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HomeLeasing CompaniesOps Lease Risk

Investment in the aviation industry is no different to traditional financial investment: it carries a risk which, if leveraged effectively, will result in profits for the investor. The principle of the aircraft lease follows the same logic: the lessor of the aircraft carries the risk the lessee will fail to pay, or the lease revenue will be subject to adverse market trends and drop. The International Bureau of Aviation studies the cash flows derived from leasing activities, keeping abreast of the trends in the lease market to predict any drop in lease revenues and therefore cash-flows. IBA also analyses the aircraft debt and its maturity to determine the optimal lease revenue that would amortise the investment and cover the risk. IBA also quantifies the risk taken on by the lessor and can recommend ways for investors to transfer some or all of the risk.