TRIP presses Lula for better regional fleet finance

-
Source:
This story is sourced from Pro
See more Pro news »

Brazilian carrier TRIP's chief, Jose Mario Caprioli, has asked the country's president to improve financial support for the renewing regional aircraft fleets.

In a meeting with president Luiz Inacio Lula da Silva last week, Caprioli pointed out that there was a need to "vastly" increase the country's regional fleet, but that obtaining finance remained a "major challenge".

Caprioli complains that it is much easier to secure loan facilities for larger jet aircraft, which are backed a more liquid international financial market, but that hardly any financial institutions specialise in the regional sector.

"Because of the structure of additional guarantees required, a regional airline needs to employ up to five times more of its own cash flow and financial resources to finance aircraft than [an airline] buying larger jets," Caprioli claims.

He is proposing Government-sponsored grants which would enable lenders to finance 100% of the value of the aircraft, without draining the airline's own resources.

TRIP and Azul were among the first domestic carriers to benefit from development bank BNDES' new financial facilities for airlines acquiring Embraer aircraft.

US carrier SkyWest has also provided essential financial backing by acquiring a minority share in TRIP, providing the Brazilian carrier with the necessary funds for pre-delivery deposits for its Embraer and ATR orders.

President Lula committed earlier this year to the Brazilian association of regional airlines to make support of regional aviation a Government priority.