Boeing Co. is forecasting strong demand for new commercial airplanes will continue in 2019, with deliveries by major OEMs totaling about $143 billion, and growing to $180 billion by 2023. The commercial-aircraft market’s strong fundamentals also are drawing new participants and investment in used aircraft.
The figures and projections are presented in Boeing’s yearly Current Aircraft Finance Market Outlook report, a five-year forecast of the commercial aircraft sector’s financing trends.
“The aircraft financing market remains healthy, with adequate commercial liquidity, providing a wide range of efficient options available for our customers,” stated Tim Myers, president of Boeing Capital Corp. “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 predicts that new-aircraft deliveries will be funded by commercial bank debt, capital markets, and cash.
The report also includes an outlook for secondary aircraft financing, and analysis of the factors shaping aircraft leasing, tax equity, and insurance.
Aircraft leasing agents, which represent over 40% of commercial aircraft ownership now, will be supported by historically low financing costs.
Export credit also will remain a critical funding source, particularly in the U.S., Boeing added.
Myers added that the growth in aircraft demand will lead to finance "innovations" as well as new lenders increasing funding new deliveries, pre-delivery payments, mezzanine debt financing and the secondary aircraft market.