{"id":112115,"date":"2021-04-15T00:42:32","date_gmt":"2021-04-15T00:42:32","guid":{"rendered":"https:\/\/fin2me.com\/?p=112115"},"modified":"2021-04-15T00:42:32","modified_gmt":"2021-04-15T00:42:32","slug":"boeing-says-financing-available-to-back-jet-deliveries","status":"publish","type":"post","link":"https:\/\/fin2me.com\/markets\/boeing-says-financing-available-to-back-jet-deliveries\/","title":{"rendered":"Boeing says financing available to back jet deliveries"},"content":{"rendered":"
(Reuters) -Boeing Co voiced optimism on Wednesday over financing for jet buyers to take deliveries as the industry looks to a recovery in air travel, while raising an amber flag over airline access to commercial bank loans.<\/p> Industrywide needs for funding to support deliveries fell about 40% to $59 billion in 2020 as the pandemic stifled production already weakened by the grounding of the Boeing 737 MAX in 2019.<\/p>\n \u201cDespite the unprecedented impacts of COVID-19 on the global aerospace industry, there generally continues to be liquidity in the market for our customers,\u201d said Tim Myers, president of Boeing Capital, the planemaker\u2019s financing arm.<\/p>\n \u201cWe expect it to further improve as travel begins to rebound.\u201d<\/p>\n Aviation has become a fast-growing alternative asset class over the past decade, as investors flocked toward dollar-denominated investments that offer relatively high returns, especially when set against a backdrop of low interest rates.<\/p>\n As the pandemic swept across the industry just over a year ago, credit spreads widened, capital markets closed to aviation and banks retreated, Boeing said in an aviation finance report.<\/p>\n But \u201ccapital markets came back, and new sources of funding from institutional investors and funds came to market,\u201d it added.<\/p>\n One lingering concern surrounds the availability of commercial bank funding, which typically makes up about a third of the financing needed to support jet deliveries.<\/p>\n Commercial lending has recovered ground since 2020 but remains on Boeing\u2019s watchlist along with certain tax-related instruments. But for now, capital from investment funds is filling the gap.<\/p>\n \u201cWe expect that capital will continue to be routed into the sector by established players and as new entrants seek opportunities during the industry\u2019s recovery,\u201d Myers said.<\/p>\n