Air Transport World

The return of Eximbank. (Export-Import bank increasing aircraft export financing activities)

The Reagan administration once considered getting rid of the Export-Import Bank, which has battled throughout its history to obtain more funding for exports, including aircraft. In 1988 and '90, Exim financed no commercial-jet acquisitions.

But Exim is back. It may never achieve the heights of 1974, when it financed 189 commercial-jet exports, or 1980, when it helped Boeing and McDonnell Douglas to export 157 aircraft. Nevertheless, the pull-back of commercial institutions from aircraft finance, especially in Japan, which dominated the 1980s, has boosted Exim's activity.

Mark Schulte, managing director of Merrill Lynch Capital Markets, told an IATA aircraft-finance conference: "The participation by the banks is likely to drop significantly." Indeed, several U.S. banks that traditionally funded aircraft purchases--Manufacturers Hanover, Security Pacific, Bank of America, Chase Manhattan, Chemical Bank--either have merged, pulled out of the field or reduced activity severely. The list of those remaining, among them Citibank and Dillon Read, is "not very large," says Marvin Solomon, senior legal counsel for Exim.

The economic downturn in Japan, which once supplied an estimated 60% of aircraft finance, is a major source of the problem. …

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