There is no helicopter leasing bubble
It is easy to be dismissive when industries like helicopter leasing suddenly become fashionable. But just because a product or sector suddenly attracts attention it does not mean that we are witnessing a helicopter leasing bubble.
When a sector suddenly starts attracting capital it is right to be wary. There is always a fear that what is hot today will be out of fashion tomorrow. But it is too early to worry about helicopter leasing.
The market is clearly hot. At the end of our Helicopter Finance Conference last week almost all of the 200 plus delegates said they felt optimistic about the next 12 months. This clearly an exciting time for helicopter leasing.
In 2010, 2011 and 2012 we saw one helicopter leasing company launch each year. In 2013 we saw three more. It is only February and we have already seen Lobo Leasing tie up with GSO Partners and Perella Weinberg Partners and Hawke Aerospace launch Infinity. At the Singapore Airshow the CEO of GE Capital Aviation Services told Bloomberg that they were seriously considering launching a helicopter leasing business.
But this growth in interest does not mean we are seeing a bubble. We are seeing a mixture of investors looking at the sector and firms like Infinity and Amur are also looking at different markets. The market is clearly getting more competitive but the fundamentals that make helicopters attractive assets have not changed. This is just the start of a new industry. And it is has happened quickly. It took 20 years for commercial aircraft leasing to become as competitive as the helicopter market is now.