Any new financial crisis could affect business and consumer confidence and cut demand for premium travel as bankers and other high-value customers rein in spending, putting pressure on airline profitability and jet demand, executives said. Aviation is also widely seen as vulnerable to any downturn in an economy already scarred by inflation, with United Airlines shares falling this week after it signaled demand during off-peak months was waning. Still, Boeing forecasts drawn up before this week's chill in the banking sector, and published on Wednesday, suggest airlines will absorb $94 billion in delivery funding this year, close to $98 billion seen in 2019 and well above $69 billion last year. Boeing said it was seeing increased interest from financiers and investors to aid commercial airplane deliveries.
Cash continues to be a significant source of funding as
airlines improve their operations and lighten balance sheets
stretched by the pandemic. But Boeing said capital markets, bank
debt and government export credits would all expand this year.
"This positive trend reaffirms that our industry's
fundamentals are strong and aircraft financiers and investors
are well positioned as travel continues to recover," said Rich
Hammond, vice president of Customer Finance at Boeing.
Boeing closed down 4.4% after falling as much as 7% as a
slump in Credit Suisse sent shares lower everywhere.
For now, airline executives said, the Credit Suisse upset is
viewed as a relatively isolated issue rather than a repeat of
the liquidity crisis which rocked aviation and other sectors in
2008-2009.
Boeing's forecast was the first since the planemaker folded
decades-old standalone financing arm Boeing Capital into its
airplanes unit as part of a corporate streamlining.
Anchored mainly in Dublin, the fast-growing aircraft
financing sector has benefited from investors chasing relatively
high dollar-denominated returns during the decade of central
bank stimulus that followed the global financial crisis.
Financiers at the industry's annual summit in January said
ample funds remained for aviation but at tighter conditions,
given rising interest rates and a sharper focus on quality.
Leasing firms may face more competition from other sources
of finance this year, Boeing predicted in Wednesday's report.
(Reporting by Aishwarya Nair in Bengaluru, Tim Hepher in Paris,
Valerie Insinna in Washington; Editing by Saumyadeb Chakrabarty,
Vinay Dwivedi and Jamie Freed)
