Empirical Aircraft Asset Pricing

Abstract

It has been a long-established thought and rumor of the industry that aircraft asset investment returns are moderate with lower volatility compared with other asset-backed classes. No systemic, rigorous comprehensive empirical study with real historical data has been done to substantiate this mere hypothesis and this research intends to fill that gap through the hand-collected data set. Previous thoughts have been incomplete based on sample sets too small, short, biased, or based on non-publically available proprietary data sets that have not been conducted with the scientific rigor to make convincing augments and conclusions. There are gaps in the academic literature that can be filled by examining empirical analysis especially in regards to aviation through analysis of 21-year historical representation of the aircraft asset class and construction of various indexes to test the current theories on shocks and examine the effects and characteristics before and after the 2008 global financial crisis.