HSH Nordbank sees aviation in a steady upwind

Hamburg/Kiel, May 13, 2011 – “Following a sharp recovery last year, the international aviation industry has returned to a stable long-term growth trajectory”, confirmed Angela Behrend-Görnemann, Head of HSH Nordbank’s Aviation Business Unit at the Luftfahrt-Presse-Club e.V. in Hamburg last night.

“We expect this trend to continue”, added Behrend-Görnemann. However, this can only happen if global gross domestic product continues to go up. “At present, we project global economic growth of 3.1 percent per annum – based on our experience, this would equate to an increase of around 6 percent per annum for the aviation sector as a whole.” The Bank’s estimates are thus in line with those of the International Air Transport Association (IATA), which currently forecasts a medium-term increase of just under 6 percent in passenger traffic and one of more than 8 percent in freight traffic.

Behrend-Görnemann also takes a favourable view of the number of new deliveries and of the associated demand for finance in international aviation. “We estimate that this year alone, more than 1,000 aircraft worth substantially more than USD 70 billion will have to be financed worldwide. Some of these new aircraft will replace older models while others will contribute to long-term worldwide fleet growth. We project average net growth of a good 3 percent per annum.”

Behrend-Görnemann considers the impact of recent events in the Middle East and in Fukushima in Japan on international air traffic to be manageable. “While the political upheaval in the Middle East has so far had a very small impact on aviation traffic in global terms, we do not as yet have any reliable figures for Japan. Due to the overall quite high percentage of international air traffic accounted for by Japan of up to 7 percent, there is likely to have been a marked decline since March in this area. However, we expect this drop to be recouped over the medium term.”

Against the backdrop of the continuing upsurge in the sector, HSH Nordbank will start transacting more new business again in 2011. “We aim to close finance deals for aircraft worth a total amount of approx. EUR 750 million this year,” said Behrend-Görnemann. The Bank will lend this amount to its existing customers but it has also begun to acquire new ones.

HSH Nordbank is one of the world’s leading banks in aviation finance and provides the full range of financial services in this field. The Bank’s current finance portfolio comprises 642 aircraft worth around EUR 6 billion.