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Publication type: Master thesis
Title: Is aviation finance part of the asset class infrastructure?
Authors: Erny, Melanie
Advisors / Reviewers: Hohgardt, Holger
Olvany, Brian
DOI: 10.21256/zhaw-23862
Extent: 87
Issue Date: 2018
Publisher / Ed. Institution: ZHAW Zürcher Hochschule für Angewandte Wissenschaften
Publisher / Ed. Institution: Winterthur
Language: English
Subject (DDC): 332.6: Investment
Abstract: The continuously increasing demand for air travel increases funding needs for aircraft. Institutional investors, being exposed to a sustained low yield environment, increasingly pay attention to these needs. Institutional investors’ increasing demand for aviation finance requires classification of the asset class. Classification of an asset is practically relevant as it serves investors in making capital allocation decisions, improving portfolio efficiency and monitoring assets accordingly. Aviation finance shows similar characteristics, physically and economically, to infrastructure. This suggests classifying aviation finance as part of the asset class infrastructure. Infrastructure is a heterogeneous asset, which requires a detailed analysis of its subcategories and investment types. This thesis analyzes aviation finance and infrastructure with its subcategories and investment types. It assesses whether aviation finance is part of the asset class infrastructure and if it is part of any subcategory and investment type of infrastructure. Economic infrastructure consists of the subcategories transport, energy and utilities, and communications. Investment types of interest within these subcategories are airports and toll roads and renewable energy. A theoretical review of the characteristics of aviation finance and infrastructure provide the building blocks to answer the research question. A quantitative part consisting of risk-return, correlation and regression analyses supports the analysis empirically. The equity of aircraft leasing companies and the S&P 500 Airlines Index represent the aviation finance data set. Infrastructure equity indices represent the infrastructure data set. Monthly correlations of returns between aviation finance and infrastructure for the time frame December 2006 to December 2017 are calculated based on historical prices and index levels.
License (according to publishing contract): CC BY-NC-ND 4.0: Attribution - Non commercial - No derivatives 4.0 International
Departement: School of Management and Law
Appears in collections:MSc Banking and Finance

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