Aviation finance

Min Cao and Thomas Conlon

Chapter 4 in Research Handbook on Air Transport Management, 2026, pp 54-64 from Edward Elgar Publishing

Abstract: This chapter provides an overview of aviation financing and related research. While aviation has many characteristics common to other industries, it also possesses salient properties that allow airlines to raise cheaper debt financing than implied by their credit profile. The credit enhancements which assist aviation borrowers in raising capital at low relative cost are introduced. The collateral underpinning borrowing is then described, with a focus on aircraft. A broad-ranging discussion of debt financing is provided, covering bank and capital markets lending. The chapter then develops asset leasing as an alternative to financing and describes the mechanics underpinning the leasing industry, which currently finances over half of the global commercial aircraft fleet. Concluding the chapter is a discussion of the tools available to the financing community to encourage the aviation industry towards net zero emissions.

Keywords: Aviation finance; Credit enhancement; Aircraft leasing; Sustainable aviation; Sustainable finance (search for similar items in EconPapers)
Date: 2026
ISBN: 9781035336272
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