Boeing Says Financiers Should Embrace Shifts as Aircraft Financing Rises

Tue Mar 12, 2013 11:00pm EDT

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- Expected $100 billion plus in deliveries creates opportunities, need to adjust
ORLANDO,  March 12, 2013  /PRNewswire/ -- Boeing (NYSE: BA) said that as
worldwide commercial aircraft production expects to surge past  $100 billion  in
2013, the business of providing airlines with delivery financing is shifting
significantly, providing greater opportunity and requiring the need to adjust.

"Aircraft financing finds itself in an enviable position where interest in
investing is high as is the flow of new dollars into financing. At the same
time, we're seeing significant shifts in the financing strategies for how
airlines pay for their airplanes," said  Tim Myers, vice president/general
manager for Aircraft Financial Services at Boeing Capital Corp., the aircraft
builder's financing and leasing unit.  

Myers spoke on an aircraft financiers' panel at the annual ISTAT Americas
conference for global professionals working to connect commercial aircraft
financing needs with those seeking aircraft investments.

"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. That means all of us have
to roll up our sleeves and prepare to embrace this new world," Myers said.

Traditional sources for jetliner financing include  Europe's commercial banks
recently as well as government-backed export credit agencies like the
Export-Import Bank in the U.S.  Going forward, Boeing expects more geographic
diversity in banking investments, and continued strong interest by bond
investors seeking aircraft-backed assets. Meanwhile, airlines increasingly are
leasing new airplanes to lower ownership costs and help cash flows.

"We can expect to see a much greater role for capital markets as they increase
their scope.  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.  It also means
recognizing that commercial bank debt is going to be coming from more diverse
places like  Japan,  Australia  and the US. It means, as well, recognizing that
airlines will be leasing airplanes more than buying," Myers said.

Boeing responded positively to comments by conference speakers about new
opportunities associated with wide-bodied aircraft leasing.  

"The penetration of wide bodies has got deeper with more operators flying them
than any time in the last 40 years.  Today's wide bodies have liquidity value
that is attracting smart money and is made possible by their ubiquity and a
strong global appetite for the assets.  Also, tighter competition in the narrow
body sector is requiring some lessors to look at the less crowded widebody
market.  We expect a lot more lessor investment in wide bodies over the next
decade," said Myers.

SOURCE  Boeing

John Kvasnosky, Communications, Boeing Capital Corp., Office: +1-425-965-4057,
Mobile: +1-206-898-9528,

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