Embraer Wins Financing Reprieve

 - April 3, 2007, 8:02 AM

GE Capital Aviation Services last month secured $220.8 million in financing from Brazil’s BNDES development bank for 10 Embraer 170s destined for US Airways, LOT Polish Airways and Alitalia. The deal came after BNDES president Carlos Lessa told Embraer last year to start seeking other sources of financing for this year’s airplane deliveries. Embraer blamed financing delays for last year’s disappointing financial performance.

The agreement marked only a temporary reprieve for the airlines, in particular US Airways, whose credit rating has dropped to a C+++ and which has yet to arrange for loans to cover most of the 80 Embraer 170s it has ordered. It leases all of the airplanes it has taken so far from GECAS, and must still find a way to finance the 55 airplanes not covered by GE’s leasing arm.