Lessors & ECAs lead rhuge Air India jet order while Kenya Airways defaults on EXIM

(Reuters, Bengaluru, 15 February 2023) As global aerospace savours a record Air India 500-plane deal cheered by world leaders, it is the turn of leasing companies to line up for a piece of the action. "The large majority of these aircraft are likely to be financed through sale-and-leasebacks with perhaps 20% of the financing come from the (Western) export credit agencies," said aviation adviser Bertrand Grabowski. Experts say the mainly Dublin-based lessors, who rent jets out for a monthly fee, could play a significant role in financing the Tata-owned airline's Airbus and Boeing spree. In other news, the Export-Import Bank of the United States issued Kenya a default notice for delayed payment of a $454 million loan that the government borrowed to fund Kenya Airways. The flag carrier defaulted on the part of its $525 million loan from Exim, which the Kenyan government guaranteed. The Kenya National Treasury plans to reduce Kenya Airways' state funding by $79.8 million, taking it from $239.5 million to $159 million, according to its 2022-23 supplementary budget. The treasury is reducing its support for the flag carrier in line with the government's strategy to lessen the airline's dependency on state funds by the end of 2023, although the airline will receive $283 million in financial aid from the state to continue operations.