Cape Town Convention gives hope to China aviation

These are tumultuous times for the aviation industry. The seizing up of the money markets has resulted in a scarcity of liquidity, which has crippled the ability of airlines to raise secured debt financing for the acquisition of their tools of the trade – namely aircraft and other aircraft-related objects such as engines and airframes.

Any available debt in the market has been priced at record high margins even when borrowed on the basis of security granted against brand-new aircraft. Airlines, which are already facing deteriorating operating profits, would struggle in any case to meet the high periodic interest payments even if they did take on such debt in order to purchase pre-ordered aircraft.