spinproof
Well-known member
- Joined
- Oct 19, 2002
- Posts
- 774
Ottawa's EDC lofts another $100-million loan to Bombardier client Comair, ALLAN SWIFT.
MONTREAL, Jan 06, 2003 (The Canadian Press via COMTEX) -- The federal agency that provides controversial cut-rate financing to help airlines buy regional jets from Bombardier Inc. says its loans are 97.5 per cent performing. Spokesman Rod Giles of Export Development Canada, in defending its latest loan to a U.S. airline, said Monday this means that holders of only 2.5 per cent of its aerospace loans are not meeting interest payments.
The EDC aerospace portfolio just grew by another $100 million, it was revealed Monday, with a new loan to Comair Inc., a subsidiary of Delta Air Lines, in a deal signed last month.
This is on top of previous EDC loans used by Comair to purchase regional jets from Montreal-based Bombardier (TSX:BBD.B), whose aerospace production has slowed, particularly in business jets.
Giles said he could not provide a breakdown of EDC loans to Bombardier clients, but he said the agency's total aerospace loan portfolio amounts to $5.8 billion. The vast majority helped clients of Bombardier Aerospace to buy its popular regional jets.
Other customers include Air Wisconsin and Atlantic Coast Airlines.
Atlantic Coast revealed in a court filing Friday that it will have trouble paying for the remaining 47 regional jets it has ordered from Bombardier if its main partner, bankrupt United Airlines, does not give a clear indication that it will honour its Atlantic contracts.
Bombardier spokesperson Dominique Dionne said Monday she was unaware of any order cancellations.
Although American-based airlines might be capable of financing aircraft purchases on their own, EDC became involved to counter Brazil's government subsidies on sales of Brazilian-made Embraer jets, Bombardier's main competitor.
The World Trade Organization found both countries guilty of unfair trade practices, but the subsidies continue which negotiations on the subsidy dispute continue.
Giles said the EDC aerospace loan payback rate indicates the sector is viable.
An industry association report on aviation in 2002 says that despite the aviation slowdown of the last two years, regional jet service has increased in the United States, the world's largest aviation market, mainly because the smaller aircraft are easier to operate profitably.
The Regional Air Service Initiative reports that regional jets served 223 U.S. airports in 2002, an increase of 26 during the year, and there was rapid expansion on existing routes.
"This statistic confirms there is little doubt that small-capacity jets are critical to the U.S. airline industry's growth and long-term survival," said Doug Abbey, executive director of the agency.
John Paul Macdonald, spokesman for Bombardier Aerospace, added that the majority of regional carriers are independent of the majors, and they are making money for the partners they funnel passengers to.
"For sure the airline industry is in a difficult way," Macdonald said, "but people will continue to fly, and the regional routes are the routes with which the airlines are making money."
As of Nov. 30, firm orders for Bombardier Regional Jets stood at 1,215, with 771 delivered. Conditional sales and options would boost the total, including of 50-, 70- and 90-seat versions, to 2,434 aircraft.
Bombardier shares (TSX:BBD.B) closed Monday at $5.95, up 31 cents.
The online source for news sports entertainment finance and business news in Canada
Copyright (C) 2003 The Canadian Press (CP), All rights reserved
MONTREAL, Jan 06, 2003 (The Canadian Press via COMTEX) -- The federal agency that provides controversial cut-rate financing to help airlines buy regional jets from Bombardier Inc. says its loans are 97.5 per cent performing. Spokesman Rod Giles of Export Development Canada, in defending its latest loan to a U.S. airline, said Monday this means that holders of only 2.5 per cent of its aerospace loans are not meeting interest payments.
The EDC aerospace portfolio just grew by another $100 million, it was revealed Monday, with a new loan to Comair Inc., a subsidiary of Delta Air Lines, in a deal signed last month.
This is on top of previous EDC loans used by Comair to purchase regional jets from Montreal-based Bombardier (TSX:BBD.B), whose aerospace production has slowed, particularly in business jets.
Giles said he could not provide a breakdown of EDC loans to Bombardier clients, but he said the agency's total aerospace loan portfolio amounts to $5.8 billion. The vast majority helped clients of Bombardier Aerospace to buy its popular regional jets.
Other customers include Air Wisconsin and Atlantic Coast Airlines.
Atlantic Coast revealed in a court filing Friday that it will have trouble paying for the remaining 47 regional jets it has ordered from Bombardier if its main partner, bankrupt United Airlines, does not give a clear indication that it will honour its Atlantic contracts.
Bombardier spokesperson Dominique Dionne said Monday she was unaware of any order cancellations.
Although American-based airlines might be capable of financing aircraft purchases on their own, EDC became involved to counter Brazil's government subsidies on sales of Brazilian-made Embraer jets, Bombardier's main competitor.
The World Trade Organization found both countries guilty of unfair trade practices, but the subsidies continue which negotiations on the subsidy dispute continue.
Giles said the EDC aerospace loan payback rate indicates the sector is viable.
An industry association report on aviation in 2002 says that despite the aviation slowdown of the last two years, regional jet service has increased in the United States, the world's largest aviation market, mainly because the smaller aircraft are easier to operate profitably.
The Regional Air Service Initiative reports that regional jets served 223 U.S. airports in 2002, an increase of 26 during the year, and there was rapid expansion on existing routes.
"This statistic confirms there is little doubt that small-capacity jets are critical to the U.S. airline industry's growth and long-term survival," said Doug Abbey, executive director of the agency.
John Paul Macdonald, spokesman for Bombardier Aerospace, added that the majority of regional carriers are independent of the majors, and they are making money for the partners they funnel passengers to.
"For sure the airline industry is in a difficult way," Macdonald said, "but people will continue to fly, and the regional routes are the routes with which the airlines are making money."
As of Nov. 30, firm orders for Bombardier Regional Jets stood at 1,215, with 771 delivered. Conditional sales and options would boost the total, including of 50-, 70- and 90-seat versions, to 2,434 aircraft.
Bombardier shares (TSX:BBD.B) closed Monday at $5.95, up 31 cents.
The online source for news sports entertainment finance and business news in Canada
Copyright (C) 2003 The Canadian Press (CP), All rights reserved
