Regional manufacturers move away from ECA funding

Tokyo
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Regional aircraft manufacturers are focusing on alternative sources of financing outside of the export credit markets.

"I believe there is a negative correlation between residual values and an over reliance on export credit agency (ECA) financing, so I think it is very important that there is a liquid financing market to support a commercial aircraft programme," said John Slattery, chief commercial officer of Embraer, at the ISTAT conference in Tokyo.

Last year 18% of Embraer's deliveries were financed by the ECAs, "which is significantly lower than Boeing and Airbus", he says. The balance was financed by operating lessors, through a combination of orders and sale and leasebacks, says Slattery.

According to Chet Fuller, head of sales at Bombardier, the airframer has a "much larger dependence" on ECA support than Embraer but that is changing. "When Embraer went into the larger aircraft, it brought its customer base, and that helped the manufacturer move away from export credit and that will be our intention going forward. "

The focus for the manufacturer is on operating leases. "We continue to expand our base of operating lessors for the CRJs as well as the Q400," he said, admitting the CRJ platform suffered in the past from "customer concentration with too few customers in North American and Europe."

Export credit agencies are "very important to us" said Yugo Fukuhara, director of marketing at Mitsubishi Aircraft Cooperation. However, he admits the Aircraft Sector Understanding, which came into effect this year "is complicated."

"We are trying to develop our market value as quickly as possible so we can establish other funding sources," he says.