Asian, Gulf banks fill gap in aircraft finance

[DUBAI] Cash-rich Asian and Middle Eastern lenders are taking a larger share of the US$100 billion global aircraft financing market as Western rivals step back due to the liquidity crunch and stricter regulations, a top Airbus executive said.

European commercial banks, previously the primary funding source for airlines, have substantially cut their exposure to the aviation sector after the continent's debt crisis, leaving a funding gap for fast-growing airlines in emerging markets, said Francois Collet, vice-president for structured finance at Airbus.

"Some European lenders have halved their lending availability for the aviation sector," Mr Collet said. "They have tried to fill the gap by bringing in other regional and local banks and working together in syndicated deals. Traditional banks are now playing the role of arrangers."