Tremendous opportunities in aircraft financing as air travel expansion continues

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 today.

Featuring key industry experts from around the world, the event, organised by Streamline Marketing Group, has been commissioned by the Abu Dhabi Government and is central to its plans to establish the UAE capital as a world-class aviation hub.

Among today's (Tuesday) speakers at the Aviation Procurement and Finance Conference was Silla Maizey, British Airways' Head of Procurement and Finance Operations, who was outlining the steps followed in streamlining the procurement activities of a major airline.

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.

APEX has been designed to support the development of Abu Dhabi's three principal aviation companies, Etihad, the Abu Dhabi Airports Company (ADAC), which is responsible for operating Abu Dhabi's airports, and the Gulf Aircraft Maintenance Company (GAMCO). Taking place under the patronage of H.H. Dr Sheikh Ahmed bin Saif Al Nahyan, Chairman of Etihad Airways and GAMCO, the event has gathered nearly 70 top aviation suppliers from around the world.