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Why leasing could become the financial engine of advanced air mobility

Why Leasing Could Become the Financial Engine of Advanced Air Mobility
Praveen Vetrivel, CEO of SLI—the aerospace investment arm of the Libra Group—brings nearly two decades of experience in shaping and financing aviation enterprises. With a strategic focus on emerging technologies such as electric aircraft, autonomous cargo drones, and next-generation propulsion systems, Vetrivel is positioning SLI at the forefront of aviation’s next evolution. His prior role in building helicopter lessor LCI into a global player, overseeing transactions exceeding $12 billion before its sale to Japan’s Sumitomo Mitsui Finance and Leasing Co (SMFL), underscores his deep expertise in this rapidly evolving sector.
SLI has already placed orders with innovators like Beta Technologies and Elroy Air, while actively evaluating other manufacturers as it prepares for the future of advanced air mobility (AAM). In a recent discussion, Vetrivel elaborated on why leasing could serve as a pivotal mechanism for the sector, the commercial opportunities that lie ahead, and the challenges that must be addressed.
A Logical Progression to Advanced Air Mobility
Libra Group’s entry into AAM represents a strategic evolution that began with a shift from shipping to aircraft leasing in 2003, leveraging the similarities between these asset classes. After successfully exiting its initial aviation portfolio just before the financial crisis, Libra re-entered the market in 2009 with widebody aircraft and later expanded into freighters. By 2010, the company had begun exploring adjacent sectors such as engines, simulators, and helicopters, eventually building LCI into a substantial business. Vetrivel describes the emergence of eVTOL and advanced air mobility as “the most compelling answers” to the question of what comes next, characterizing this development as a logical progression rather than a series of abrupt leaps.
Leasing as a Catalyst for Commercialization
Leasing, according to Vetrivel, is particularly well-suited to the introduction of emerging aviation technologies. Lessors can absorb early-mover risk and structure financing arrangements with discounted purchase prices, thereby unlocking value for asset owners, manufacturers, and operators alike. He highlights that “being a first-mover lessor creates advantages that compound over time,” citing the accumulation of proprietary data on utilization, maintenance, and residual values. For operators, leasing mitigates technology risk in a rapidly evolving sector, enabling them to transition to newer assets without the burden of outdated technology.
Building the Financial Infrastructure for AAM
Despite its promise, the leasing model faces significant challenges within the AAM sector. Regulatory hurdles, high initial capital costs, and the absence of a mature financial ecosystem—such as operating leases, Enhanced Equipment Trust Certificates (EETCs), and asset-backed securities (ABS) structures common in commercial aviation—pose obstacles to rapid growth. The market’s response has been one of cautious optimism: while leasing offers flexibility and a potentially cost-effective alternative to outright ownership, concerns about regulatory approval and the pace of infrastructure development temper enthusiasm.
Established aviation leasing companies are responding by enhancing their leasing offerings and forming strategic partnerships to address these challenges and capture market share. Vetrivel emphasizes, “We are trying to accelerate the development of financial infrastructure around these asset classes,” recognizing that a robust ecosystem is essential for AAM to scale effectively.
Looking Ahead
As advanced air mobility approaches commercial viability, leasing is positioned to become a key financial engine for the sector. Its success, however, will depend on overcoming regulatory and financial barriers, as well as the industry’s capacity to adapt to rapid technological change. For now, leasing remains a promising, albeit complex, pathway to unlocking the full potential of next-generation aviation.

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