Boeing has released its annual Commercial Aircraft Finance Market Outlook (CAFMO) report, predicting another year of recovery and increased demand from aircraft financiers and investors. The report notes that with the reopening of certain regional markets and production and delivery increases, aircraft financing needs are expected to reach near pre-pandemic levels in 2023.
According to Rich Hammond, Vice President of Customer Finance at Boeing, “This positive trend reaffirms that our industry’s fundamentals are strong and aircraft financiers and investors are well positioned as travel continues to recover.”
Cash funding played a significant role in delivery financing in 2022 due to strong operational performance and de-leveraging efforts by customers. However, the use of capital markets, bank debt, and export credit is expected to expand.
In 2022, capital markets activity was lower compared to the heightened activity recorded in 2021. Export credit agencies supported nearly 5% of Boeing deliveries in 2022. Lessor-supported deliveries will remain stable but may face competition from other financing sources.
The Boeing 2022 Commercial Market Outlook, a separate annual 20-year forecast addressing the market for commercial airplanes and services, reflects that the global market is recovering as Boeing projected in 2020. Demand for domestic air travel has made a strong recovery across a number of regions, with international traffic gaining momentum as restrictions ease, tracking to return to pre-pandemic levels by 2023 to 2024.
However, the report includes a caution concerning forward-looking statements, noting that the statements are based on expectations and assumptions that may not prove to be accurate and are subject to risks, uncertainties, and changes in circumstances that are difficult to predict.
Boeing’s CAFMO report is an annual review of aircraft financing trends, which assesses near-term market dynamics and financing sources for new commercial airplane deliveries. The report includes an introductory video, presentation, and regional financing data, which are available at www.boeing.com/CAFMO.
The report’s release comes amid ongoing challenges in the aviation industry, which has been hit hard by the COVID-19 pandemic. Travel restrictions and reduced demand have led to significant losses for airlines and aircraft manufacturers, forcing them to seek financial assistance and reduce operations.
However, there are signs of recovery, with increased vaccination rates and easing travel restrictions. Many airlines are also increasing their fleets to meet growing demand, with orders for new aircraft expected to rise in the coming years.
Boeing has faced significant challenges in recent years, including the grounding of its 737 MAX aircraft following two fatal crashes. The company has worked to address the issues, implementing changes to the aircraft’s software and working to regain the trust of regulators and customers.
The company’s financial performance has also been impacted by the pandemic, with significant losses reported in 2020. However, the release of the CAFMO report suggests that the company is optimistic about the future and the potential for increased demand for its aircraft.
In conclusion, Boeing’s 2023 Commercial Aircraft Finance Market Outlook predicts another year of recovery and increased demand from aircraft financiers and investors. The report notes that with production and delivery increases and the reopening of certain regional markets, aircraft financing needs are expected to reach near pre-pandemic levels in 2023. However, the report includes a caution concerning forward-looking statements, noting that the statements are subject to risks, uncertainties, and changes in circumstances that are difficult to predict.