DAVOS: Airbus Chief Says Customers Are Avoiding Banks

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DAVOS, Switzerland—Airbus Chief Executive Tom Enders lauded the attributes of the aircraft-manufacturing industry and said some customers are avoiding banks to finance purchases.

Highlighting the lending squeeze, increasingly carriers are “going directly to capital markets rather than going through banks,” Enders says. Most customers don’t fund aircraft purchases from cash flow.

Airlines were looking to raise more financing from China and Japan, he said on the opening day of the World Economic Forum here. “There is no shortage of capital, but we have to look at where we source from in future,” he says.

Enders touts aircraft building as a long-term growth industry, noting that Airbus and rival Boeing Co. (BA) each estimate demand for aircraft at about 30,000 planes over the next 20 years.

A big chunk of that demand comes from airlines in Asia and the Middle East. Airbus, a unit of European Aeronautic Defence & Space Co. NV (EADSY), last year delivered over 500 aircraft to customers, including more than 100 to China.

About 40% of Airbus’ order book was from airlines in China, Enders adds.

He believes the euro-zone debt crisis presents an opportunity for deregulation.

“It is a terrible thing to waste a good crisis,” he says.



Original Article Source by Barrons.com