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AYR » Topics » If the effects of terrorist attacks and geopolitical conditions adversely impact the financial condition of the airlines, our lessees might not be able to meet their lease payment obligations, which would have an adverse effect on our financial results anThese excerpts taken from the AYR 10-K filed Mar 2, 2009. If the
effects of terrorist attacks and geopolitical conditions
adversely impact the financial condition of the airlines, our
lessees might not be able to meet their lease payment
obligations, which would have an adverse effect on our financial
results and growth prospects.
As a result of the September 11, 2001 terrorist attacks in
the United States and subsequent terrorist attacks abroad,
notably in the Middle East, Southeast Asia and Europe, increased
security restrictions were implemented on air travel, airline
costs for aircraft insurance and enhanced security measures have
increased, and airlines in certain countries continue to rely on
government-sponsored programs to acquire war risk insurance. In
addition, war or armed hostilities in the Middle East, North
Korea or elsewhere, or the fear of such events, could further
exacerbate many of the problems experienced as a result of
terrorist attacks. The situation in Iraq continues to be
uncertain, tension over Iran’s nuclear program continues,
fighting in the Gaza Strip between Hamas and the Israeli army
significantly raised tension in the Middle East in early 2009,
and any or all of these may lead to further instability in the
Middle East. The recent attacks in Mumbai have also raised
tensions in South Asia. Future terrorist attacks, war or armed
hostilities, or the fear of such events, could further
negatively impact the airline industry and may have an adverse
effect on the financial condition and liquidity of our lessees,
aircraft values and rental rates and may lead to lease
restructurings or aircraft repossessions, all of which could
adversely affect our financial results and growth prospects.
Terrorist attacks and geopolitical conditions have negatively
affected the airline industry and concerns about geopolitical
conditions and further terrorist attacks could continue to
negatively affect airlines (including our lessees) for the
foreseeable future depending upon various factors, including:
(i) higher costs to the airlines due to the increased
security measures; (ii) decreased passenger demand and
revenue due to the inconvenience of additional security
measures; (iii) the price and availability of jet fuel and
the cost and practicability of obtaining fuel hedges under
current market conditions; (iv) higher financing costs and
difficulty in raising the desired amount of proceeds on
favorable terms, or at all; (v) the significantly higher
costs of aircraft insurance coverage for future claims caused by
acts of war, terrorism, sabotage, hijacking and other similar
perils, and the extent to which such insurance has been or will
continue to be available; (vi) the ability of airlines to
reduce their operating costs and conserve financial resources,
taking into account the increased costs incurred as a
consequence of terrorist attacks and geopolitical conditions,
including those referred to above; and (vii) special
charges recognized by some airlines, such as those related to
the impairment of aircraft and other long lived assets stemming
from the grounding of aircraft as a result of terrorist attacks,
the economic slowdown and airline reorganizations.
Future terrorist attacks, acts of war or armed hostilities may
further increase airline costs, depress air travel demand,
depress aircraft values and rental rates or cause certain
aviation insurance to become available only at significantly
increased premiums (which may be for reduced amounts of coverage
that are insufficient to comply with the levels of insurance
coverage currently required by aircraft lenders and lessors or
by applicable government regulations) or not be available at all.
Table of Contents
Although the United States and the governments of some other
countries provide for limited government coverage for certain
aviation insurance, these programs may not continue nor is there
any guarantee such government will pay under these programs in a
timely fashion.
If the current industry conditions should continue or become
exacerbated due to future terrorist attacks, acts of war or
armed hostilities, they are likely to cause our lessees to incur
higher costs and to generate lower revenues, resulting in an
adverse effect on their financial condition and liquidity.
Consequently, these conditions may affect their ability to make
rental and other lease payments to us or obtain the types and
amounts of insurance required by the applicable leases (which
may in turn lead to aircraft groundings), may result in
additional lease restructurings and aircraft repossessions, may
increase our cost of re-leasing or selling the aircraft and may
impair our ability to re-lease or otherwise dispose of the
aircraft on a timely basis, at favorable rates or on favorable
terms, or at all, and may reduce the proceeds received for the
aircraft upon any disposition. These results could have an
adverse effect on our financial results and growth prospects.
If the effects of terrorist attacks and geopolitical conditions adversely impact the financial condition of the airlines, our lessees might not be able to meet their lease payment obligations, which would have an adverse effect on our financial results and growth prospects. As a result of the September 11, 2001 terrorist attacks in the United States and subsequent terrorist attacks abroad, notably in the Middle East, Southeast Asia and Europe, increased security restrictions were implemented on air travel, airline costs for aircraft insurance and enhanced security measures have increased, and airlines in certain countries continue to rely on government-sponsored programs to acquire war risk insurance. In addition, war or armed hostilities in the Middle East, North Korea or elsewhere, or the fear of such events, could further exacerbate many of the problems experienced as a result of terrorist attacks. The situation in Iraq continues to be uncertain, tension over Iran’s nuclear program continues, fighting in the Gaza Strip between Hamas and the Israeli army significantly raised tension in the Middle East in early 2009, and any or all of these may lead to further instability in the Middle East. The recent attacks in Mumbai have also raised tensions in South Asia. Future terrorist attacks, war or armed hostilities, or the fear of such events, could further negatively impact the airline industry and may have an adverse effect on the financial condition and liquidity of our lessees, aircraft values and rental rates and may lead to lease restructurings or aircraft repossessions, all of which could adversely affect our financial results and growth prospects. Terrorist attacks and geopolitical conditions have negatively affected the airline industry and concerns about geopolitical conditions and further terrorist attacks could continue to negatively affect airlines (including our lessees) for the foreseeable future depending upon various factors, including: (i) higher costs to the airlines due to the increased security measures; (ii) decreased passenger demand and revenue due to the inconvenience of additional security measures; (iii) the price and availability of jet fuel and the cost and practicability of obtaining fuel hedges under current market conditions; (iv) higher financing costs and difficulty in raising the desired amount of proceeds on favorable terms, or at all; (v) the significantly higher costs of aircraft insurance coverage for future claims caused by acts of war, terrorism, sabotage, hijacking and other similar perils, and the extent to which such insurance has been or will continue to be available; (vi) the ability of airlines to reduce their operating costs and conserve financial resources, taking into account the increased costs incurred as a consequence of terrorist attacks and geopolitical conditions, including those referred to above; and (vii) special charges recognized by some airlines, such as those related to the impairment of aircraft and other long lived assets stemming from the grounding of aircraft as a result of terrorist attacks, the economic slowdown and airline reorganizations. Future terrorist attacks, acts of war or armed hostilities may further increase airline costs, depress air travel demand, depress aircraft values and rental rates or cause certain aviation insurance to become available only at significantly increased premiums (which may be for reduced amounts of coverage that are insufficient to comply with the levels of insurance coverage currently required by aircraft lenders and lessors or by applicable government regulations) or not be available at all.
Table of ContentsAlthough the United States and the governments of some other countries provide for limited government coverage for certain aviation insurance, these programs may not continue nor is there any guarantee such government will pay under these programs in a timely fashion. If the current industry conditions should continue or become exacerbated due to future terrorist attacks, acts of war or armed hostilities, they are likely to cause our lessees to incur higher costs and to generate lower revenues, resulting in an adverse effect on their financial condition and liquidity. Consequently, these conditions may affect their ability to make rental and other lease payments to us or obtain the types and amounts of insurance required by the applicable leases (which may in turn lead to aircraft groundings), may result in additional lease restructurings and aircraft repossessions, may increase our cost of re-leasing or selling the aircraft and may impair our ability to re-lease or otherwise dispose of the aircraft on a timely basis, at favorable rates or on favorable terms, or at all, and may reduce the proceeds received for the aircraft upon any disposition. These results could have an adverse effect on our financial results and growth prospects. This excerpt taken from the AYR 10-Q filed Nov 17, 2008. If the
effects of terrorist attacks and geopolitical conditions
adversely impact the financial condition of the airlines, our
lessees might not be able to meet their lease payment
obligations, which would have an adverse effect on our financial
results and growth prospects.
As a result of the September 11, 2001 terrorist attacks in
the United States and subsequent terrorist attacks abroad,
notably in the Middle East, Southeast Asia and Europe, increased
security restrictions were implemented on air travel, airline
costs for aircraft insurance and enhanced security measures have
increased, and airlines in certain countries continue to rely on
government-sponsored programs to acquire war risk insurance. In
addition, war or armed hostilities in the Middle East, North
Korea or elsewhere, or the fear of such events, could further
exacerbate many of the problems experienced as a result of
terrorist attacks. The situation in Iraq continues to be
uncertain and tension
Table of Contents
over Iran’s nuclear program continues, and either or both
may lead to further instability in the Middle East. Future
terrorist attacks, war or armed hostilities, or the fear of such
events, could further negatively impact the airline industry and
may have an adverse effect on the financial condition and
liquidity of our lessees, aircraft values and rental rates and
may lead to lease restructurings or aircraft repossessions, all
of which could adversely affect our financial results and growth
prospects.
Terrorist attacks and geopolitical conditions have negatively
affected the airline industry and concerns about geopolitical
conditions and further terrorist attacks could continue to
negatively affect airlines (including our lessees) for the
foreseeable future depending upon various factors, including:
(i) higher costs to the airlines due to the increased
security measures; (ii) decreased passenger demand and
revenue due to the inconvenience of additional security
measures; (iii) the price and availability of jet fuel and
the cost and practicability of obtaining fuel hedges under
current market conditions; (iv) higher financing costs and
difficulty in raising the desired amount of proceeds on
favorable terms, or at all; (v) the significantly higher
costs of aircraft insurance coverage for future claims caused by
acts of war, terrorism, sabotage, hijacking and other similar
perils, and the extent to which such insurance has been or will
continue to be available; (vi) the ability of airlines to
reduce their operating costs and conserve financial resources,
taking into account the increased costs incurred as a
consequence of terrorist attacks and geopolitical conditions,
including those referred to above; and (vii) special
charges recognized by some airlines, such as those related to
the impairment of aircraft and other long lived assets stemming
from the grounding of aircraft as a result of terrorist attacks,
the economic slowdown and airline reorganizations.
Future terrorist attacks, acts of war or armed hostilities may
further increase airline costs, depress air travel demand,
depress aircraft values and rental rates or cause certain
aviation insurance to become available only at significantly
increased premiums (which may be for reduced amounts of coverage
that are insufficient to comply with the levels of insurance
coverage currently required by aircraft lenders and lessors or
by applicable government regulations) or not be available at all.
Although the United States and the governments of some other
countries provide for limited government coverage for certain
aviation insurance, these programs may not continue nor is there
any guarantee such government will pay under these programs in a
timely fashion.
If the current industry conditions should continue or become
exacerbated due to future terrorist attacks, acts of war or
armed hostilities, they are likely to cause our lessees to incur
higher costs and to generate lower revenues, resulting in an
adverse effect on their financial condition and liquidity.
Consequently, these conditions may affect their ability to make
rental and other lease payments to us or obtain the types and
amounts of insurance required by the applicable leases (which
may in turn lead to aircraft groundings), may result in
additional lease restructurings and aircraft repossessions, may
increase our cost of re-leasing or selling the aircraft and may
impair our ability to re-lease or otherwise dispose of the
aircraft on a timely basis, at favorable rates or on favorable
terms, or at all, and may reduce the proceeds received for the
aircraft upon any disposition. These results could have an
adverse effect on our financial results and growth prospects.
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