Global capital demands for new commercial aircraft soar past $120b

Capital requirements for the airline sector are flying higher than ever before, driven by strong passenger traffic and aircraft fleet demand, transforming aviation into a mainstream finance and asset class. According to a new report released today from FlightGlobal. The growth projected for global passenger aircraft fleet will require capital exceeding US$120b annually, reaching approximately half a trillion dollars over the next four years, to fund new aircraft alone. During that period (2018-21), the world’s aircraft manufacturers are scheduled to deliver almost 8,000 aircraft – an increase of approximately 30% over the previous four-year period. Funding this large and growing fleet requirement was once the domain of investment banks, but the considerable sums needed are unlikely to be met in future solely by these capital providers as the aviation sector would weigh too highly on their balance sheets. These growing capital requirements are likely lead to diversification of funding and highlights the compelling aviation investment case to new sources of capital. <br/>