Gregory Polek has spent his entire career in aviation journalism with AIN, starting as a proofreader and assistant to then-managing editor Mary Mahoney in 1995 after serving an internship with&nbsp;New Jersey Monthly&nbsp;magazine and completing his B.A. degree in English/Writing at New Jersey’s William Paterson College. By 1997 Polek accepted a position as an associate editor, covering the regional airline beat for&nbsp;Aviation International News&nbsp;in place of retiring industry veteran Don Anderson. The assignment took Polek across North America and Europe to profile regional airlines varying in size and mission from the likes of floatplane operators Kenmore Air and Chalk’s Ocean Airways to regional jet operators such as SkyWest and American Eagle. Today, in his dual role as Air Transport Editor and International Airshow Editor, Polek writes, edits, and manages AIN’s commercial aviation content while overseeing each of the company’s daily international air show publications in Paris, Farnborough, Singapore, and Dubai. Most recently Polek has assumed oversight of daily coverage of the Helicopter Association International’s annual Heli-Expo convention.

Senior Editor

Gregory Polek

The International Monetary Fund’s April 18 warning that Europe’s banks could lose some $2.6 trillion over the next 18 months lent weight to concerns of a continuing aircraft finance drought recently voiced by airline treasurers and finance bosses. Calling the situation “disappointing” during last month’s ISTAT Americas conference in Arizona, United Airlines senior vice president of finance and treasurer Gerry Laderman lamented what he called the “overreaction” by some governments in Europe to compel their banks to carry more capital.


In last week’s Global Financial Stability Report, the IMF, which had previously urged European banks to further cut back on lending to preserve liquidity, advocated a more balanced approach out of concern about suppressed economic activity in Europe and beyond.


Laderman’s counterpart at US Airways, Tom Weir, noted that while his airline accessed the European bank debt market for deliveries “pretty much exclusively” in 2008 and 2009, it has since had to turn to other sources. “This year things have only gotten worse,” he said. “We’ve seen, for example, a lot of sale-leaseback proposals where the lessors were fairly confident in getting leverage from European banks and ultimately weren’t able to get it.”


Weir did express hope that some institutional debt would surface to take up the senior tranche of some of the transactions. “There’s an idea knocking around out there that that’s in the offing, but we actually haven’t seen a firm commitment for senior debt,” he said.


While Laderman concurred that the European lending environment has only deteriorated this year, he, too, expressed some hope that institutional investors will serve as a substitute under the premise that aircraft carry some of the most attractive kind of collateral against which one can lend. “Hopefully, more institutions see that and we’ll have some sort of substitute for the European banks that have shut down their aviation lending practice,” he said.


But Atlas Air vice president and treasurer Ed McGarvey reported higher finance costs for four- and six-year-old Boeing 737-800s than for new 747-8 Freighters, which it funded more competitively as recently as December 2011. “So it just shows what’s happened to the number of people who were willing to come in and bid on the aircraft—that pool has shrunk dramatically,” he concluded.

Euro Debt Crisis Limits Airline Finance Options

Access to European bank debt has dried up for airlines.

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