DVB Bank: Export Credit Agencies the key to avoid a funding gap for aircraft deliveries in 2010
DVB Bank stated (20-Jan-2010) Export Credit Agencies (ECAs) committed USD21 billion to fund Boeing and Airbus aircraft deliveries in 2009 - a record amount covering approximately one third of the USD66 billion in total deliveries during the year. The move essentially eliminated a funding gap and was an almost doubling of commitments compared to 2008. 2010 aircraft deliveries have an estimated value of USD60 billion, but airlines face another challenging fiscal environment, due to "the lack of visibility on the financial markets and the weak operating cash flows". Traditional aviation financiers are not expected to deliver a large increase in their lending activities compared to last year. [more]
DVB Bank: "There are large segments of the market that will happily continue to avoid any liquidity crunch: the 'prime carriers', the airlines of PR China, and the three main passenger carriers in the Middle East have already secured most of the financing for their new deliveries for this year. Nonetheless, the remaining set of aircraft purchasers – representing an estimated USD30 billion – will again seek the assistance of banks and ECAs – the 'lenders of last resort'. Since many banks will still face capital restrictions in 2010, we do not expect a large increase in the lending activities of traditional aviation banks compared to last year. To avoid again a funding gap in 2010, the ECAs would have to provide as much support as last year," Bertrand Grabowski, Member of the Board of Managing Directors. Source' DVB Bank, 20-Jan-2010.