Strong outlook for aircraft financing – Boeing

Demand for new fuel-efficient aircraft is driving new financing
Demand for new fuel-efficient aircraft is driving new financing options

Airlines are expected to be able to secure financing for their new aircraft purchases in the coming years, according to Boeing.

Demand for aircraft is currently high, with airlines investing in new fuel-efficient models, and production rates at all-time highs. And Boeing’s financing and leasing unit, Boeing Capital Corp, said that the market for financing these new aircraft is just as buoyant.

And with a surge in orders from emerging markets, financing is being increasingly provided by smaller local financiers.

“We’re seeing growth in Japan, Russia, China and Latin America,” said Tim Myers, vice president of Aircraft Financial Services at Boeing Capital Corp. “In the Middle East, for example, 65% of Boeing’s deliveries are now being financing by local Middle East banks

“It reflects a remarkable global diversification that would not be possible if the markets didn’t have a fundamental belief in the strength of the air-travel market and the product value of new, fuel-efficient airplanes as fuel prices remain high.”

This regional financing, among other factors, is creating a “rare balance”, according to Boeing, between primary delivery financing sources such as leasing companies, commercial banks, the capital markets, export credit agency (ECA) support and private equity and hedge funds.

Global aircraft deliveries are expected to be worth approximately US$112 billion in 2014.

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