RBS Aviation sees emerging market growth

FARNBOROUGH, England (BestGrowthStock) – The head of RBS Aviation Capital, one of the world’s largest aircraft leasing firms, said a major plane order unveiled on Wednesday pointed to growth in emerging markets and said liquidity was improving. He was speaking after RBS confirmed it had placed an order worth over $7.6 billion at list prices for 52 Airbus (EAD.PA: ) A320 family aircraft and 43 Boeing (BA.N: ) 737 family aircraft.

“It reflects the underlying and long-term trend that there is demand for leased airplanes, particularly for the narrow-body workhorses of the industry,” Chief Executive Peter Barrett said.

The order was placed in 2008 and made public at the Farnborough Airshow on Wednesday. Orders from lessors have been a key feature of the Farnborough Airshow. [ID:nLDE66K0CQ] [ID:nNLDE66J0O] Aircraft from the latest RBS order have been placed with airline customers until June 2012, Barrett said.

RBS Aviation Capital currently controls a fleet of around 210 planes and is also an active trader of aircraft. It has no specific target for the size of its fleet, Barrett said.

Leased aircraft make up 35 percent of the world fleet but that percentage is rising as airlines turn toward lessors to reduce their capital costs, he said, adding that demand is strong in emerging markets in Asia, Latin America and the Middle East.

“I think airlines are optimistic but there is a suggestion of caution which also reflects the broader economy,” he said.

The first of the aircraft announced on Wednesday has already been delivered to Indonesia’s Garuda, which also announced an order for six A330 wide-body passenger jets.

Airlines have cut capacity to weather the recession, but are notorious for jumping on any traffic recovery by adding capacity to try to grab market share, only to dent their profitability.

But Barrett said airlines had learned from the past.

“There is a balance of cautious optimism and airlines have managed the recession relatively well. The industry has come through this storm better than many expected two years ago.” Funding for aircraft purchases was also picking up.

“We’re certainly in an improving market in terms of liquidity, but I think it will take time to get back to pre-crisis levels.”

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RBS Aviation sees emerging market growth