Posted on: 01 April 2019 by Alexander Preston
Geven and Irish-based financial and leasing specialist Velantis Seat Financing Solutions are to work together to offer passenger seat leasing services to airlines, operators and aircraft lessors.
This important agreement follows long and detailed discussions between the two companies which started during the 2018 Hamburg show.
Says Rodolfo Baldascino, marketing & sales manager at Geven: “New aircraft monthly deliveries are increasing, the world-wide fleet is growing, and the average age of aircraft will increase year by year, thus operators of large, medium and small sized airlines will be faced with important cabin revamping activities in the next few years. Furthermore, brand image is a key competitive factor of success for airlines and this is achieved by consistency of cabin appearance across the fleet. In this scenario the need for new seats becomes more of a priority especially for leased aircraft transitions from one operator to the next.”
“In our past experience,” Baldascino continued, “some airlines have a real urgency to modernise their cabin to maintain competitiveness and consistency with their business model however, due to the lack of financial resources, they are unable to implement this seat replacement project. A significant number of projects do not come to fruition because of these budget constraints despite the fact that we are technically able to meet their requirements in terms of offered product and program lead-time for delivery.”
Geven can now reveal that leasing will be offered to all Geven customers as an additional payment/financial option for seat acquisition as part of the commercial proposal for both line-fit and retro-fit aircraft seats sale. During the negotiations with Geven those customers interested in learning more on seat leasing options will liaise with Velantis experts who, on the basis of the terms offered by Geven and pending a risk/credit assessment, shall elaborate a specific leasing proposal to them, highlighting leasing terms, duration and monthly rates to be paid.
We have made a rigorous analysis of the aircraft interiors market,” explained Fiachra Kirwan, CFO at Velantis, “and found it very attractive in the long-term. As a result, we have decided to invest specific assets to shape an effective passenger seat leasing service. Geven has been identified as the most flexible and adaptive seat vendor on the market and in partnering with them we expect to see an increase in their seat sales since many airlines will now be able to implement new seat projects by spreading the financial impacts over a longer period of aircraft operations. Financial-wise, the leasing option also offers advantages in terms of positive impacts on airlines yearly expenditures and cost profile and it also lightens the balance-sheet assets.”
“The more seat leasing becomes an established practice among customers the more effective the management of these assets within the industry shall become,” added Kirwan, “and consequently the residual value of seat assets at the end of the lease period will grow. The entire industry will benefit from this.”