Story ID: 
Loan Repayment Becomes More Challenging
By: Charles Alcock
Caption: The specter of aircraft repossessions is starting to loom larger over the business aviation community as more owners struggle to repay loans, according to 
Word Count: 290
The specter of aircraft repossessions is starting to loom larger over the business aviation community as more owners struggle to repay loans, according to UK-based consultancy the International Bureau of Aviation (IBA). Mark Wooler, the group’s head of consultancy, told AIN that deteriorating economic conditions are increasingly putting financial pressure on corporate operators who do not own their aircraft outright. At the same time, he maintained that more executive charter firms are finding it harder to keep up repayments as operating costs are rising and profit margins are shrinking. IBA acts largely on behalf of lenders, helping them fulfill all the legal requirements associated with taking possession of an aircraft on which they hold the lien and handling all the associated records. “We will audit the aircraft, checking that they are still airworthy and taking care of any bills that remain to be paid, such as ATC and landing fees,” explained Wooler, who previously worked in the aviation departments of two leading banks.Wooler does not expect a rising number of repossessions to cause a drastic collapse in aircraft values on the pre-owned market. However, he does see potential for some softening in values and an end of the “silly premiums” that some buyers have been willing to pay for early delivery positions on new aircraft.The global credit crunch has seriously tightened banks’ liquidity, according to Wooler, making them generally less eager to lend more money to buy aircraft. He said that UK banks typically have been willing to lend as much as 80 to 90 percent of an aircraft’s value but some of them, in the past, have not been diligent enough in ascertaining the real value of the asset and therefore have found themselves holding insufficient collateral.