Securing financing for older aircraft equipment remains a problem in a tighter lending market, according to airlines speaking at ISTAT today.
"Problems in the banking market are exasperated in older aircraft financings," said Tom Weir, vice president, treasurer, US Airways.
The availability of financing depends on the "type of aircraft", he adds.
He points to older Airbus A320 and Boeing 737 aircraft as "still being able to work in enhanced equipment trust certificates (EETC) financings", whereas the Boeing 757 "would not be ideal" but maybe better suited for the "sale and leaseback market" as there is "virtually no bank market" for the aircraft type.
Ed McGarvey, vice president, treasurer, Atlas Air, wonders what is considered "old" in today's market. He highlights a recent dealing with a European bank in which the financier agreed to fund a four-year-old asset, but deemed a six-year-old aircraft of the same type as "too old".
Still, Atlas Air was able to recently secure financing for five 767 and 747 aircraft, which were 18-20 years old, but the pool of financing was "very limited", he says.
Gerry Laderman, senior vice president, finance and treasurer, United Airlines, believes the sale and leaseback market would be the best place to find financing for older assets.
However, he admits Continental Airlines could have packaged older aircraft into its recent EETC financing if it wanted to do so.