Boeing stated (12-Mar-2013) the business of aircraft delivery financing is “shifting significantly”, as global commercial aircraft production is expected to surpass USD100 billion in 2013. Boeing Capital Corp VP/GM for aircraft financial services Tim Myers said the company is “seeing significant shifts in the financing strategies for how airlines pay for their airplanes". Mr Myers added that “most of these shifts in the long term are very positive for the industry. However, in the near term, we should expect the need to adjust to ensure that the financing transition for airlines occurs smoothly”. Boeing expects more geographic diversity in banking investments, and continued strong interest by bond investors seeking aircraft-backed assets. Boeing expects the shift toward the public market will require an adjustment of how the industry manages delivery financing, including partnering with new constituents like the rating agencies and fund managers. Mr Myers said “airlines will be leasing airplanes more than buying” to lower ownership costs and help cash flows. [more - original PR]
Boeing sees significant shift in aircraft delivery financing
You may also be interested in the following articles...
Iran CAPA Aviation Summit – hope turns to frustration, but optimism remains as growth abounds
When CAPA – Centre for Aviation held its first conference in Iran at the end of Jan-2016 the atmosphere was primarily one of optimism. Immediately preceding the conference the expectation was that Iran and the West would move to rapidly reverse decades of estrangement. The first round of sanctions against Iran had come down – in line with the historic 2015 Joint Comprehensive Plan of Action (JCPOA) nuclear agreement reached between Iran and the ‘5+1’ powers – and major airlines and aircraft manufacturers were coming to the table.
While it was acknowledged that progress on major deals was not going to happen overnight, the hope was that as layers of sanctions came down, Iran would be embraced by the rest of the world. In return, Iran was expected to open itself up progressively to foreign trade and investment, and to travel.
The road ahead was perceived to be one that was both a very different, and far easier, one than the one Iran had already travelled. Aviation in particular was a sector that was expected to shine and lead the way for a new era for the country.
Hawaiian Airlines: cost creep casts a slight shadow over a favourable PRASM performance
Hawaiian Airlines’ geography has been a boon for the airline throughout 2016 as the company’s unit revenue performance has outpaced that of its peers. Hawaiian has benefitted from immunity to the lack of pricing traction in many domestic markets on the US mainland, and rational capacity deployment on is largest North American routes.
The company expects to continue posting a unit revenue outperformance for the remainder of 2016, driven by still favourable capacity trends in its markets. Hawaiian’s own capacity growth is expected to fall between 3% and 4% for 2016, and remain in the low- to mid- single-digit range for the foreseeable future.
Although Hawaiian continues to outperform the industry in unit revenue, the company is facing inflated unit costs in 2016 driven by several factors, including increased compensation and technology investments. The airline is also in the middle of pilot negotiations, and has acknowledged additional cost headwinds once a new collective bargaining agreement is reached.