Air Transport World

Challenging flightplan.

The euro is off to a fast start, but can it ever contest the dollar's dominance of aircraft finance?

The introduction of the euro on Jan. 1,1999, has been followed by a spate of aircraft financing transactions denominated in the new currency (see box). Experts with whom ATW spoke see a continued role for the euro in the future. "Our view is that [the euro] is going to have an impact and indeed, already is having an impact," says David Osborne, head of aircraft finance for Deutsche Bank. He cites "a lot of demand from airlines within Europe for euro-denominated financings."

At the same time, Osborne and others note that enormous structural hurdles will have to be overcome for the new currency to become as significant as the US dollar in terms of aircraft financings. Aircraft "are essentially dollar-denominated assets and are likely to remain so into the foreseeable future," he says. Contributing to this is the enormous influence of the US market itself, home to more than 40% of the world commercial jet fleet. …

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