Boeing expects 2023 aircraft financing to reach pre-pandemic levels By Reuters

© Reuters. FILE PHOTO: The Boeing logo is displayed on a screen, at the New York Stock Exchange (NYSE) in New York, U.S., August 7, 2019. REUTERS/Brendan McDermid/File Photo

(Reuters) -Boeing Co said on Wednesday that it expects commercial aircraft financing to reach near pre-pandemic levels in 2023, highlighting strong industry fundamentals.

The planemaker expects the industry will need $94 billion in delivery funding, slightly below $98 billion in 2019. The funding was at $69 billion last year.

Boeing (NYSE:), which annually reviews aircraft financing trends, said it sees increased interest from financiers and investors to aid commercial airplane deliveries.

Cash continues to be a dominant source of funding, the company said. The industry gets financing through a variety of sources such as capital markets, bank debt, export credit, sale leaseback among others. 

“This positive trend reaffirms that our industry’s fundamentals are strong and aircraft financiers and investors are well positioned as travel continues to recover,” said Rich Hammond, vice president of Customer Finance at Boeing. 

The planemaker released its outlook amid increased signs of distress in the banking sector as shares of Credit Suisse slumped on funding concerns. Banks have already been under pressure following the recent collapse of the Silicon Valley Bank and Signature Bank (NASDAQ:).

Two European aviation sources said the Credit Suisse episode was being viewed in the industry as a management and derivatives issue rather than a repeat of the liquidity crisis which rocked the sector and shut off bank loans in 2009.

Boeing, which has played a key role in promoting the emergence of aviation finance as an asset class, issued its first forecast since deciding to absorb its financing arm Boeing Capital into its airplanes unit.

The $100-billion-plus sector has benefited from a flood of investment chasing high dollar-denominated returns during a decade of central bank stimulus following the 2008 financial crisis.

Financiers at an industry gathering in Dublin in January said there was plentiful supply of funds for aviation but at tighter conditions, given rising interest rates and a sharp focus on credit quality.