We had a chance to review the market in its current state with the Managing Director of Palma Holding in Dubai. Mr. Anas Bennani has a background in banking, finance, and investments.  Mr. Bennani is Managing Director of Palma Holding and Palma Capital, a DFSA regulated entity. He has managed to successfully close numerous aircraft transactions with flag carriers across Africa, the Middle East and the C.I.S valuing a total of $500 million. Air finance Journal awarded him the “2014 African Deal of the Year “ for one of the transactions structured and closed by Mr. Bennani.  At the recent Dubai air show, Mr. Bennani was behind the largest MoU at the event for 20 DeHavilland Canada Dash8s.

At the last Dubai show, your company placed the largest for Dash8s.  Given how the market is now, can you tell us how the deal is developing?

Palma has been engaged continuously and is, even now, in discussions with multiple airlines.  We now have to wait for the Coronavirus impact to pass but the Dash8 will be important for many of these airlines and we are confident that we reengage as soon as the crisis is contained.

The commercial aviation market seems to have entered a new ice-age. What is behind your confidence in the market coming back and when?

In fact, the commercial aviation market has been decimated by this Coronavirus, passenger aircraft will have difficulties to come back in comparison with cargo aircraft. We have seen a huge demand in ACMI Cargo aircraft; airlines are even willing to commit now on cargo aircraft or aircraft with quick-change kits. This crisis has demonstrated that even if the movement of persons is highly restricted, goods are moving for an emergency situation and also for normal operations.

 We have heard an argument that for the air travel industry to come back, it will have to start at the grassroots – flying.  That means small aircraft under 100 seats.  Do you agree with this theory?

I completely agree with this, forget about the widebodies used for long-distance flights, you may see a small recovery in the narrow-body for domestic and flights. But definitely the restart will be with smaller aircraft to link domestic and regional destinations. As a passenger, I will be really uncomfortable traveling with 450 passengers in A380 – god knows from where they come from and what restrictive measures they have been through if any. The world economic machine has come to a complete stop and will certainly start with the basics.  Small, efficient and affordable aircraft! You will not buy a Mercedes or Bentley after the crisis, you will buy a Land Rover and Dash8 is a Land Rover.

What gives you confidence in De Havilland Canada and their Dash8?

Following the same logic, DHC Dash8 is well-positioned to cater to the need for a slow-starting of the airline industry by providing efficient and affordable aircraft to jump-start the airline industry on a local scale.

As you look ahead six months, when we hope air travel will have started to recover, what attributes of the aircraft market give you confidence?

After the crisis we will probably see an extremely low load factor and it will not pick up for a long time, I estimate years, however, you will have a minimum passenger movement. If it is 40 people per trip, you will go bankrupt with a narrow body, however, you will be doing ok with a Turboprop.

Do you see the Dash8 market recovering faster or slower than other aircraft and why?

Following the same logic, the world will start from the basics, and especially the airline industry. Due to the upcoming restrictions on travel in the aftermath of the crisis, many countries will still impose quarantine on travelers and I believe that a lot of people will switch to domestic and travel rather than to the usual international long-distance travel. 

What do you see in relation to market recovery in terms of access to credit?

If we have a great push from Export Development Canada to lower their previous restrictions on Emerging and some sanctioned countries (ASU, reputation risk,  etc. ) it will provide great help to Canadian exporters like DHC. It will also be a great help to penetrate markets, and in the meantime, provide a jump start to the aircraft industry in Canada.

Are you concerned that the Flybe fleet will come back and compete with you?

First of all, will not get access to these aircraft all at once. We expect these aircraft will take some time to be recovered and refurbished for the next lease.  The Flybe fleet is generally mid-life to end life and will be attractive to other types of customers than those we are working with, who are looking for new aircraft.  The Dash8 has a reputation for robustness and reliability. The additional aircraft on the market may actually lead to an expansion of the operator base. Which is something generally welcomed by investors!

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