 |
|
|
Climate Change, Aircraft & ECAs
ECAs Spent USD $7.3B in 2003 for Air Transport
ECA Watch Facilitator, Bob Thomson (June 14, 2005)
A number of news items in the press this month highlight the important role of export credit agencies in the finance of new aircraft, primarily from Boeing and AirBus, but with some competition from Bombardier of Canada and Embraer of Brazil, especially for regional passenger jets. ECAs spent US$7.3 billion for air transport in 2003, up 9% from 2002 but down 4.5% on the 6 year average from 1998 to 2003. http://www.oecd.org/dataoecd/8/6/34852465.pdf
http://www.thestandard.com.hk/stdn/std/Markets/GF06Ag01.html
June 6, 2005 Aircraft finance specialists reckon that since 1998, the singular generosity of the Japanese taxman has facilitated up to US$17 billion (HK$132.6 billion) worth of commercial jet purchases all over the world. Under the cheap and popular financing option known as the ``Japanese operating lease,'' or JOL, the aircraft is bought and leased to the airline by a company or partnership established by Japanese investors using a mix of debt and equity. The investors usually kick in 20 to 30 percent of the purchase price in the form of equity, yet are able to claim a depreciation benefit based on the full purchase price to help offset their other tax liabilities. For airlines, it has typically meant the equivalent of a 3 to 5 percent reduction in financing costs over the life of the lease, normally 10 years. On an annual basis, the reduction is around 0.4 to 0.6 percent. Another benefit is 100 percent financing, as opposed to the 80-85 percent that banks are normally prepared to lend.
In the next 20 years, China will require 90 to 115 new aircraft per year, according to the estimates of Boeing and Airbus. For years, Chinese banks were happy to lend to the airlines at rates far below those of the international commercial banks, or to provide guarantees to back international financing, most of it offered cheaply by US and European government export credit agencies to encourage sales of Boeing and Airbus aircraft. China's fast-growing airlines have made scant use of JOLs to date, but this is definitely no time for them to be losing a financing alternative. Now though, as Chinese banks take on foreign partners and aspire to stock market listings abroad, their managers are loath to lend for less than their rivals and tie up capital in guarantees that earn relatively small fees. Without guarantees, the export credit agencies are reluctant to finance Chinese airlines, which, while they may enjoy triple-A credit ratings at home, are held in suspicion abroad.
http://allafrica.com/stories/200506100897.html
"Air Namibia will start using the Airbus A340-300 by December 2005. On 25 May, the MD of Air Namibia, Kosmos Egumbo, signed a lease agreement for two Airbus A340-300 aircraft with Avequis Aircraft Trading & Remarketing Service in France, through the special purpose vehicle created by three European Export Credit Agencies.
http://www.forbes.com/business/feeds/afx/2005/06/02/afx2073224.html
Vietnam Airlines plans to buy four wide-bodied Boeing 787-8 Dreamliner jets in a deal worth US$500 million backed by the official US export credit agency Exim Bank.
http://news.moneycentral.msn.com/provider/providerarticle.asp?feed=AP&Date=20050613&ID=4886362
Malaysia's AirAsia will buy US$750 million (euro625 million) of Airbus Engines and is looking at ECA sources for financing
NGOs have begun to study the link to climate change from these sales. Less expensive financing for aircraft purchases is one factor behind the rapid expansion of international air travel, a major source of GHG production. http://www.insnet.org/ins_headlines.rxml?cust=2&id=1192 So while new, more fuel efficient aircraft reduce GHG emissions, a predicted expansion of UK air passenger transport growth alone, from 180 million passengers per year today to 476 million passengers per year by 2030, will greatly increase total emissions from this source. British emissions of C02 from aircraft, expressed in millions of tons of carbon, shot up from 4.6 million tons in 1990 to 8.8 million tons in 2000. But based on these predictions they are expected to rise to 17.7 million tons in 2030 and because atmospheric emissions have double the impact of those at ground level, aircraft emissions will represent 45 per cent of Britain's expected emissions total in 2030!
Just as some ECAs face the contradiction of financing fossil fuel power plants which generate 20 times their state owners committed reductions under Kyoto (see February's What's New http://www.eca-watch.org/WhatsNew/WNV4_2005/WhatsNewV4N2.html#2), OECD countries will have to begin looking at coherence between their Kyoto and ECA policies in the context of not only international environmental agreements, but also their moral commitments to bequeathing a healthy environment for our great-grandchildren.
|
|
