Finance to support 2013 aircraft deliveries: DVB chief

Singapore
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High levels of liquidity will ensure that airlines will be able to fund their deliveries for 2013, says a key aircraft financier.

DVB Bank's managing director for aviation and rail finance Bertrand Grabowski says that low interest rates globally and a more competitive market will ensure that almost all airlines will be able to finance their aircraft due to be delivered this year.

"I don't think there will be any kind of funding gap in deliveries as there is still a huge amount of liquidity in the market," he says, adding that he does not expect any "white-tails" aircraft being produced this year.

Competition in the aircraft financing market has increased in recent years with the entry of Chinese and other Asian banks into the market, while other institutions, such as insurers, are also investing in aircraft that are seen as having higher returns than cash investments.

Grabowski warns, however, that airlines should not become too reliant upon the current liquidity conditions to fund their capital expenditure on new aircraft.

"To finance capex, which is a long-term strategic thing, you cannot rely on excess liquidity that might be temporary," he says.