Airbus has established a Watchtower Committee to monitor its customers and financing needs, an operation similar to the War Room established by Boeing Capital in August 2007. It replicates a similar process which followed 9/11, says Nigel Taylor, senior vice-president, customer, project and structured finance for Airbus. It analyses the "real" needs of airlines over the next two years, seeking to determine if any carrier may not need the equipment this year and moving the aircraft around if necessary. It also analyses pre-delivery payments and surveysthe banks in line to finance customers.
"There are limited funds available," he says. "Boeing and us must be talking to the same banks. At the moment we are relying almost exclusively on bank debt to supply sources to airlines and lessors. As we go forward, the debt will become more scarce and more expensive. At the same time, capital markets are looking at bonds. We are working with investment banks to generate corporate markets backed by export guarantees."
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Airbus is currently still planning on about €1 billion ($1.3 billion) in customer financing this year - compared with $1 billion for Boeing. Both say they could increase this level if necessary.
Boeing Capital still asserts the industry funding gap this year is up to $5billion, less than lessors' assertions of up to $25 billion. "It's a fragile, dynamic market that can change at a moment's notice," saysBCC president Walt Skowronski. He says BCC will do whatever it takes to supportits customers, including increasing its customer financing, but adds: "We're not seeing firm requests come in the door that will turn into a funding by Boeing."
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Source: Airline Business
