Chinese banks to continue to focus on domestic funding

London
Source: Flightglobal.com
This story is sourced from Flightglobal.com

Chinese banks are unlikely to look beyond their borders when funding aircraft deliveries in 2013, says Kostya Zolotusky, Boeing Capital managing director capital markets, leasing.

"Chinese banks will continue to be a primary source of funding for Chinese carrier deliveries," he tells Flightglobal.

"We started 2012 with some real concerns because China was going through a tightening of its monetary policy and lots of Chinese carriers were looking abroad for the financing of their deliveries," he says. "However since mid-year, China has loosened its monetary policy in a response to slowing of its economy. We believe this will be for the foreseeable future which will lead to significant liquidity from Chinese banks to support Chinese airlines."

Chinese airlines will be taking $6-8 billion worth of aircraft this year, according to Boeing. "That is a sizeable piece of commercial debt that will be provided by Chinese banks," says Zolotusky.

According to him, the way China manages its economy and its monetary policy makes it hard for the region to "expand significantly" its lending capabilities to airlines that are not involved in China. "Where they [Chinese banks] will participate in the global market of aircraft is through their leasing platforms and those are likely to be with global players."