Boeing forecasts first $100 billion aircraft finance market

Tue Dec 4, 2012 12:38pm EST

* Global jet sales value seen around $104 bln in 2013

* Boeing, Airbus account for 95 percent of sales

* Sales to hit $132 bln by 2017

NEW YORK, Dec 4 (Reuters) - Buyers of commercial jetliners are likely to draw more financing from capital markets in 2013, as the value of jet sales rises about 9.5 percent to a record $104 billion, Boeing Co said Tuesday.

Capital markets will account for about 14 percent of total jet financing, up from 10 percent this year, Boeing said in an annual forecast. About 95 percent of the total is divided between Boeing and Airbus.

The credit markets are filling a gap caused by diminished lending by export-credit agencies, which will finance only about 23 percent of total sales in 2013, down from 30 percent this year, the report said.

Buyers also will rely more on commercial banks, the report said.

The share of financing by commercial banks is expected to grow to 28 percent from 21 percent, with cash purchases staying steady at about 25 percent of the total.

"This year began amid concerns that Europe's commercial banks, a primary aircraft financing source, would pull out of the market due to the continent's economic crisis," said Kostya Zolotusky, managing director of capital markets development at Boeing Capital Corp.

But the fears did not materialize, and Boeing expects Europe's banks will remain active in 2013 because the aircraft finance "is one of the most attractive and high-performing sectors for bank investments," Zolotusky said.

Regional commercial banks in China, Japan, Australia, the Middle East and North America also either entered or got back in to aircraft financing in 2012 and are expected to be active 2013.

The added financing by banks and capital markets "is necessary to gradually reduce reliance on export credit as higher fees and equity requirements" required by new rules take effect, he said.

2012 2013 2014 2015 2016 2017 $95 bln $104 bln $116 bln $125 bln $128 bln $132 bln Source: Boeing Capital

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