DUBLIN, (Reuters) – Airlines are being warned that days of unusually low financing costs are gone. This is due to increased lease rates and changes in how risk management will work after the War in Ukraine.

As investors looked for refuge from low bond yields in higher yielding dollar-denominated tangible assets, such as aircraft, new capital has been poured into the aviation sector over the past decade.

Steven Udvar Hazy (NYSE:) Corp chairman, stated that a low-interest rate in bank accounts and 1% to 2% return on bonds is better for many investors. He spoke at a dinner hosted by the UK Aviation Club in Dublin.

“I believe that this is all changing… From a credit rating perspective, the airline industry did not deserve these rates. Now, I believe the reality is returning; lease rates will rise and interest rates are rising.”

Udvar-Hazy is a founding member of the leasing sector. While still studying in 1973, Udvar Hazy advised Aer Lingus and said that the higher rents would force airlines to absorb more fuel, labor, and other operational costs.

Air Lease reported a loss of $800million last week as a result of the write-off by Russia sanctions-hit jets.

Russia has taken hundreds of jets that were leased from foreign countries after changing laws to prohibit their repossession.

I believe that lessors as well as financial institutions must pay greater attention to such risks. Udvar Hazy stated that this is another reason why (lease rates) will rise.

Because every lender, bank and leasing company that has loaned money or assets Russia to a bank is going to put in an insurance policy on all future transactions. This will cost us all.

Udvar Hazy and other financiers have held large, back-to-back events in Dublin since the pandemic.

According to Rob Morris, the head of Ascend by Cirium’s global consultancy, the lease rate fell by around 30% in the wake of the pandemic, but the market has reached a tipping point. He spoke at the Airline Economics conference.