Each year, Boeing releases a document called the Current Aircraft Finance Market Outlook Report, which attempts to forecast financing sources and figures for the delivery of new commercial aircraft, in addition to the long-term funding needs for the aviation industry as a whole.
The report released by Boeing in December 2018 predicts steady growth in the aviation financing industry for 2019, and identifies potentially strong demand for a number of new commercial aircraft. This report projects that approximately $143 billion in financing investments will be infused into the aviation industry this year for new commercial aircraft, and it further anticipates that this figure will rise to $180 billion within a scant four years.
Projected cash sources
According to the Boeing forecasts, aviation financing for new aircraft deliveries will be obtained through a combination of commercial bank debt, capital markets, and cash during 2019. The report further projects that the cost of financing during the coming year will be historically low, which is great news for all the major airlines investing in new aircraft. Unsecured borrowing seems likely to fuel continued growth of the capital markets.
In addition to aircraft purchases, aircraft leasing now comprises slightly above 40% of all in-service commercial aircraft operations. The Boeing report also identifies export credit agencies as a continuing essential source of aviation financing, even though their contribution is relatively small compared to other sources. It is expected that the used aircraft market will also enjoy a boom year in 2019, with high demand for serviceable aircraft by all current airlines.
Aviation financing with Mossberg Strategic Capital
If you’re involved in the aviation industry, and you require an infusion of working capital to achieve your objectives, we’d like to hear from you. Contact us at Mossberg Strategic Capital, so our financial experts can discuss some options for funding with you.