Boeing is expecting expanding use of export credit and debt to finance aircraft deliveries, as it predicts that recovering production and travel will drive the need for financing almost back to pre-crisis levels this year.
It is forecasting industry delivery funding, covering the main commercial aircraft types, at $94 billion this year, substantially up from $69 billion in 2022 – of which 35% was cash.
Boeing says cash made up 54% of funding for its deliveries last year, adding that this resulted from customers’ de-leveraging efforts and strong performance.
But while cash will continue to be a “significant part” of delivery financing, Boeing believes bank debt, export credit and use of capital markets will increase. Export credit agencies backed nearly 5% of the airframer’s deliveries last year.
Bank debt and export credit growth will be correlated to international and widebody deliveries, it states.
“With production and delivery increases and the re-opening of certain regional markets, we forecast aircraft financing needs to reach near pre-pandemic levels in 2023,” says Boeing vice-president of customer finance Rich Hammond, as the airframer unveiled its latest commer aircraft finance market outlook.
Boeing stresses that market fundamentals are “strong” and is optimistic over the financing environment, adding that aircraft investors and financiers are “well-positioned” for the post-pandemic recovery.