On June 19, 2009, during the Salon du Bourget Air Show, Jean-François Marchal, Global Head of the Structured Finance division and José Abramovici, Global Head of the Aviation & Rail Finance Group, held a press conference at Calyon’s head office.

Involved in aviation finance since 1975, Calyon has been among the global leaders for many years. Net banking income from aircraft financing accounted for 8% of Calyon’s Structured Finance division’s total net banking income for 2008. Net income was multiplied by 2.4 from 2004 to 2008 with the return on equity reaching 18% for the period.

Calyon received mandates for 120 aircraft in first half of 2009 including 50 that were delivered prior to June. For 2008 as a whole, the bank financed 120 civil aircraft.
Calyon’s portfolio now includes 890 aircraft of which 95% are less than 15 years old belonging to 120 different airlines and leasing companies around the world.

Thanks to low risk-related costs, the business is profitable over the long term and aviation financing uses less capital than the investment bank’s other business lines. Export credit agencies (Coface in France, ECGD in the United Kingdom, Hermès in Germany and U.S. Exim in the United States) fully guarantee the loans against buyer default. The overall volume of these guarantees is expected to double between 2008 and 2009, and Calyon is aiming at increasing its export credit market share.
“We have encountered no particular problems in 2009 and have even written back provisions from last year,” says Jean-François Marchal.

Despite a slowdown in air traffic this year, José Abramovici remains optimistic: “Despite the crisis and a declining market, we have not seen a drop in Calyon’s business volume with the highest-rated clients. According to our estimates, air traffic should pick up slightly in 2010 and renew with growth of more than 4% beginning in 2011.” By way of comparison, the aviation industry has experienced average growth of 5.3% per year since 1978.