Conferences and Speeches

Growth Frontiers Global Tokyo

Tuesday, April 18, 2023 - Wednesday, April 19, 2023

Morgan Lewis is proud to sponsor Airline Economics’ Growth Frontiers Global Tokyo conference—one of the largest meeting places for participants in the global aviation industry. Partner James Bradley moderated the Lessing & Asset Manager Panel.


Airline Economics Growth Frontiers returned to Tokyo, with more than 700 delegates in attendance. Emerging from a post-COVID world, the event highlights Japan’s importance to the aviation financing and leasing sector—an encouraging sign of green shoots in Asia.

The various panels provided key insights into the microeconomic and macroeconomic outlook of both the global aviation and local Japanese markets. On balance, the near-term outlook of the aviation industry appears to be positive, as passenger demand continues to increase with the removal of travel restrictions.

Regional and global recovery is on track but China remains the final brick in the recovery wall. International flights to and from China are still at lower levels from 2019. However, if Chinese travel rebounds, 2024 could be the most profitable year yet for China’s airlines, and American and European carriers—responsible for the bulk of the industry’s profits in recent years.

Original equipment manufacturer (OEM) deliveries are expected to remain below pre-COVID-19 levels and well below presently stated projections. Supply chain issues and labor shortages continue to challenge OEMs and add to near-term capacity shortages. This situation will acutely affect engine manufacturers, as they are unable to ramp up engine production from the low levels reached during the pandemic.

Japanese leasing houses remain cautiously optimistic about the Japanese operating lease (JOL) and Japanese operating lease with call option (JOLCO) market. Headwinds from high borrowing costs and uncertainty in the USD/yen exchange rate have slightly dampened Japanese equity investors’ appetites for JOLCO products. While equity costs remain stable, pricing must be adjusted to offset any adverse effects arising out of the current exchange rate.

Partner James Bradley moderated the Leasing and Asset Manager panel discussing the outlook of the Japanese market, including covering the existing JOL/JOLCO landscape and potential challenges airlines, lessors, and lenders are expected to face as the Japanese domestic and international markets recover.

Toward the end of day one, we connected with industry participants in the Japanese market during a networking session.


Day two covered a wide range of topics, including an air travel forecast, the aircraft trading market, and cargo demand. Airline and leasing company consolidations remain a key theme in aviation, with big mergers being pursued across different regions.

One of the bright spots for airlines during the pandemic has been cargo. Air cargo demand soared between 2019 and 2022 but softened in 2023. That said, currently, air cargo yields remain higher than pre-pandemic.

While elevated inflation and interest rates act as headwinds to economic activity, higher inflation may help support aircraft values and the impact of the increased interest rates on lessors is mitigated by their linkage to lease rates, with floating rates becoming more prevalent. The industry can expect to see more lessors engaging in portfolio sales for turnover, to raise capital to fund new deliveries, or to pay debts.

Recovery in the global aviation industry will likely continue to increase but full global passenger volume is not expected to occur until next year. Many panelists shared the view that continuing geopolitical tensions and interest rate volatility will temper the pace of recovery.

The long-term industry fundamentals for commercial aviation remain firmly in place with forecasts for strong tailwinds to prevail—one in the form of deliveries of more than 10,000 aircraft in the next decade. However, sustainability challenges remain the top long-term priority for commercial aviation, with the industry aiming to be carbon neutral by 2050. So far, sustainable aviation fuel seems a practical way to get there with electric and hydrogen-powered airplanes on the horizon.

Other Events in this Series