The year 2020 was a difficult for year for engine maintenance providers, forcing some towards creative solutions to support their revenues.
General Electric, for example, accessed export credit guarantees to support maintenance work for some of its customers.
In its recent 2020 report to Congress, the Export Import Bank of the United States (Ex-Im) revealed that it had supported roughly $40 million worth of engine maintenance work during the year through three deals led by UK Export Finance.
This was for engine overhaul work performed at GE’s UK facilities.
In the aviation context, export credit is typically associated with aircraft sales, but it will be interesting to see if further support emerges for the aftermarket this year, when many MRO customers still face significant financial distress.
If this is to occur, however, the pot for US companies such as GE would appear to much smaller than for European exporters of goods and services: Ex-Im noted that in 2020 it was only 13th among global export credit agencies (ECAs) by volume of financing guaranteed.
The total for the U.S. ECA was $1.8 billion, which compared with $12.1 billion for France in second place and $8.6 billion for Germany in third.
In fact, eight European countries were ahead of the US by export credit volume in 2020, and while these are supporting financing for many industries, about two-thirds of France’s volume related to new aircraft contracts.
In part, Europe’s lead over the US in this respect reflects a widening of export credit remits to support jobs and assist Europe’s recovery from the pandemic, but Ex-Im also highlighted reluctance among U.S. exporters to use its support "because of the Bank’s relatively longer due-diligence processes and documentary burden compared to foreign ECAs”.
