United Airlines plans to continue financing deliveries of its aircraft using EETCs over the next few years.
Speaking during a panel discussion at the ISTAT Asia conference in Hong Kong today, the US carrier's managing director of corporate finance Ted North said that the large volume of planned deliveries made it difficult to rely on the bank market for financing.
"With our fleet plan coming up, we realised that we're probably going to need to do an issuance every year and supplement that with bank debt," says North.
The longer tenure of EETCs is favourable compared with lease financing, particularly as United keeps its aircraft to the end of their service lives.
North also called on foreign carriers to jump into the EETC market "to the extent that they can", as it would help investors to diversify their credits away from the large US carriers.
"Right now, American Airlines is a very large issuer, we're a big issuer as well, and just to keep the interest in the investors, they want to see the supply come in, they want to be able to diversify to other credits," he adds.
During the same panel debate, Thai Airways finance chief Narongchai Wongthanavimok said the EETC structure "seems to look interesting", but he acknowledges that it would be difficult to use it to fund the airline's deliveries as the aircraft were acquired during a "hot time".
Source: Cirium Dashboard