2018 Asia Pacific Aviation Finance and Operating Leasing School

8:30AM Registration

8:50AM Introduction by course leader

9:00AM Fundamentals of the aircraft leasing industry

• Background to aircraft leasing
• Industry fundamentals and key drivers
• The rise of Chinese lessors and their future growth path
• Aircraft valuation and residual value risk

9:50AM Operating platforms for lessors

• Lessor operating platforms
• Deal process, controls and approvals
• Technical specifications
• Lease management
• Negotiating a lease transaction
• Systems and IT

10:30AM Risk management for lessors

• Risk management framework
• Asset risk
• Airline credit risk and evaluation
• Balance between risk & return
• Liability risk
• Jurisdictional risk and repossession considerations

11:10AM Coffee break

11:30AM Technical asset management of a fleet

• MRO – what is good maintenance planning and what is not?
• How to manage a diversified pool of maintenance reserves and costs
• Conflicting interest with airlines, lessors and MROs in maintenance reserve management
• Portability and assignability of maintenance reserves
• The importance of technical records for engineering

12:10PM How do lessors choose a tax efficient jurisdiction for aircraft leasing

• Evolving tax regimes of tax efficient jurisdictions
• Key considerations for choosing a tax efficient jurisdiction for registration
• What is not a good tax treaty
• Typical structures of the transactions

12:50PM Lunch

2:00PM How do lessors finance their fleets?

• Why there is a constant source of funding for global lessors
• How to diversify funding costs
• Lessors’ credit vs. aircraft credit – which one is more important to lenders when assessing risks
• How to utilise your capital structure to minimise funding costs

2:40PM Cape Town Convention

• What is Cape Town Convention
• Cape Town Convention’ advantages to aircraft financiers, lessors and airlines
• Insolvencies and default remedies
• How has it evolved over the last decade?

3:20PM Asset based lender’s perspectives on credit risk and asset risk

• Credit Risk Asset risks
• The differing risk exposure of lessors
• How do asset based lenders manage their risk differently?
• Lending in the current market

4:00PM Networking coffee break

4:30PM Fundamentals of aircraft valuations

• Supply and demand for aircraft
• Methodologies for valuations
• Factors affecting aircraft values
• Interpretation of market information
• Secondary markets

5:10PM Financial analysis and evaluation of airlines

• Access to financial information of airlines – public vs private
• Industry, business and credit risk
• Key performance and valuation metrics and indicators
• Performance of airlines

5:50PM Close of day one

8:30AM Registration

8:50AM Introduction of course by course leader

• Welcoming note
• The airline industry today
• Key drivers of air transport

9:20AM Managing the risks in aircraft financing

• Credit risk: Assessing the solvability of an airline to meet its LT debt and lease obligations
• Asset risk: Understanding liquidity, life cycles and market values of aircraft and engines
• Structural risks: Getting LTV, security package and structural cash flows right
• Repossession & remarketing risk: Legal & practical considerations

10:00AM A focus on commercial debt

• Financing menu for airlines and lessors
• Secured vs unsecured debt
• Financing airlines vs lessors
• Single aircraft vs portfolios
• Managing contingent currency and interest rate risk
• PDP financing

10:40AM Networking

11:00AM Debt capital markets

• Transaction, private vs public placements
• Senior unsecured and secured notes
• ABS and EETCs
• ECA guaranteed bonds

11:30AM Derivatives for the aviation industry

• Interest rate risk: Fixed vs floating
• Fuel price volatility
• Currency risk

12:00PM Japanese operating lease with call option

• JOLCO fundamentals
• Key considerations
• NK vs TK investors
• What will happen tomorrow

12:30PM Lunch

1:50PM Case Study: Bidding on an airline’s RFP

This is an interactive case study inspired by real cases. Guided by the speakers, the audience will be split into groups to make a bid and win an airline RFP.
The objective of the Case Study is to put the participants in an Aviation Banker’s shoes during the entire RFP process with an airline. In order to win the mandate, each team will have to juggle with the requirements imposed by airline on the transaction structure, their internal constrains and the competition.

3:20PM Networking

3:40PM Getting your mandate and term sheet right

• Mandate letter - why sign one?
• Mandate letter - what's important?
• Key structural issues to cover at term sheet stage

4:20PM Distribution of aviation assets

• Reason for distributing aviation assets
• Finding liquidity and matching it with the appropriate risk profile
• Recent dynamics on the loan market

4:50PM M&A and IPOs in the aviation sector

• Types of M&A deals
• Common tension points between buyers and sellers
• Why do airlines IPOs
• Typical valuation methods

5:20PM Crystal ball session

5:50PM Course summary and close of day two

8:30AM Registration

9:00AM Introduction by course leader

9:10AM Rating methodologies for airlines and lessors

• Rating process and framework
• Lessors and airlines rating methodology
• Rating EETCs
• Rating Aircraft ABS
• Key credit forecast for 2019

9:40AM Fleet selection and financing considerations for airlines

• Evolving airline business models
• How do airlines’ business models affect the selection of aircraft?
• Financing sources for startup LCCs
• Key considerations for leasing vs buying

10:10AM Understanding the engine as an asset class

• The engine leasing market
• The business model
• The importance of engine maintenance
• Residual values and exit strategies
• The engine OEMs in the aftermarket

10:40AM The use of SPVs in aircraft finance and leasing transactions

• What is an SPV?
• Why use an SPV?
• How to incorporate the SPV into an efficient financing and tax structures?

11:10AM Networking break

11:30AM Lease accounting under IFRS-16

• Lessees: New definition, “new” accounting
• Sale and leaseback
• Transition options
• Impacts on lessors

12:10PM Taxation for aircraft leasing

• Latest developments in tax treaties
• Taxation in cross-border leasing
• Taxation in buying and selling of aircraft
• Tax relief in different jurisdictions

12:50PM Lunch

2:10PM MROs perspectives

• Market dynamic of MROs in Asia
• Conflicting interest between operators and lessors for ensuring redeliveries compliance
• How importance is the relationship of MROs with airlines and lessors
• Dispute resolutions

2:50PM Dispute resolutions

• What is a dispute?
• Documenting dispute resolution procedures
• Choice of governing law
• Resolving disputes
• Enforcing securities
• Cape town treaties and repossession
• Recent case study

3:30PM Networking coffee break

3:50PM Getting your lease agreement and return conditions right

• How to make the lease agreement and return conditions right in the first place?
• Conflicting interest with airlines, lessors and MROs in maintenance reserve management
• What are the common disputes with lease return condition and possible remedies?

4:30PM Quiz

5:30PM Close of school followed by cocktail reception