So what is really of interest at the Farnborough airshow this year?
We have seen freighter orders today, which was expected, the airfreight market has been consistently strengthening for some time. But, what is really of interest is the Jackson Square Aviation (JSA) aircraft order (see Americas Leasing section below). JSA is specialist lessor in the sale and leaseback (SLB) market, which has for at least five to eight years been a heated market where airlines have dictated rates because they have been offered very keenly-priced deals from a myriad of sources. One good example is a Middle East major some four years ago receiving RFPs back from no less that 36 lessors on a relatively small deal at prices that pushed the usual go-to lessor of choice down to 33rd in the pile. Indeed at that time the lessor in question had already gone as low as they could.
So for a number of years we have all been wondering what the future holds for SLB specialist lessors who just could not get the right aircraft at the right price even though they are competing day in and day out. The advice three years ago was to sit tight, hold on to cash reserves and deploy the same on building-up new aircraft orders. So it has come to pass that JSA has today confirmed a significant aircraft order with Boeing for 737 Max aircraft – the aircraft of choice for the vast majority of its existing client base.
Make no mistake this is a significant order, the first new aircraft order for JSA direct from the manufacturer. The company was forced into it by market conditions no doubt, but the team has had the courage to hold out, stick to their guns on pricing for many years and make a move when the timing is right for them into the new aircraft market so clients can continue to be serviced, even though they had the financial backing all along to make an order or indeed cut their prices long ago. Prudence will yet reap long term rewards for Jackson Square Aviation. The question is will going out on a limb and winning a deal at all costs work out for others in the long term? Only time will tell.