Boeing Reports Increased Stability and Growth for Aircraft Finance Sector

Rhea-AI Summary

Boeing Capital Corporation's 2022 Commercial Aircraft Financing Market Outlook indicates a recovering aviation industry post-pandemic, with a focus on improving financing stability.

Highlights include that all Boeing deliveries were financed by third parties, with key funding sources being cash and capital markets. Secured debt for lessors has rebounded to pre-pandemic levels, with the ABS market reaching approximately $8.7 billion. Institutional investors are increasingly seeking aviation exposure, and export credit financing contributed 5% of total funding. Long-term demand for over 43,500 new airplanes valued at $7.2 trillion is projected through 2040.

Positive

• 100% of Boeing deliveries financed by third parties, indicating strong market confidence.
• Capital markets nearing pre-pandemic liquidity levels, improving funding conditions.
• Secured debt for lessors returning to pre-pandemic levels with $8.7 billion in ABS market volumes.
• Institutional investors actively seeking aviation exposure, suggesting robust investor interest.
• Long-term demand for commercial aircraft projected at over 43,500 units valued at $7.2 trillion.

Negative

• Risk tolerance and activity levels remain below pre-pandemic conditions, indicating lingering uncertainty.

CHICAGO, May 2, 2022 /PRNewswire/ -- Boeing Capital Corporation, a wholly-owned subsidiary of Boeing [NYSE: BA], today released the 2022 Commercial Aircraft Financing Market Outlook (CAFMO) showing improving financing stability as the industry recovers from the impacts of the global pandemic.

"Financiers and investors remain committed to the long-term fundamentals that continue to make aircraft a valuable asset class," said Tim Myers, president of Boeing Capital Corporation. "Despite the changing landscape since the emergence of the COVID-19 pandemic, the industry remains resilient and there continues to be sufficient liquidity in the market for our customers with increasing opportunities as traffic recovers."

The 2022 CAFMO reflects Boeing's near-term view of market dynamics and assesses financing sources for new commercial airplane deliveries.

"Industry fundamentals continue to show varying degrees of strength in different markets that reflect the regional trends of the global pandemic," Myers said.

The 2022 CAFMO, an introductory video, regional highlight videos and regional financing data is available at www.boeing.com/CAFMO. Select highlights include:

- For the second consecutive year, 100% of Boeing deliveries were financed by third parties with the top sources of delivery funding in cash, capital markets and sale leasebacks.

- The capital markets continued to play a key role in shoring up liquidity for the sector, with the market close to pre-pandemic levels for most issuers as spreads tightened throughout the year.

- Secured debt for lessors also made a return to pre-pandemic levels with the ABS market making a comeback with volumes at around $8.7 billion, as lessors took advantage of the favorable rate environment.

- Although risk tolerance and activity levels were below pre-pandemic levels, pockets around the world are increasingly looking for business through bank debt.

- Institutional investors and funds continued to seek aviation exposure, filling in where traditional sources of capital retrenched.

- Export credit supported financing for Boeing aircraft contributed about 5% of total funding last year, primarily by the Export-Import Bank of the United States and with one deal supported by UK Export Finance.

The Boeing 2021 Commercial Market Outlook, a separate annual 20-year forecast addressing the market for commercial airplanes and services, projects that through 2040 there will be demand more than 43,500 new airplanes valued at $7.2 trillion.

Caution Concerning Forward-looking Statements

Certain statements in this document may be "forward-looking" within the meaning of the Private Securities Litigation Reform Act of 1995. Words such as "may," "should," "expects," "intends," "projects," "plans," "believes," "estimates," "targets," "anticipates" and similar expressions generally identify these forward-looking statements. Examples of forward-looking statements include statements relating to our future plans, business prospects, financial condition and operating results, as well as any other statement that does not directly relate to any historical or current fact. Forward-looking statements are based on expectations and assumptions that we believe to be reasonable when made, but that may not prove to be accurate. These statements are not guarantees and are subject to risks, uncertainties and changes in circumstances that are difficult to predict.

Many factors could cause actual results to differ materially and adversely from these forward-looking statements, including the COVID-19 pandemic and related industry impacts; the 737 MAX, including the timing and conditions of 737 MAX regulatory approvals, lower-than-planned

production rates and/or delivery rates, and increased considerations to customers and suppliers; economic conditions in the United States and globally; general market and industry conditions as they may impact us or our customers; reliance on our commercial customers, our U.S. government customers and our suppliers; the overall health of our aircraft production system, international armed conflict, as well as the other important factors disclosed previously and from time to time in The Boeing Company's filings with the Securities and Exchange Commission. Any forward-looking statement speaks only as of the date on which it is made, and we assume no obligation to update or revise any such statement, whether as a result of new information, future events or otherwise, except as required by law.

Boeing Capital Corporation is a global provider of financing solutions. A wholly-owned subsidiary of The Boeing Company, Boeing Capital offers asset-backed lending and leasing, concentrating on assets that are critical to the core operations of Boeing customers. Boeing Capital's primary mission is to support the other Boeing business units by ensuring customers have the financing they need to buy and take delivery of their Boeing products.

As a leading global aerospace company, Boeing develops, manufactures and services commercial airplanes, defense products and space systems for customers in more than 150 countries. As a top U.S. exporter, the company leverages the talents of a global supplier base to advance economic opportunity, sustainability and community impact. Boeing's diverse team is committed to innovating for the future, leading with sustainability, and cultivating a culture based on the company's core values of safety, quality and integrity. Learn more at boeing.com. 

Contact
Mary Kay Leo
Boeing Communications
1-312-218-5060
marykay.leo@boeing.com

Peter Pedraza
Boeing Communications
1-312-618-8998
peter.p.pedraza@boeing.com

 

View original content:https://www.prnewswire.com/news-releases/boeing-reports-increased-stability-and-growth-for-aircraft-finance-sector-301534149.html

SOURCE Boeing

FAQ

What does Boeing's 2022 Commercial Aircraft Financing Market Outlook report indicate?

It shows improving financing stability in the aviation sector as the industry recovers from the pandemic.

How much of Boeing's aircraft deliveries were financed by third parties in 2022?

100% of Boeing's aircraft deliveries were financed by third parties.

What is the projected demand for new airplanes through 2040 according to Boeing?

Boeing projects a demand for over 43,500 new airplanes valued at $7.2 trillion through 2040.

What role do capital markets play in aircraft financing according to the 2022 CAFMO?

Capital markets have contributed to liquidity nearing pre-pandemic levels, offering vital funding support.

What percentage of total funding for Boeing aircraft came from export credit financing?

Export credit financing contributed about 5% of total funding for Boeing aircraft last year.