Aircraft Acquisition Trough Export Credit Agencies

The aircraft financing market is booming with export credit agencies and banks bound to remain one of the primary funding sources. Many airlines, leasing companies and cargo carriers require long-term financing to consummate the sale from the manufacturer. Since many airlines fall into the lower levels of the credit spectrum and have to grapple with anemic profitability, there is a need for lower-cost of financing to help bridge the gap between airline needs and the strong desire for manufacturers to sell aircraft and parts. Aircraft manufacturers wish to boost export sales, and their airlines have a need to finance these purchases. National governments, recognizing the ability of aircraft manufacturing to increase high-value exports and to create jobs at home, have used their governmental export credit agencies to provide financing support in these cases. Often, these agencies are tasked with providing financing when no other source of capital is available for the sale and subsequent export itself. Airlines and lessors have also taken advantage of these programs to secure lower-cost financing. In this chapter, we will provide a detailed discussion of the various export credit agencies and their respective programs supporting aircraft sales. This chapter covers the following topics: