Continuing Liberalization to Drive Strong Growth in Aircraft Market

Airlines will need over 27,000 new aircraft worth more than US$2.6 trillion over the next 20 years, providing tremendous opportunities for aircraft financiers, the new international aviation conference taking place in Abu Dhabi was told.

John Matthews, Managing Director of the Middle East and Africa Region, Aircraft Financial Services for Boeing Capital Corporation, said at the Aviation Procurement and Finance Conference that the continuing liberalization and deregulation of the airline industry will drive additional new entrants to enter the airline market as well as spurring strong growth in airline passenger traffic and aircraft demand.

“Aircraft are an excellent investment since they have long economic lives and are mobile assets, providing the opportunity to move them from one airline to another. Boeing designs and supports its aircraft to enhance this mobility or liquidity by working closely with financiers to obtain their input on new products,” said Matthews.

He said aircraft design factors such as overall capability, ease of re-configuration and number of engine types available, but even more importantly the number of aircraft sold, the number of customers, and the breadth of the geographic distribution of sales of an aircraft around the world are key criteria for financiers in determining whether or not a particular aircraft is a good investment.

Matthews said that new entrants in a more liberalised airline sector are driving growth in passenger traffic, aircraft sales and financing, with half of the current operators having launched operations since 2000. Over the next 20 years, 27,000 new aircraft worth more than US$2.6 trillion will be needed as air travel continues to boom, and the worldwide freighter fleet will double in size, with a shift towards widebody aircraft.

The three-day conference, for which Boeing is the platinum sponsor, is part of the Aviation Procurement Expo (APEX) which entered its second day at the Abu Dhabi National Exhibition Centre on Tuesday.

More than 200 delegates from international airlines and related industry sectors are attending the conference which is also examining Islamic financing of aircraft, strategic sourcing in the aviation sector and fuel procurement.

Tomorrow (Wednesday) delegates will take part in a final-day workshop run by the UK-based Chartered Institute of Purchasing & Supply, which looks at effective risk management and negotiation strategies in purchasing.

See other recent news regarding: Travel News Asia, Abu Dhabi, APEX