Business

December 5, 2012

Boeing forecasts sufficient financing for rising global aircraft deliveries

Boeing projects the world’s airlines should see reasonable liquidity and pricing for new-aircraft delivery financing in 2013 even as jet builders ramp up production to meet demand, the manufacturer announced in London, England, Dec. 4 in issuing its fifth annual finance market forecast.

“We expect that despite economic and political challenges, global air travel will again demonstrate its remarkable resilience in 2013. The industry’s global growth and airlines’ fleet replacements, accelerated by higher fuel prices, should keep demand stable and attract sufficient financing,” said Kostya Zolotusky, managing director of capital markets development and leasing at Boeing Capital Corp., the plane maker’s financing and leasing unit which develops the forecast.

The encouraging report comes amid lingering economic uncertainties and as higher costs for eligible airline borrowing using government export credit financing go into effect in 2013.

The manufacturer forecasts total industry jetliner deliveries at $104 billion in 2013, with 95 percent of that expected to be split between Boeing and Airbus.

Boeing foresees 2013 financing conditions on par with 2012, and predicts the largest funding source – commercial banks – should strengthen their investment. Among other major players, capital markets are expected to grow as a funding source for U.S. airlines and expand to also serve non-U.S. airlines and leasing companies. Meanwhile, leasing firms are expected to grow in their delivery share and gain access to more diverse sources of equity and leverage.

This year began amid concerns that Europe’s commercial banks, a primary aircraft financing source, would pull out of the market due to the continent’s economic crisis. However, Zolotusky said those fears did not materialize, and in 2013 the company expects that Europe’s banks will remain active because the aircraft space is one of the most attractive and high-performing sectors for bank investments.

Boeing said regional commercial banks – in places like China, Japan, Australia, the Middle East and North America – stepped back into or entered aircraft financing in 2012 and expect to remain in 2013.

In announcing the need for increased financing for rising industry deliveries, the company said market data clearly supports the higher production pace.

“Aircraft utilization is at record highs as are global load factors. Growth in people traveling is happening faster now that new capacity is being introduced. These are fundamental indicators that show that the aviation market is healthy and perhaps even a little underserved,” said Boeing’s Zolotusky.

The company expects the higher costs and stricter terms for export credit borrowing next year to drive down reliance on government-backed loan guarantees, as their use gradually returns to lower historic rates.

Boeing’s complete 2013 aircraft finance market outlook can be found at www.boeingcapital.com/cafmo.

 




All of this week's top headlines to your email every Friday.


 
 

 

Headlines October 22, 2014

News: Northrop challenges 3DELRR contract award - Northrop Grumman has formally issued a protest against the US Air Force’s decision to award its next-generation ground based radar to competitor Raytheon.   Business: Defense firms prefer GOP, but spread campaign cash between political parties - For every campaign contribution from a major arms manufacturer to a Republican candidate...
 
 

News Briefs October 22, 2014

Military converges on scene of Kansas jet crash Military personnel are investigating at the site in southeast Kansas where an Oklahoma Air National Guard fighter jet crashed after a midair collision with another one during a training exercise. The F-16 crashed Oct. 20 in a pasture about three miles northeast of Moline, an Elk County...
 
 
Courtesy photograph

Upgrades ‘new normal’ for armor in uncertain budget environment

Courtesy photograph The current Paladin is severely under-powered and overweight so its speed of cross-country mobility is pretty restricted. The Paladin Integrated Management program is designed to address a number of these we...
 

 

ISR: A critical capability for 21st century warfare

The progressive adaptations and breakthroughs made in the intelligence, surveillance and reconnaissance arena have changed the way wars are fought, and the way commanders think about the battlespace. “Whether we have airmen exploiting full motion video data or serving downrange in the (Central Command) area of responsibility, these individuals make up an enterprise of 30,000...
 
 

Lockheed Martin teams with Roketsan of Turkey on new standoff missile for F-35

Roketsan and Lockheed Martin signed a teaming agreement Oct. 22 for collaboration on the SOM-J, a new generation air-to-surface Standoff Cruise Missile for the F-35 Lightning II. The SOM system is an autonomous, long-range, low-observable, all-weather, precision air-to-surface cruise missile. The SOM-J variant is tailored for internal carriage on the F-35 aircraft. The companies will...
 
 

Army Operating Concept expands definition of combined arms

The Army Operating Concept, published Oct. 7, expands the idea of joint combined-arms operations to include intergovernmental and special operations capabilities, said Gen. Herbert R. McMaster Jr. The new concept includes prevention and shaping operations at the strategic level across domains that include maritime, air, space and cyberspace, he said. It’s a “shift in emphasis,”...
 




0 Comments


Be the first to comment!


Leave a Reply

Your email address will not be published. Required fields are marked *

You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong>