Concerns arise about financing of new aircraft
22 Sep 2011
Barcelona: Though record numbers of aircraft are leaving production lines at Airbus and Boeing, concerns are now being raised about continued financing of new commercial aircraft even as Europe's debt crisis persists and French banks scale back on financing operations.
The warning was issued Tuesday by Ryanair finance director Howard Millar.
Traditionally, French banks have been major players in the aircraft financing market. They accounted for about 31 per cent of transactions in 2010 followed by Germany, Ryanair finance director Howard Millar said.
"The French banks have scaled back significantly. There will be less finance available and any finance will be more expensive," he told an ISTAT aircraft financing conference.
French banks Societe Generale and BNP announced plans to scale back lending in the aircraft market last week as French banks moved to sell assets and reduce lending.
"In the past few months things have got worse. French banks are effectively closed for new clients," Millar said. "We are in an ivory tower -- we are heading for a little bit of a car crash in terms of financing."
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