Airbus expects export credit agency financing to double in 2009

By Max Kingsley-Jones

Airbus expects export credit agency financing of new airliner deliveries this year will reach almost double the level of the boom years before the global financial crisis.

"We are counting a lot on European export credit agencies in 2009 - as Boeing is on the US Ex-Im Bank," says Airbus chief operating officer customers, John Leahy.

Leahy says 2009 will see "a substantial increase" in export credit agency/ExIm Bank financing to "double the level they do at the peak of the market". He adds that Airbus expects about 50% of its deliveries this year will require export credit agency financing, but declines to be specific about the dollar value: "Boeing is talking about preparing an extra billion dollars or so, and we'd be in the same range."

Leahy says that one development of the credit squeeze has been an increase in leasing activity: "About 25-30% of our production goes to lessors. If you're an airline and take an aircraft from a lessor, by definition it comes with financing," he says.

Despite the fall in oil price since last year, which has made it more attractive to airlines to hold on to older, less-efficient aircraft and defer new deliveries in the face of tough trading conditions and financing constraints, Leahy says the market for new aircraft will remain strong: "Even with a slowdown in growth there are always older aircraft in the fleet that need to be replaced. Maybe airlines should do that earlier [than scheduled]."

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