Boeing sees continued growth of aircraft financing to $143 billion in 2019

Funding for jet deliveries to be balanced between commercial bank debt and capital markets and cash

Boeing, the largest US exporter, has urged both governments to resolve their trade differences and protect aerospace, which generates about an $80 billion annual trade surplus for the US. AFP

Boeing expects stable and diversified growth in aircraft financing next year as new investors enter the market to fund new jet deliveries.

The US plane maker forecasts about $143 billion in new commercial aircraft deliveries by major plane manufacturers in 2019, up from $126bn in 2018, with a potential to grow to more than $181bn by 2023, Boeing said in its annual Current Aircraft Finance Market Outlook. Funding for deliveries is expected to be balanced between bank debt, capital markets and cash.

"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, the financing arm of the largest US exporter. “We expect another year of balanced funding for commercial airplane deliveries in 2019."

Boeing's January to October tally of jet orders totals of 821 gross and 642 net orders, according to the most recent data available on its website. Amid a tit-for-tat trade war between the US and China, Boeing's biggest overseas market, the company says Chinese demand has slowed but Boeing has “not yet” seen an impact on Chinese sales and lease-backs, Bloomberg reported, citing Richard Hammond, vice president at Boeing Capital.

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In the Middle East, the main sources of Boeing aircraft financing in 2018 is primarily bank debt followed by sale-leaseback and cash, the Boeing market outlook showed.

Arabian Gulf carriers, who make up some of Boeing's biggest customers, have seen their earnings dented by higher oil prices  this year. Dubai-based Emirates, the biggest operator of Boeing 777 jets globally, said it expects a tough six months ahead after reporting a 86 per cent decline in first-half profits on higher fuel costs and unfavourable currency movements.

"Consistent passenger growth, along with the continued health of the air cargo market, is allowing the industry to grow efficiently despite oil price headwinds and the rising US interest rate environment," Boeing said.

"2019 is expected to be another year of strong and efficient liquidity from diverse markets."