Aircraft leasing companies voiced confidence in steady jetliner demand, but warned new aviation investors that they may take a painful hit when central banks start unwinding their efforts to stimulate the economy.

Deterred by poor returns elsewhere as interest rates remain at rock bottom, new money has been pouring into aviation in the hope of capturing greater profits thanks to a combination of ample liquidity and demand for jets.

"Established lessors have enjoyed a positive interest rate environment but at the same time, the industry has been a magnet for money," said Steven Udvar-Hazy, chief executive of Air Lease Corp , seen as a founder of the jet leasing industry.

Aviation leasing companies account for up to 40 percent of aircraft being delivered and say they help to smooth swings in the market by renting out jets where demand is strongest. Many have overhauled their balance sheets to avoid new market shocks.

But other investors such as sovereign wealth funds, private equity, real estate firms and non-specialist institutions are increasingly taking an interest in the $100 billion jet market.

"The interest rate environment has been tremendously positive for the leasing community and airline industry," Udvar-Hazy told the Istat Europe air finance conference in Istanbul on Tuesday. "The counter-effect is that low interest rates have attracted a lot of other investors."

An unofficial gauge of interest was the record attendance at this week's aviation conference, which drew over 1,000 jet traders, manufacturers and financiers to the Bosphorus. Over 40 percent polled in one session said they were attending the annual event for only the first or second time.

It is Europe's version of an even larger U.S. gathering that started out three decades ago as a meeting of a group of second-hand jet sellers, which they nicknamed the "Junkdealers' Ball".

Now, worldwide meetings of the International Society of Air Transport Aircraft Trading support an ecosystem with financial solutions for every part of the aircraft business, from loans for new jets to selling and leasing back their spare parts.

"Five years ago, there would probably be 300 or 400 people in this room. We are closing on 1,100, so clearly there is interest in this space," said Jeff Knittel, president of CIT Transportation and International Finance .

'WINNERS AND LOSERS'

The arrival of upgraded, more efficient airliners has sparked sales of thousands of Airbus and Boeing jets, but delegates said cheap money had helped to keep the party going.

The Federal Reserve has kept interest rates near zero for more than five years, and this month said it will keep them there for a considerable time even after it ends its historic bond-buying program, which is to be wound down soon.

Debt markets are not pricing in a U.S. rate rise before the second half of 2015, but aviation financiers are beginning to think about what happens when the tide turns.

"The entire economy including airlines have got very used to low interest rates and no matter how (Federal Reserve Chair) Janet Yellen manages this process, I think it is going to be difficult and there will be winners and losers," said Peter Barrett, chief executive officer of SMBC Aviation Capital.

The risks are not limited to financiers but airlines that have placed risky bets for aircraft, he said.

"If it is a gradual, predictable rate of change I think we can all cope with it... If it is radical we are all going to have to put on our seat belts," Udvar-Hazy said.

Despite recent order cancellations and instability in the Middle East and Ukraine, manufacturers and most lessors say the aircraft market itself remained strong. But they could not agree whether there was room for further growth in an industry regularly subject to external effects such as wars or epidemics.

Udvar-Hazy said there was strong demand and limited availability of the industry's benchmark narrow-body jets.

But Philip Scruggs, president of AerCap , the world's second-largest lessor, said the market had reached its top.

Even for those confident the jetliner market will remain strong barring an abrupt rate hike or a deepening of China's economic slowdown, there are differences over how quickly Airbus and Boeing should raise production to meet that demand.

Udvar-Hazy said he was worried about their ability to keep raising output without putting further pressure on their supply chains, amid shortages of items such as galleys and seats.