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24Competitiveness of the Russian leasing companies in the passenger air transportation market Voronkevich A.
Анализ состояния рынка лизингового финансирования в сфере авиаперевозок в России Воронкевич А. Б.
Воронкевич Алена Борисовна / Voronkevich Alena Borisovna - студент 4 курса, факультет менеджмента, Финансовый университет при Правительстве Российской Федерации, г. Москва
Abstract: the article tells about types of lease financing used by airline companies in Russia nowadays, their specific features and particular use in crisis conditions. In the end of the article there are some predictions considering to the nearest future development of the passenger air transportation Russian market.
Аннотация: в статье проведен анализ наиболее распространенных в российских реалиях видов лизингового финансирования, а также рассмотрены перспективы развития рынка лизинговых услуг для авиакомпаний в среднесрочном периоде.
Keywords: leasing, Russian airline companies, types of financing in the air transportation market.
Ключевые слова: лизинг, российские авиакомпании, лизинговое финансирование на рынке авиаперевозок.
In the main directions of social and economic development of Russia on a long-term outlook the role of civil aviation in a transport complex is emphasized. At the present stage it acquires special relevance in connection with imposition of sanctions for Russia and the increasing complexity of receiving the credits in the international market. The difficult situation in economy could not but be reflected also in aviation leasing. Each company seeks to find unique approach to business in such competitive fight, using its financial resources as effectively as possible. Leasing in these conditions is one of the most perspective types of investment activity which allows to form fixed assets without getting them in property.
Today more than a half of the Russian planes are in leasing: the operating park of forty largest domestic airlines which are carrying out about 99,8% of all air transportation in Russia makes 848 planes. From them in leasing there are 457 planes, in rent there are 28 ones, so in total it is 54% of all park [4]. The overwhelming part of planes is in leasing even at the largest players of the market, such as Aeroflot, S7 and UTair. It is caused by the fact that the modern aircraft represents the hi-tech product having high initial cost. The new turbo-propeller plane of regional lines is offered for sale with the bid price from 10 to 30 million dollars, but a hundred-local regional plane costs from 35 million dollars [2]. Not all airlines can buy so expensive property on their own funds. They should ask banks and the leasing companies for the loan.
Today the most popular types of leasing in the Russian market are financial and operational one [2]. Prevalence of this or that type of leasing is caused by a number of factors among which financial opportunities of the company, need for certain models of planes, the realized programs, the size of the company, credit history, etc. Financial leasing represents providing access to money for acquisition of aviation equipment by installments. The airline uses the received means for repayment of the plane at the producer and exploits him, paying credit debt regular payments. As a rule, the credit is extinguished within 10-15 years [1, p 56-59]. After payment of all obligations the airline becomes the full owner of the plane. Here the object of leasing how many the borrower is not so much important as well as type and modification of the plane, its technical condition. The credit is issued under
balance of the borrower. Many large and financially steady airlines use financial leasing. They are ready to assume risks of residual cost of the plane and to operate them [4].
At the existing financial position of the Russian air companies they can't act as reliable clients. Thus, financial leasing is not favorable to airlines at this stage.
If investors and banks have doubts about solvency of the client, they suggest to sign the contract of operational leasing where crediting is carried out under property and the most important is the object of financing. Operational leasing is attractive to investors as the plane is liquid pledge. The new plane from plant is given to a carrier to the comparatively short term, that often equal from 3 to 7 years. From the point of view of airlines operational leasing gives them the chance to receive in temporary use expensive equipment on which purchase from them there are neither sufficient own means, nor a possibility of purchase by installments on the bank credit. Besides, he allows operating fleet with big degree of flexibility: if in five years the situation exchanges, the planes that were taken earlier can be handed over and to take equipment of other brand and capacity.
Returnable leasing is rather new and interesting practice which has gained popularity in the world market in this 21st century. But it isn't popular in Russia. The traditional technology of returnable leasing means the sale by the enterprise of the equipment and real estate of the leasing company with his subsequent use under lease. Thus, the enterprises attract additional financial resources, and in some cases have an opportunity to save on taxes.
In aviation branch practice of transactions of returnable leasing concerning new planes is widely used. The airline chooses a certain type of the aircraft and addresses his producer with the offer to sell a certain number of similar planes in the certain period of time. At reaching an agreement the airline transfers the acquired equipment from the balance to fixed assets of leasing firm. In practice large airlines use the mechanism of returnable leasing, most often signing the contract under financial leasing. So, they manage to take the maximum benefit at a stage of resale of the plane to the leasing company. In Russia transactions of returnable leasing were already used by Aeroflot.
But all in all returnable leasing is the perspective direction of development of the Russian market in medium-term prospect when domestic airlines have funds for expansion of own park and an opportunity to buy planes of the Russian production (Sukhoi Superjet 100 and MS-21). Several suggestions for improvement and stabilization of a situation have arrived also from airlines. So, the CEO of the Aeroflot airlines Vitaly Savelyev has suggested to legalize wet leasing in Russia [5]. It means an opportunity to lease planes with crews of foreign airline. Use of wet leasing can increase considerably flexibility of reaction of the companies; however the bill still is at a discussion stage.
Summing up the results it is possible to tell that in the nearest future the most rapid development in the Russian market will be gained by operational leasing. We have some reasons for that.
Firstly, fluctuations of the world prices for oil which lead to reduction of fuel prices (for the last four months the prices fell more than for a half), and also complexity of forecasting of dynamics of growth/recession of volumes of a passenger traffic, change of demand for various types of transportations put airlines in uncertainty position. In these conditions there are more bases to take planes in operational leasing for rather short term and subsequently to change them on more suitable when the situation as in fuel pricing and dynamics of demand in the market of air transportation clears up.
Secondly, increase of interest rates for the credits and a difficult financial position Russian air carriers (for example, in the reporting of "Aeroflot" under IFRS the net debt of the company by the end of September, 2014 has grown by 35,7% in comparison with September, 2013, to 91,8 billion rubles. The debt relation to an indicator of EBITDA has grown to 4,7) does unprofitable application of financial leasing [3]. Growth of exchange rate also exerts direct impact on financial obligations of carriers. For example, 97% of financial leasing contracts in Aeroflot is nominated in dollars.
Thirdly, other types of leasing - returnable and wet ones - are almost not developed in Russia. Moreover, the wet leasing isn't legalized today and exists only at the level of the bill. Therefore in the short-term period it is impossible to say that they will be able to compete with operational leasing.
Thus, timely change of a vector of development of leasing financing towards prevalence of operational leasing and flexible policy of leasing firms can significantly strengthen the position of the Russian airlines in the market in the next two-three years.
References
1. Investments: Educational grant / Podshivalenko G. P., Lakhmetkin N. I., Makarov M. V., etc. M.: KNORUS, 2004. - 176 pages.
2. Galiaskarov A. A. Model of financial leasing of planes of new generation by the Russian airlines [Electronic resource]: — Access mode: //http://www.magistr-mba.ru/tree_articles/ (date of access: 2/4/2015).
3. Aviation equipment [Electronic resource]. - Access mode: http://www.aeroexpert.com/. (date of access: 2/12/2015).
4. Navigator of the Russian aviabusiness [Electronic resource]: - Access mode: http://www.aeromarket.ru/ (date of access: 2/12/2015).
5. Market of avialeasing-2015 [Electronic resource]: Access mode: http://www.aviaport.ru/digest/2015/01/21/323569.html/ (date of access: 2/12/2015).
