Regional-aircraft manufacturers face the prospect of increased financial risk in coming years, despite having been able to reduce sales costs since the mid-1990s, according to Moody’s Investor Service. As the economic recession continues, the New York-based credit research agency said such companies might not escape global requirements for more financial assistance to operators. They also face greater risk if customers take advantage of commitments made for future assistance to buyers of regional jets.
Ultimately, increased exposure could dilute original equipment manufacturers’ own credit quality, said a Moody’s report. While manufacturers of larger airliners with more than 100 seats face the greatest exposure, Moody’s senior vice president Tassos Philippakos predicts that the regional sector “may see their participations [in customer financing] rising during this airline downcycle.”
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