Boeing Capital Corp., the leasing and financing arm of Boeing Co. (NYSE: BA), released its aircraft finance market outlook for the next five years this morning. Boeing Capital expects total industry deliveries to reach $104 billion in 2013, with Boeing and Airbus taking about 95% of the sales.
The company’s managing director said:
Stable demand growth, along with aircraft replacement requirements accelerated by higher fuel prices, should drive a rising appetite for new fuel-efficient airplanes. We expect that the underlying demand and a scarcity of new airplane delivery positions will ensure an adequate availability of capital at reasonable prices to fund new airplane deliveries for the industry in 2013.
A slight drag on the leasing business could come from new regulations that reduce export credit support typically supplied by governments. In 2012, export credits totaled 30% of expected total sales of about $95 billion. In 2013, export credits will contribute about 25% to the expected $104 billion in sales. Commercial banks and capital markets are expected to fill the gap and to support the increase in sales. Boeing expects only 5% of deliveries to be funded by buyers’ cash holdings.
Boeing Capital expects aircraft leasing to expand from 40% of the world’s fleet currently to 50% by the end of the decade.
Boeing Capital’s outlook report is available here.