Aircraft Finance Industry on Track to Return to Pre-Pandemic Levels by 2024

Boeing released its 2023 Commercial Aircraft Finance Market Outlook (CAFMO), which showed another year of recovery and increased demand from aircraft financiers and investors. Demand for domestic air travel has made a strong recovery across a number of regions, according to Boeing, with international traffic gaining momentum as restrictions ease and tracking to return to pre-pandemic levels by 2024.

“With production and delivery increases and the reopening of certain regional markets, we forecast aircraft financing needs to reach near pre-pandemic levels in 2023,” Rich Hammond, vice president of customer finance at Boeing, said. “This positive trend reaffirms that our industry’s fundamentals are strong and aircraft financiers and investors are well positioned as travel continues to recover.”

In 2022, the majority of Boeing airplanes were funded with cash due to strong operational performance and de-leveraging efforts by customers. While cash funding will continue to play a significant part in delivery financing, the use of capital markets, bank debt and export credit is expected to expand.

According to Boeing, 2022 capital markets activity was lower compared to the heightened activity recorded in 2021.

Boeing also noted that export credit agencies supported nearly 5% of Boeing deliveries in 2022 and that lessor-supported deliveries will remain stable but may face competition from other financing sources.

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