Aircraft atractive for global financial institutions, Boeing Middle East demand fuels aviation growth.

Dubai The Middle East's strong aviation industry demand proves a good opportunity for international investors in regional aircraft financing, Boeing Capital, the manufacturer's financial arm, says.

In the past months, the region was often the only growth market in air passenger demand, according to data from International Air Transport Association (IATA).

Globally, capacity has overtaken demand and industry experts warn of dropping load factors, but regional airlines continue to bring more capacity online as they receive new aircraft.

"There are great opportunities available for people with capital who are willing to invest," said John Matthews, managing director, Middle East and Africa, at Boeing Capital Corp, the aircraft manufacturer's customer financing unit.

"Financiers willing to take advantage of the short-term market dislocations with a view to creating a long-term aircraft portfolio should find themselves generously rewarded, as aircraft remain a great asset," Matthews said.

Boeing also reported that, based on experience to date, it accurately forecast that global aircraft financing resources would be adequate to support 2009 deliveries. "Predictions that there would be a financing gap of tens of billions of dollars to be filled by manufacturers have not come to pass and market conditions remain manageable," said Matthews.

Boeing estimated that it would only need to provide approximately $1 billion (Dh3.67 billion) in customer financing this year, and it currently expects to be below that figure.

Speaking to Gulf News, Matthews said that the fin-ancing rates are improving as liquidity frees up in the markets and new entrants can be seen in the financing sector.

"It's encouraging to see the positive feedback we've had from the market about participating the market," he said.

Kostya Zolotusky, managing director of Capital Markets Development, Aircraft Financial Services, at Boeing Capital, said that international institutions would prefer to have a diverse investment portfolio to reduce risks and the Middle East market proves to be attractive.

Etihad Airways, the national carrier of the UAE, has a firm order of 45 aircraft with Boeing and an agreement with Airbus that includes firm orders for 55 aircraft.

Its fleet presently comprises 47 aircraft and will expand to 52 by the end of the year. In 2010, the airline will take delivery of an additional four aircraft bringing the total fleet strength to 56.

Emirates, one of the region's largest carriers, took delivery of four A380 super jumbo jets, ten Boeing 777-300 ER and six Boeing 777-200LRs in the last financial year. The airline currently has 132 aircraft with an order book of 161 more worth approximately $52 billion.

Combined aircraft orders by the UAE-based carriers have exceeded 400 with a book value exceeding $128 billion.

Anther large player in the region, Qatar Airways, has ordered 80 Airbus A350s, five A380s, 24 Airbus A320 family aircraft, 60 Boeing 787s and 32 Boeing 777s.

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