Fri, May 16, 2008
Worldwide Deliveries Compensate For US Slump
There was a time when weakness in
the US financial industry would have meant a downturn in aircraft
sales worldwide. Now, as US lenders pull back and lick their
sub-prime mortgage wounds, financiers in other nations are stepping
in.
Kostya Zolotusky, director of capital markets development for
Boeing Capital, tells Dow Jones aircraft financing conditions
worldwide remain strong, even as US capital markets and
private-equity firms sit on the sidelines.
Zolotusky says investments from US hedge funds and capital
markets now account for only about five percent of the global
aircraft lending market, with wealthy banks and sovereign funds in
China and the Middle East picking up new business which once went
to US interests.
He adds European banks are still lending on aircraft, and
providing financing at favorable costs, in line with historical
rates at about six-to-seven percent.
As a result, he says, backlogs at Boeing and Airbus remain
strong, thanks to growing air travel in emerging markets and demand
from established airlines for more modern, fuel-efficient fleets.
Strong aircraft resale value and increasing global uniformity in
the terms under which aircraft are bought and leased are said to be
making aircraft attractive investments.
Zolotusky adds Boeing itself is prepared to finance aircraft
purchases for customers, but so far has seen no need to do direct
financing. "We've looked at the aircraft orders we have on the
books through 2010... we don't see any sales where we would have to
step in."
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