Nov. 6 (Bloomberg) -- Airbus SAS and Boeing Co. may end up with as many as 200 new planes without buyers next year because airlines are unable to obtain funds to pay for them amid a global credit squeeze, industry consultant Ascend said.

``There's a funding gap and we don't really know where the money is coming from,'' said Eddy Pieniazek, a director of Ascend, which provides airlines with fleet analysis and aircraft valuations. ``If the money doesn't arrive, you can quite easily see 200 new aircraft, or `whitetails,' parked in a desert.''

Banks have curbed lending to airlines because of increased concerns about getting their money back amid the global economic slowdown and weakening travel demand. That may create a funding gap of as much as $20 billion for Airbus and Boeing plane deliveries, expected to total about $65 billion next year, according to JPMorgan Securities Inc.

``Nobody is getting out of this alive,'' Bill Cumberlidge, director of aviation asset finance at Allco Finance Group, said at a Hong Kong conference yesterday. ``The debt market is dead.'' Allco handed operations to outside managers on Nov. 4 after warning it may default on debt.

`Zero Liquidity'

Damage from the credit crunch has accelerated after Lehman Brothers Holdings Inc. and Washington Mutual Inc. collapsed, the U.S. government took control of Fannie Mae, Freddie Mac and American International Group Inc., and Merrill Lynch & Co. and Wachovia Corp. were purchased by rivals.

``There's almost zero liquidity at the moment,'' said Vicente Alava-Pons, regional head of aviation at DVB Group Merchant Bank (Asia) Ltd. ``It will take longer for the banks to come back because there will be more writedowns.''

Borrowing costs have tripled compared with six months ago, according to Alava-Pons, declining to be more specific. DVB may extend $1 billion in loans to finance aircraft in 2009, less than half of the more than $2 billion it provided this year, he said.

``The market has dried up,'' Eddy Porwanto, executive vice president for finance at PT Garuda Indonesia, said on Oct. 31. ``Some of the potential lessors that we were talking to have pulled out.''

Garuda Indonesia

Garuda, Indonesia's biggest airline, is seeking financing for the remaining 14 of 25 Boeing 737 planes it has on order, said Porwanto. The carrier already secured funding for the 11 aircraft through so-called sale and leaseback agreements.

Leasing companies and banks will account for about 60 percent of the aircraft-financing market this year, according to JPMorgan.

Difficulties in obtaining financing are adding to the problems at airlines worldwide, which are already struggling to cope with higher fuel costs and slowing demand for air travel.

Cathay Pacific Airways Ltd., Hong Kong's largest carrier, yesterday said that results this year will be ``disappointing.'' Air France-KLM Group, Europe's biggest airline, said it will be ``very difficult'' to meet full-year earnings targets as the global credit crisis and slowing economic growth undermine demand for travel.

Cathay fell 14 percent to HK$8.08 at the close of trading in Hong Kong today, extending losses for the year to 60 percent.

Boeing Capital

Boeing Capital Corp., the planemaker's financing arm, expects to extend $1 billion to customers next year. Still, liquidity is starting to return after central banks worldwide cut interest rates, said Managing Director Kostya Zolotusky. Funding needs will likely be lower than in the aftermath of the Sept. 11 terrorist attacks, when it financed as much as $3 billion of aircraft annually for three years, he added.

``People have greatly underestimated what export credit agencies are going to fund,'' Zolotusky said. ``No one has accounted for regional banks.''

Chinese banks are financing all deliveries to local carriers, while the majority of planes for the Japanese market are being funded by domestic lenders, according to Zolotusky.

Airbus, the world's biggest commercial-plane maker, has also received some requests for funding, said Chief Operating Officer John Leahy.

``Airbus is certainly willing to support airlines as we have in downturns'' before, he said.

Boeing has had two order cancellations this year and 80 deferrals, said Vice President Randy Tinseth. Customers are likely to delay more new planes as the economy slows, he added.

``The good news is we have airlines that are willing to move up and take those deliveries,'' Tinseth added.

Whitetails

Even if manufacturers boost financing and export credit agencies increase their contribution from the $11 billion to $12 billion level in 2008 by 50 percent, ``they may not be able to make up the difference, which could result in production cuts or ``whitetails,'' Joseph Nadol, a New York-based analyst at JPMorgan, wrote in an Oct. 20 report.

Whitetails are brand new planes, straight off the assembly line, but with tails that lack the logos of airlines because carriers aren't able to accept them.

Some airlines have asked DVB to provide ``bridging'' solutions, or short-term loans, to make payments for planes, a sign that new aircraft may be put in storage, Alava-Pons said.

The lack of funding is also pushing the value of second- hand aircraft lower, said Mike Skinner, chief executive officer at aviation consultant AMS Aircraft Ltd.

Airlines including Cathay, which on Nov. 1 said it plans to sell five aircraft to slow fleet expansion, may not be able to find a buyer.

``The problem is, people may want the aircraft but can't finance them,'' Skinner said.

To contact the reporter on this story: Chan Sue Ling in Singapore slchan@bloomberg.net

Last Updated: November 6, 2008 04:44 EST