On 23 February, AirBridgeCargo Airlines took delivery of a 747-8F at Moscow’s Sheremetyevo Airport (SVO) after it was ferried from Boeing’s Paine Field (PAE) facility. The aircraft (63787) is the first to be partially financed under US-based lessor Aviation Capital Group LLC’s (ACG’s) Aircraft Financing Solutions (AFS) program. ACG announced the deal last month and will guarantee the loan from MUFG Bank Ltd.
According to Boeing’s orders and deliveries book, AirBridgeCargo’s parent company, Volga-Dnepr Group, now has no remaining outstanding orders for 747-8Fs. However, the OEM lists four remaining 747-8F orders for “Unidentified Customer(s),” which were placed in December. As noted in the Cargo Facts review of production freighter orders and deliveries for 2018, late in the year, VDG and its UK affiliate CargoLogicHolding agreed to order five 747-8Fs that have not appeared in the companies’ backlog with Boeing, suggesting that at least some of the ordered freighters will eventually operate for VDG affiliate carriers, even if they are financed by lessors.
The financing deal with ACG also points to an interesting trend in the freighter space, wherein freighters as assets are gaining more interest from banks and other lenders. Last month, global investment firm KKR announced it was investing US$1 billion in lessor Altavair as part of a long-term partnership between the two companies. The capital injection will be used to expand Altavair’s portfolio of commercial aircraft, which includes both passenger aircraft, and freighters. Initial investment “will go towards the acquisition of six cargo aircraft on long-term lease with a diverse group of airline counterparties.”
Many other recent “blockbuster financing deals” have related to narrowbody freighters, as with recent financing agreements from Spectre Cargo Solutions and Vx Capital Partners. The Vx Capital deal is also a first-of-its-kind financing agreement for the acceptance of older freighters as collateral for an asset-backed security. Whether the ACG deal points to future widebody freighter financing deals remains to be seen, but Stefan Kågeman, Vx Capital Partners, SVP, Head of Aircraft Marketing, said at the recent Cargo Facts EMEA conference that e-commerce is changing the freighter finance market.
“Financing freighters is not new, but what has changed – driven largely by e-commerce – is that the freighter segment of the aircraft investment market is gaining larger recognition among the investor community,” Kågeman said during a panel discussion on passenger-to-freighter aircraft conversions. The prevalence of converted aircraft serving e-commerce demand means major operators and lessors have “cracked the code on the various pitfalls and problems,” Kågeman said, adding, “Even smaller airlines flying for integrators are backstopped by the stable business behind it.”
Those interested in hearing more about freighter aircraft transactions are invited to join us at Cargo Facts Asia 2019, to be held 15-17 April at the Langham Shanghai. For more information, or to register, visit www.cargofactsasia.com. Discounted early-bird registration ends 1 March.
