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The annual Boeing Current Aircraft Finance Market Outlook (CAFMO) evaluates and 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. The CAFMO also explores the trends within major funding sources and the potential impact on the broader market.
“The aircraft financing market remains healthy, with adequate commercial liquidity, providing a wide range of efficient options available for our customers,” said Tim Myers, president of Boeing Capital Corporation. “We expect another year of balanced funding for commercial airplane deliveries in 2019, mirroring the broader industry, primarily split between bank debt, capital markets and cash.”
Boeing forecasts continued strong demand for new commercial airplanes in 2019, resulting in about $143 billion in deliveries by major manufacturers, with potential to grow to more than $180 billion by 2023.
“Driven by a growing understanding of aviation’s strong growth potential and the industry’s attractive returns, we continue to see new innovations and entrants into the market, providing increased capacity for funding new deliveries as well as pre-delivery payments, mezzanine debt financing and the secondary aircraft market.”
New to this year’s report is the addition of the secondary aircraft financing market as well as expanded analysis of other funding sources such as the leasing community, tax equity and the insurance market.
Highlights of the 2019 CAFMO include:
• Funding for deliveries is expected to be balanced between commercial bank debt and capital markets and cash
• Airlines and lessors are expected to have some of their lowest historical costs of financing
• Capital markets continue to grow, bolstered by unsecured borrowing
• Aircraft leasing has grown to represent more than 40 percent of in-service commercial aircraft ownership
• Export credit agencies (ECAs), in particular, access to domestic ECAs, remain a small but critical funding source
• Strong industry fundamentals attracting more participants and investment in new deliveries and the used aircraft market
The full 2019 CAFMO is available at www.boeing.com/CAFMO, along with additional data on regional-specific financing trends and global financing markets.