Boeing has repeated its assurances of a year ago that finance requirements to cover deliveries in the next 12 months are manageable, although it concedes that proportionally, government backed funding will be greater in 2010.
At the end of 2008, Boeing Capital was forthright in its views that despite the world banking crisis there would be sufficient funds to support the industry's deliveries.
This contradicted the perceived wisdom of many "experts and pundits", some of whom were predicting a $20 billion shortfall, says BCC managing director of capital markets Kostya Zolotusky.
"We had a view which many people thought was exasperatingly exuberant. We are gratified how the year has unfolded in line with our forecast and we expect a similar and still manageable aircraft financing environment in 2010."
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Boeing expects that in 2010 $68 billion worth of airliners will be delivered by itself and Airbus, Bombardier and Embraer - a fall of around 8% on 2009's $62 billion due to reduced production rates.
Zolotusky concedes that the financing market will "continue to be difficult" in 2010, but "the gap expectations are similar, if not a bit less, than what we saw in 2009". He expects the financing "gap" - ie the amount that the airframers will need to find - will amount to up to $2.5 billion.
Boeing predicts export credit agency funding, which ballooned to $21 billion in 2009 from $12.5 billion the year before, will reduce slightly to $20 billion in 2010. However, because of the drop in deliveries, proportionally this is an increase of a couple of percentage points to around one-third of the entire financing requirement.
One area of financing that will show significant decline in 2010 is from the lessors, falling by more than a quarter from $9 billion to $6.5 billion. Zolotusky says that the banking crisis has reduced the amount of unsecured borrowing by lessors such as International Lease Finance and GE Commercial Aviation Services from their parent organisations. "The crisis has created a generational shift in the leasing space where there's almost nobody raising a significant amount of capital unsecured, so they're going to the traditional sources of aircraft finance."
Source: Flight International
