Europe debt crisis creates opportunities in aviation: Boeing

DUBAI: The current European sovereign debt crisis and its expected impact on European banks has thrown up new aircraft opportunities for Middle East investors, aircraft manufacturer Boeing has told the region's bankers and financers.

Speaking at the aircraft-maker's annual financiers and investors' conference for the Middle East, Africa and South Asia region, executives from Boeing Capital Corporation, the manufacturer's product financing arm, outlined the investment potential resulting from what is expected to be a longer-term challenge for European banking institutions.

Boeing's latest long-term market outlook, released in June, projected a USD 4 trillion market for new aircraft over the next 20 years, with a significant increase in aircraft demand over that time.

Of those, the Middle East is expected to require 2,520 aircraft, worth about USD 450 billion.

Europe's banks have been a significant source of global aircraft financing for more than a decade. On the other hand, Middle East banks and lessors have primarily financed air carriers based in the region.

"Middle East economies are generating significant account surpluses, which eventually will translate into the need for diversified investment portfolios," said Boeing Capital Executive John Matthews, the unit's Managing Director for the region.

"As many Middle East investors have already recognised, aircraft offer a very stable, long-term and predictable investment profile, presenting generous profit opportunities for investors willing to take advantage of them," he said.

In reporting on the region's air travel market health, the Boeing executives said the Middle East continues to show very strong growth, with the region's international carriers growing at a rate of nearly 18 per cent during 2010, more than double the world average.

"The region's airlines have demonstrated great competitive skill. They are very well managed and are growing successfully, so we are confident they will continue to prosper and attract financing for their deliveries," said BCC Executive Kostya Zolotusky, who made a presentation on current market conditions and emerging industry trends.