Boeing Forecasts Increased Funding Needs Utilizing Diverse Sources for 2017 Aircraft Financing
Financing industry to provide approximately $126 billion in aircraft funding in 2017, up $4 billion from 2016
Healthy leasing market, variety of financiers and investors poised to meet most demand
Financing environment has helped absorb impact of lack of export credit in the short-term -- history shows this is not sustainable
SEATTLE, Dec. 9, 2016 – Boeing [NYSE: BA] says strength in the capital markets and innovative funding developments will provide airlines and lessors efficient aircraft financing solutions in 2017.
The ninth annual Boeing Current Aircraft Finance Market Outlook forecasts the sources of financing for new commercial airplane deliveries in the coming year and the industry’s overall delivery financing requirements for the next five years.
“We’re seeing increasingly diverse financier and investor activity in the aircraft financing industry, providing more options to meet most growth in funding needs,” said Tim Myers, president of Boeing Capital Corporation. “Access to commercial bank debt and continued participation from the capital markets in 2017 will allow airlines and lessors to capitalize on the strength of the aviation industry and robust global passenger traffic trends.”
Boeing forecasts continued strong demand for new commercial airplanes in 2017, resulting in about $126 billion in deliveries across the industry with potential to grow to $185 billion by 2021.
“Capitalizing on the growth ahead requires regulations and policies that facilitate the efficiency and stability of the aircraft financing industry. Banking regulations that sensibly value aircraft assets and continued efforts to move toward global standardization of transactions through the Cape Town Convention will help ensure long-term availability of aircraft financing,” Myers said. “Further, while the healthy financing environment has helped to absorb the impact of the lack of export credit in the short-term, history shows this is not sustainable.”
Highlights of the 2017 aircraft finance market outlook include:
- Notable new funding sources are emerging from the Korean institutional market, regional banks throughout Asia Pacific and a rise in non-U.S. investor participation in enhanced equipment trust certificates (EETCs)
- High volume in the leasing industry will allow new lessors to grow their fleets and established lessors to purchase new aircraft
- Commercial bank volume will exceed capital market funding for both Boeing deliveries and the industry overall; this trend is primarily driven by the rising share of deliveries to China, where bank debt is the most prevalent source of financing
The 2017 Current Aircraft Finance Market Outlook is available at www.boeing.com/CAFMO
Certain statements in this release may be "forward-looking" within the meaning of the Private Securities Litigation Reform Act of 1995. Words such as “expects,” “forecasts,” “projects,” “plans,” “believes,” “estimates,” and similar expressions are used to identify these forward-looking statements. Examples of forward-looking statements include statements regarding future demand for airplanes and the airplane financing environment, as well as any other statement that does not directly relate to any historical or current fact. Forward-looking statements are based on current assumptions about future events that may not prove to be accurate. These statements are not guarantees and are subject to risks, uncertainties and changes in circumstances that are difficult to predict. Many factors could cause actual events to differ materially from these forward-looking statements, including economic conditions in the United States and globally, general industry conditions as they may impact us or our customers, and other important factors disclosed previously and from time to time in our filings with the Securities and Exchange Commission. Forward-looking statements speak only as of the date they are made and we undertake no obligation to update or revise any such statement, except as required by law.
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