aircraft.
It has the potential to help airlines and leasing companies more easily reorganise their fleets as the impacts of the virus pan out in the sector, according to Anne Flood, head of capital markets and aviation at Intertrust Ireland.
With more than 12,000 aircraft owned by the major lessors, and a further 3,526 aircraft on order, Intertrust anticipates a high level of demand for its Gats trustee services once the platform goes live next month. The designation of Intertrust Ireland as a trustee on the new system will further strengthen Ireland's role as a key centre for aviation leasing, said Flood.
Amsterdam-headquartered Intertrust provides international trust and corporate management services and its Dublin office has a substantial aviation leasing focus.
The aviation sector is taking an unprecedented blow from the spread of the virus, with a collapse in bookings, cancelled flights and, since Friday, a ban on travel between much of Europe and the US.
"There is no doubt this is going to have a massive impact on the aviation industry," said Flood. "It is probably too early to say exactly what will happen but, at the end of the day, if airlines are not flying then they are not generating cash."
Bigger airlines are likely to have contingency plans, but it could mean a rise in missed lease rental payments and debt obligations unless deals are worked out, said Flood.
"If there is no certainty over a number of months it is really hard to say what impact that will have on the industry," she said.
"I would imagine there will be a lot of negotiations with the leasing companies and at the end of the day it is in everybody's best interest that airlines can stay afloat."
Intertrust has been authorised by an industry body comprised of the major aircraft leasing companies and service providers, called the Aviation Working Group (AWG), to act as a trustee service provider on the new fully electronic Gats platform. It will greatly simplify the often complicated and document-heavy process of selling aviation assets, said Flood.
When aircraft held in special purpose vehicle type companies by leasing companies are traded - as is happening much more regularly - a huge amount of documentation needs to be amended and this can take months to do manually, according to Flood. "This can be very frustrating for leasing companies looking to buy or sell but also for the airlines whose lease agreement must also be amended. It eats into their time and it can be expensive."
Sunday Indo Business