The triple seven-x is going to be a large wide-body, long-haul aircraft, which we think will be very successful in the marketplace
NEW YORK--(BUSINESS WIRE)--The airline industry, and with it, air traffic, is expected to increase in 2014, with Asia and Latin America representing the fastest growing markets, according to Tony Diaz, President of CIT Aerospace at CIT Group, Inc. (NYSE:CIT) cit.com, a leading provider of financing and advisory services to transportation-based companies, small businesses and middle market companies. These views and others are presented in the “2014 Commercial Aerospace Outlook” (cit.com/diaz), the latest in a series of in-depth executive video Q&As featured in the award-winning CIT Executive Insights video series (cit.com/executiveinsights).
Opportunity to Re-Fleet in the United States
After several years of major airline consolidations, the United States is ripe for growth. According to Diaz, “It’s a market where for the last ten years airlines have been more involved in fixing their balance sheets. It’s time for those airlines to re-fleet, so we see a great opportunity to add aircraft in the United States.”
Consolidation and Consumers
Although consolidation in the United States is all but over, international consolidation is still expected, which may ultimately benefit consumers. “However, near-term concerns about higher fares will be moderated because there is sufficient competition. Low-cost carriers have penetrated virtually every market and can step in if the large airlines increase fares.”
The Order Book and Beyond
CIT’s current order book focuses on new modern technology aircraft, which includes Boeing’s 787 and 737 Max, Airbus’s A350 and the A320 Neo. On the horizon for the industry is the E2 version of Embraer’s E-Jet and Boeing’s 777x. “The triple seven-x is going to be a large wide-body, long-haul aircraft, which we think will be very successful in the marketplace,” said Diaz.
Evolving Aircraft Financing
Aircraft financing has changed over the years. Approximately 40% of aircraft today are financed through the operating lease, which continues to gain popularity. “The operating lease allows airlines to free up cash and their balance sheet,” said Diaz. “Our expectation is that number will grow to about 50% over the next ten years.”
Leading the Way in Aerospace Financing
As one of the largest aircraft lessors with approximately $10 billion in assets and approximately 150 aircraft on order, CIT strives to be relevant with airline customers as well as with original equipment manufacturers (OEMs). “When OEMs are discussing new products, engines or airframes, CIT is at the table putting our knowledge to work by providing our opinions on what works and what doesn’t work for our customers,” said Diaz. “It’s also important that the airlines understand that we have the products that fit their needs, whether it’s brand new aircraft, bank debt or a sale-lease back of their existing portfolio.”
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About CIT Aerospace
As one of the world's leading aircraft leasing organizations, CIT Aerospace provides leasing and financing solutions – including operating leases, capital leases, loans and structuring and advisory services – for commercial airlines worldwide. CIT Aerospace owns and finances a fleet of more than 300 commercial aircraft and has more than 100 customers in approximately 50 countries. cit.com/aerospace
Founded in 1908, CIT (NYSE: CIT) is a financial holding company with more than $35 billion in financing and leasing assets. It provides financing, leasing and advisory services to its clients and their customers across more than 30 industries. CIT maintains leadership positions in middle market lending, factoring, retail and equipment finance, as well as aerospace, equipment and rail leasing. CIT operates CIT Bank (Member FDIC), its primary bank subsidiary, which, through its Internet bank BankOnCIT.com, offers a suite of savings options designed to help customers achieve a range of financial goals. cit.com
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