Last week, UK airline Flybe grounded its planes, stranded passengers and filed for bankruptcy protection, as the struggling carrier was buffeted by a Coronavirus-related slowdown in demand. Flybe’s demise is a trenchant example of the implications of Coronavirus for investors in the aircraft sector, including aircraft lease ABS investors whose cash flow depends on continued lease payments from various global carriers. Of course, the impacts of Coronavirus will vary, with some countries, servicers, credit-rating sectors and deal structures worse off than others. Using RS Edge, aircraft lease ABS investors can drill down into collateral to see country, carrier and aircraft exposures, stress test deals and learn potential fault lines for deals as Coronavirus uncertainty looms.
The snapshot below illustrates how clients can benefit from RiskSpan and Intex data and analysis in this sector. Using its embedded Tableau functionality, RS Edge can quickly show investors the top country, carrier and aircraft exposures for each deal. Investors concerned about carriers that might be increasingly vulnerable to Coronavirus disruption (such as Italian or Asian airlines today and likely others in coming weeks) can determine the exposure to these countries using the platform. In addition, when news is announced that impacts the credit quality of carriers, investors can view exposure to these carriers and, with additional analysis, calculate the potential residual value of individual aircraft if the carrier goes bankrupt or the lease terminates. RiskSpan can also provide data on exposure to aircraft manufacturers and provide valuation of bonds backed by aircraft leases.
Contact us to learn more about how RiskSpan helps clients manage their airline (and other risk) exposure and how we can assist with customized requests to perform further analysis requiring add-on data or calculations.