Posted October 9, 2008 4:07 PM
By Les Weal
Taking the Temperature of ISTAT
Over 400 industry players gathered in Prague on the 5th October for the 15th ISTAT European conference. After a Sunday night of festivities hosted with aplomb by Erste Bank, the conference on Monday began against a backdrop of Black Monday 2, the sequel, as global stock markets nosedived led by the finance and commodity sectors.
Not surprisingly, the presentations which were of the normal high standard were almost of secondary interest. Even Jeff Gazzard from the Greenskies alliance could not irk the audience with his pleas for slower growth. In the short term he is likely to get his wish!
The Monday ended with a beer tasting where another liquidity crisis loomed as delegates sought to get their glasses refilled.
The conference finally burst into life on Tuesday afternoon with the lessors and financier panel with an audience nearing the 100%. Probably initially there to hear the words of John Plueger COO at ILFC on the AIG problems, we also heard stark warnings from the entire panel.
John Plueger gave a very eloquent summary of recent events surrounding the problems of AIG and the likely disposal of ILFC. Although his comments had to remain in keeping with public announcements, it was a nice précis. Jeff Knittel of CIT outlined their strategy to mitigate a slowdown in the industry learning from the mistakes made during the last three Jeff had been through - such as keeping fleet youthful.
However it was Jose Abramovici, Head of Transporation Finance at Calyon, who in one simple phrase which opened his presentation – “IT IS GOING TO GET WORSE BEFORE IT GETS BAD” set the mood and bought a nasty dose of reality to the proceedings. Much of the subsequent debate, with Bertrand Grabowski DVB who echoed Jose views, was on LIBOR costs and the shrinking aviation finance sector and the likely huge shortfall in funding for deliveries in 2009 and possibly beyond.
This led into a few closing remarks from John Plueger who in typical and forthright ILFC way suggested the two manufacturers trim their production rates. Boeing is by default but I wonder if Airbus will listen.
Recently John Leahy Airbus said (with fingers crossed) rate increases would go ahead, I hope he was touching wood, had found a four leaf clover and was holding his lucky horseshoe when making that announcement.
The closing appraiser panel which I sat on was low key with no real issues from anyone on the views expressed by appraisers, unusual for this forum perhaps we were all shell shocked?
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