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 April 14, 2014

Business: U.S. Navy looks to leverage submarine work to keep costs down - The U.S. Navy hopes to save money and time by leveraging industry investments as it replaces its Ohio-class nuclear-armed submarines with the Virginia-class attack submarines now built by General Dynamics Corp and Huntington Ingalls Industries Inc.  Study raises red flags on California aerospace...
 
 

News Briefs April 14, 2014

U.S. Navy destroyer Zumwalt christened in Maine The U.S. Navy has christened the first ship of its newest class of destroyers, a 610-foot (186-meter)-long warship with advanced technologies and a stealthy design that will reduce its visibility on enemy radars. The warship bears the name of the late Adm. Elmo ìBudî Zumwalt, who became the...
 
 
Navy photograph by Seamn Edward Guttierrez III

Russian aircraft flies near U.S. Navy ship in Black Sea

Navy photograph by Seamn Edward Guttierrez III Sailors man the rails as the Arleigh Burke-class guided-missile destroyer USS Donald Cook arrives at Naval Station Rota, Spain, Feb. 11, 2014. Donald Cook is the first of four Arle...
 

 

45th Space Wing launches NRO Satellite on board Atlas V

The 45th Space Wing successfully launched a United Launch Alliance Atlas V rocket from Space Launch Complex 41, Vandenberg Air Force Base, Calif., at 1:45 p.m. April 10 carrying a classified national security payload. The payload was designed and built by the National Reconnaissance Office. “I am proud of the persistence and focus of the...
 
 

U.S. Air Force selects Cubic for Moroccan P5 air combat training system

Cubic Defense Systems, a subsidiary of Cubic Corporation announced April 11 it has been awarded a contract valued at more than $5 million from the U.S. Air Force to supply its P5 Combat Training System to the Moroccan Air Force. Morocco will join the United States Air Force, Navy, and Marine Corps, along with a...
 
 
Lockheed Martin photograph

NASA’s Orion Spacecraft powers through first integrated system testing

Lockheed Martin photograph Engineers in the Operations and Checkout Building at NASA’s Kennedy Space Center in Florida, perform avionics testing on the Orion spacecraft being prepared for its first trip to space later this ye...
 




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>