Efforts to revamp export credit agency support should go “back to the roots” of their creation and focus on helping to level the playing field, chief executive of Natixis Transport Finance Christian McCormick urged during a panel debate on air financing at World Air Forum in Cannes today.
Moves are currently underway to revamp rules around ECA support for aircraft financing with a target of establishing agreement by the end of the year. Debate around the issue has become heated, amid increasingly vocal concerns among some European and North American carriers arguing they are left at a competitive disadvantage against rival network carriers which can access ECA funding – notably the rapidly expanding Gulf mega-carriers.
“The manufacturers and the ECAs have realised there is an issue here and it needs to be addressed,” McCormick told delegates at WAF, pointing out the large role ECA funding makes up of recent financing after they stepped in to fill the gap in aircraft funding left by banks “We thank the ECAs for what they did, but we have to move forward,” he adds, saying the industry needs to move a more normal balanced structure. “At the moment the ECAs are dominating the market.”
Work on revamping the rules surrounding ECA covers a range of options, including attaching more conditions to such funding in future. But McCormick believes the key is to focus on why ECA funding was originally created. “Let’s make sure the ECAs do the job they were established to do, help those airlines that don’t have long-term access to dollars. We need to go back to the roots, go back to what the ECAs were created for and level the playing field.”
For more on the debate surround ECA aircraft funding see our recent anlysis here
Source: Airline Business
