In the latest article from Fexco, Catherine Hayes (CH), finance manager at Fexco Aviation Services (FAVS), and Mary Troude (MT), customer success manager at Pace, discuss collaboration between Fexco’s aviation businesses and how combining expertise in risk management better supports mutual customers in the aviation value chain.
Supporting new businesses
MT: Catherine, FAVS has built a reputation for expertise across a broad spectrum of aviation finance structures. How do you keep informed on the complexities of the sector to ensure you are providing the right guidance for new clients?
CH: Well Mary, a cornerstone of our approach is close collaboration with a wide network of local counsel, audit firms, tax advisers, and other aviation professionals. We don’t have every answer, but we believe that our strong working relationships form a genuine multidisciplinary perspective which ensures clients receive balanced and pragmatic advice that aligns with the unique demands of each deal.
MT: How do you find new clients and communicate this strength in depth?
RM Block
CH: For such an enormously valuable sector measured in financial terms, aviation is driven by a very tight network of participants. Referrals and reputation are key. At FAVS we believe that is a combination of our team’s experience in real leasing environments and corporate services together with our network that proves invaluable to new clients when assessing structural or transactional matters for new deals.
Risk management – sanctioned territory breaches
MT: At PACE we see this networking effect in action, as we have begun to work closely with established FAVS customers. A big area of overlap is managing risk of sanctioned territory breaches through the visibility of flight activity that PACE provides. How is FAVS expected to support this area of risk?
CH: For aircraft lessors, sanctioned jurisdictions like Russia, Iran, or Cuba present significant financial and legal risks. If an aircraft ends up in one of these regions, recovering it can be extremely difficult. That’s why lessors often include clauses like ‘no Russia’ in their contracts to prevent re-export into these areas.
MT: Okay, and working with underwriters in PACE, we see this complexity on the insurance side.
CH: Absolutely, insurers may dispute claims if an aircraft is stuck in a sanctioned country. We saw this during the Covid-19 pandemic. Lessors couldn’t repossess aircraft, and in many cases, insurers refused to pay out. It triggered a wave of litigation across the industry.
MT: So did client reporting expectations on FAVS change?
CH: Yes, and that’s where PACE has been able to help. In 2022, we started monitoring aircraft movements for a number of clients on the platform, uploading the aircraft from our Warehouse and ABS structures as portfolios and defining the sanctioned jurisdictions we wanted to be alerted about if they flew in or out.
MT: And how do you report this to the stakeholders in the leasing vehicles?
CH: PACE has been a game-changer. We receive alerts within 24 to 48 hours which has saved our team hours of manual tracking each month. We now put that energy into improved customer reporting.
MT: How frequently do you provide that service?
CH: On a monthly basis we build the report with data from PACE. The analysis is then sent to the servicer, investor and directors of the SPV [special purpose vehicle], detailing every flight during the preceding month and highlighting any aircraft that flew into those sanctioned jurisdictions.
MT: And what action is taken?
CH: Well unless any of those flights give reason for concern. For example an aircraft is flown into a new sanctioned jurisdiction which was not disclosed in the initial KYC [Know Your Customer] review at the time of acquisition. There may be no action required from the servicer. A temporary sojourn of a number of days may also be in place. But for FAVS compliance is a key deliverable for the managing agent, as part of our role is to assist in protecting our clients’ assets.
Carbon risk
MT: Risk in aviation finance is continually evolving. At PACE we see carbon emissions becoming a central factor in risk management strategies.
CH: It will be interesting to see whether this begins to affect the SPVS.
MT: Indeed, we see this being driven by intensifying regulatory pressure, investor scrutiny, and evolving customer expectations. Airlines and aircraft operators are now required to account not only for operational efficiency and safety, but also for their environmental footprint, particularly in relation to CO₂ output.
CH: What category of risk is affected?
MT: Carbon exposure is increasingly treated as a material risk – impacting route planning, fleet investment, fuel procurement, and even reputational standing. Proactively managing emissions is no longer optional; it’s a critical lever for long-term resilience and competitiveness in a decarbonising global economy.
CH: We are hearing a lot about changes in the EU-ETS.
MT: Yes, frameworks such as the EU-ETS [EU Emissions Trading System] and Refuel EU are reshaping compliance obligations based around carbon emissions. They are clarifying financial risks tied to carbon emissions performance.
Return to Asset-Backed Securities (ABS)
MT: The ABS markets have seen a strong rebound this year.
CH: Absolutely, and good news for FAVS. The ABS market in 2025 has shown sustained growth, managing to navigate a shifting macroeconomic landscape.
MH: And you have been successful on a number of ABS launches this year?
CH: Yes, FAVS is proud to have been appointed as managing agent to several high-profile transactions so far in 2025 and we are anticipating more ABS deals before year end.
MT: Where is the growth coming from?
CH: Robust investor interest. Despite many challenges, aviation remains a growth market, and as market conditions continue to improve with each new issuance, FAVS anticipates further activity in the aviation ABS space before year-end.
MT: Is it mainly ABS these days for FAVS?
CH: ABS is important, but beyond ABS FAVS supports a wide array of aviation finance structures. From warehouse financing to full lessor accounting and comprehensive cash reporting. We remain fully committed to supporting the dynamic needs of both existing and new clients.
MT: Wow, a really nice way to summarise how Fexco brings together deep operational expertise and cutting-edge technology to support complex aviation ventures.
CH: Exactly Mary. I think through FAVS and PACE it’s clear that we are delivering value at every stage from monitoring aircraft movements to managing multiparty financial structures.
MT: And when our teams collaborate, the results speak for themselves.
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