Changing Tax Consequences Whether you are an investor or a service provider, the Tax Cuts and Jobs Act (the “TCJA”) has changed the tax consequences for entities that compete in the transportation equipment lease finance marketplace. Investment stands on the marginal revenues and cost (including tax) it generates. The great news: TCJA reduces the after-tax […]
Demand in Aviation Global passenger traffic is growing faster than expected. The International Air Transport Association (IATA) expects 6.0% revenue passenger kilometer (“RPK”) growth for the year, above the 5.5% long-term trend. This level of RPK growth is indicative of the robust demand in the aviation sector. Rising fares coupled with continuing (but still relatively) […]
Rail Traffic Landscape AAR statistics demonstrate rail freight traffic volumes correlate closely with changes in overall GDP (except for grain, coal, and crude oil product movements, which are not tied to GDP). With tax policy improving the outlook for GDP growth (2018 is now expected to be 2.9%[1]), the Conference Board index of leading indicators […]
When comparing investment returns it is misleading to simply look at headline figures. At first glance, it might seem an investment that gained 12% last year is better than one that gained 9%. In reality, it depends on how much risk was involved in generating those returns. The more risk (or volatility), the less probable […]
According to IMF and the OECD, 80% of the world’s major economies are at full employment. Encouraged by immediate expensing and repatriation of cash from overseas, the U.S.’ traditionally robust consumer demand is now expected to be supplemented by productivity improving capital investment. Transportation investment markets follow traffic demand and with economic growth on the […]
The New Tax Law The Tax Cuts and Jobs Act (the ‘Act’) will be an investment game changer. It is expected to pass Congress and be signed by the President. It will lower the corporate tax rate to 21% and provide for 100% immediate expensing of capital investment (but only for five years). Currently, the […]
Investing In Transportation Transportation equipment investment is a long-term affair. It’s a complex business since investment risk and profit profiles change over an investment’s duration. At the macroeconomic level, the stage of the business cycle affects the value of everything, including leased air and rail equipment. When the economy is in recession, fewer people are […]
Changes In U.S. Law And Economy The U.S. Economy has sustained 3% growth for two consecutive quarters. Prospects for continued growth in 2018 are strong, and there is likely to be an extra boost if tax reform is passed by Congress. Rising household wealth and job gains suggest the Federal Reserve will raise rates in […]
The Impact of Natural Disasters On the Gulf Coast, Hurricane Harvey forced the shutdown of refineries and disrupted the production of plastic resins and refined oil products. The Union Pacific and Burlington Northern have lifted embargos for shipments to, from, or passing through the Gulf region. They continue to evaluate affected areas as repairs complete […]
Air carriers invest to improve profitability and expand share in the markets they choose to serve. Selecting the right aircraft and engines are vitally important to financial success. The process requires input from marketing, maintenance, engineering, finance, and the flight operations teams. There are numerous factors to consider, beginning with the composition of the carrier’s […]
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Growing Aero and Rail InvestmentsMarch 19, 2025 - 8:09 amBoeing delivered 45 jets in January[1]. That’s 19 more than Airbus’ January deliveries. COMAC and Embraer each delivered three aircraft in January 2025. Airbus plans to deliver 820 commercial aircraft in 2025, 7% more than in 2024 (Boeing delivered 348 in 2024). Boeing’s 737 deliveries remain capped at 38 aircraft per month. The newly appointed […]
2025 Core Themes for Aero and Rail InvestmentFebruary 5, 2025 - 9:27 pmStrong GDP growth, sticky inflation, and a soft landing–core themes for aero and rail investment. The economy’s performance in 2025 will drive the Fed’s future interest rate decisions. Higher ticket revenues and lower energy prices (jet fuel is expected to be less expensive in 2025) will benefit air carriers. The International Air Transport Association estimates the […]
Looking Forward to 2025 Aero and Rail InvestmentJanuary 7, 2025 - 7:37 pmNovember’s jobs report exceeded expectations (payrolls increased by 227,000[1]) yet the Fed lowered its benchmark interest rate December 18th by a quarter of a percentage point (to between 4.25% and 4.5%). Fed Chairman Powell’s recap: “I think we’re in a good place, but I think from here it’s a new phase and we’re going to […]