Airbus eyes customer financing amid euro crisis

(SYDNEY) - Global aviation giant Airbus said it would consider providing financing for customers as the eurozone debt crisis drags on, but affirmed upbeat long-term forecasts due to booming Asian demand.

The comments came as the International Monetary Fund warned of a eurozone recession, with banks -- headed by French-Belgian lender Dexia -- now facing collapse over bad exposure to sovereign debts.

Tom Williams, vice president of programmes, said Airbus had not seen any immediate impact from intensifying debt crisis in the eurozone, but it was in talks with European credit agencies about shoring up its customers.

"The European banks have been in the past few years active in terms of aircraft finance ... and clearly there will be some question marks if you look at the euro crisis today and the liquidity position of some of the big banks," he told a markets briefing in Sydney.

"We will if necessary enter into some financing although we're not a bank," he added.

"Of course that's just an insurance (policy) and it has a cost, but it does allow the airlines to go into the market with a strong guarantee and to raise money."

During the 2008 global financial crisis Williams said Airbus had the benefit of "strong support from the European export credit agencies" (ECAs) and it would seek similar help for customers if needed during the current turmoil.

"I think we will look again to the ECAs, and we've been fairly active in talking to them all in the past few weeks," he said.

Airbus affirmed last month's long-range forecast of 27,850 new passenger and freight aircraft deliveries worth $3.5 trillion over the next 20 years due to huge demand from Asia, particularly China and India.

"Really what's driven us through the last recession and the difficult period in 2008-09 was the large numbers of aircraft that we were shipping to India, to China and to South America," Williams said.

About a third of Airbus deliveries during the previous crisis had "some kind of ECA guarantee" and though that had eased to about 21-22 percent Williams said "it may have to go back up again."

"We'll look at our own position and if necessary do some selective financing," he added.

The company will also maintain constant production through the turmoil, preferring to build up a backlog of aircraft rather than letting skills and capability lapse.

A division of European aerospace giant EADS, France-based Airbus expects solid growth in coming decades as the middle classes explode in China and India and demand soars for bigger, cleaner aircraft to curb fuel pollution.

Airbus expects Asia-Pacific to dominate air traffic by 2030, growing 5.7 percent over the next 20 years to take a 33 percent share of the global market, from 28 percent currently, which is roughly equal to Europe and North America.

Williams also saw a greater role for Asian financiers, saying firms such as Bank of China "who have a lot of dollars and want to fill some of the gap" would be "much more active in the market in the future".

Airbus had experienced a "pretty good year so far", Williams said, with 73 percent of net market share compared to Boeing's 27 percent, and US$95.4 billion in revenue, against Boeing's $52.0 billion.

The next-generation A320neo, which uses 15 percent less fuel than the current A320 and is quieter, was seeing explosive growth with 1,245 orders and commitments from 22 customers, Williams said.

It reflected an "tremendous pent-up demand for fuel-efficient aircraft," he said, which had also underpinned solid demand for its A380 superjumbo.

As long as they did not drag on global growth Williams said high oil prices were a boon for the aircraft industry because they drove plane upgrade orders from regions such as North America, where 40 percent of fleets were outdated.