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[Aviation Financing Trends Shift, Oil Prices and Borrowing Costs Become New Concerns] ⑴ At a major industry conference this week, delegates stated that soaring fuel and borrowing costs have replaced aircraft shortages as the biggest concern for jet financing providers, indicating a shift in market sentiment after years of supply-driven turmoil. ⑵ Recent market volatility has exacerbated this shift, including Baltic Airlines' bankruptcy filing, the Middle East wars pushing up oil prices, and a sharp rise in US Treasury yields. ⑶ Leasing company executives stated that the market is turning, and this winter may be more financially challenging than expected. ⑷ Analysts had previously warned that smaller airlines could face pressure from rising fuel costs in the coming months. ⑸ At the same conference a year ago, speakers focused on supply shortages driving up aircraft, engine prices, and leasing rates; now, while manufacturing bottlenecks remain, they are seen as a buffer against slowing demand. ⑹ The head of global transport capital markets at BNP Paribas stated that the speed of the change is alarming, and the momentum supporting the aviation industry may stall or even collapse sharply this winter, particularly in Europe. (7) Executives at aircraft leasing companies stated that engine and parts shortages have eased significantly, but concerns about interest rates have intensified sharply, and borrowing costs are crucial for lessors who control approximately half of the global fleet. (8) Representatives noted that rising fuel costs have begun to dampen activity in the used aircraft market, with some lease rates declining by about 5% to 10%. The business model for mid-aged aircraft will be impacted when oil prices reach $100 per barrel. (9) Some executives discussed potential triggers for overcapacity for the first time in years, but most believed that aircraft and parts shortages would not ease in the short term. (10) New investors are still entering the aviation finance sector, which is beneficial to the industry as a whole, but intensifies competition among leasing companies for the same batch of aircraft assets. (11) Executives stated that there are currently no signs that rising fuel prices and borrowing costs will lead to a significant decline in travel demand; the selection of insurers and partners will be more important in the next 6 to 12 months. (12) Some executives believe that the next industry downturn may originate outside the aviation industry; geopolitical factors or a bond market collapse could be unforeseen triggers.