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 June 29, 2015

News: SpaceX Falcon 9 explodes moments after launch – A SpaceX rocket carrying supplies to the International Space Station blew up June 28 shortly after liftoff.   Business: How serious a setback is SpaceX rocket explosion? – Elon Musk had never come face to face with that rule before — at least not in space travel —...
 
 

News Briefs June 29, 2015

Iraqi pilot in Arizona plane crash found dead Officials say the body of an Iraqi pilot who had been training in the United States and crashed in southern Arizona has been located. Iraq’s Defense Ministry said June 26 that search teams found the body of Brig. Gen. Rasid Mohammed Sadeeq at the crash site five...
 
 
Huntington Ingalls Industries photograph

PCU John Warner delivered to Navy

Huntington Ingalls Industries photograph A dolphin jumps in front of the Virginia-class attack submarine Pre-Commissioning Unit (PCU) John Warner (SSN 785) as the boat conducts sea trials in the Atlantic Ocean. The U.S. Navy ac...
 

 
navair-helo

HX-21 completes first flight with developmental electronic warfare pod

On June 8, 2015, a UH-1Y from Air Test and Evaluation Squadron (HX) 21 completed the first test flight with a developmental electronic warfare pod.  The pod would represent a new tactical capability for U.S. Marine Corps rotar...
 
 

Northrop, Navy celebrate legacy of EA-6B Prowler

Northrop Grumman photograph by Edgar Mills The U.S. Navy’s last operational EA-6B Prowler, designed and built by Northrop Grumman, lifts off from Naval Air Station Whidbey Island, Wash. in a ceremonial fly-away June 27 from its long time operational base. The Navy is retiring the Prowler after nearly 45 years of service.   The U.S....
 
 
Air Force photograph by Capt. Tania Bryan

NORTHERN EDGE provides environment for testing new capabilities

Air Force photograph by Capt. Tania Bryan Aircraft from test and evaluation squadrons across the Air Force line up on the Joint Base Elmendorf-Richardson flightline. Northern Edge is Alaska’s premier joint training exercise d...
 




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=""> <s> <strike> <strong>