Embraer has got itself a strong new tool in doing business with new customers. The airframer has signed a Memorandum of Understanding with Apollo asset management for $1.5 billion in customer financing for its commercial aircraft business. Embraer secures new customer financing tool.
When airlines or lessors buy new or secondhand aircraft, only very few are in the position to finance them outright out of their pockets. Financing options are exhaustive and include bank loans, export credits, lease, sale and leaseback, and many more. OEMs like Boeing, Airbus, and Embraer have several options at their disposal to assist with customer financing, but the MoU with Apollo offers new opportunities to Embraer.
“Apollo can make a difference at every point in the customer financing journey, from Pre Delivery Payments and bridge facilities to long-term leasing and debt products across the widest range of asset types and ages,” said Gary Rothschild, Head of Aviation of Apollo and also CEO of its subsidiaries Merx Aviation and PK AirFinance, in a media statement. “We now have even more financing options for our customers thanks to a new capital partnership agreement with Apollo”, said Arjan Meijer, President and CEO of Embraer Commercial Aviation, in a post on LinkedIn.
Although officially still an MoU, the financing arrangement has already helped one of Embraer’s customers. Through Merx, the leasing and servicing affiliate of Apollo, Canada’s Porter Airlines has secured pre-delivery payments for six E195-E2s. “This transaction further underscores our ability to act as a dynamic liquidity and capital solutions provider for our airline customers and we look forward to working with the Porter team and building a long-term relationship,” said Rothschild.
With an order for another twenty E195-E2s at the Farnborough Airshow, Porter has fifty of them on order. The first aircraft has recently entered the final test phase and is expected to be delivered in due course. Porter announced today that in a separate agreement, it has concluded a sale and leaseback for six E195-E2s with lessor Truenoord. The aircraft are to be delivered in 2023 and are part of the first batch of thirty aircraft that were ordered in 2021. The airline has now secured lease agreements for 26 aircraft with five lessors.
