Monitoring aeronautical operations: visions of the portfolio management in the aviation and defense sector exports support

Abstract

Commercial aircraft sales are typically associated with long-term financing in a highly volatile sector. This is mainly due to structural reasons – such as the price of aviation fuel and currency fluctuation against the US dollar – as well as the risk of events that are difficult to predict, such as natural phenomena, geopolitical conflicts or terrorist attacks. For these reasons, and also due to institutional attribution, it proved to be imperative to carry out a continuous and thorough monitoring of aircraft financing operations, their guaranties and their debtors. Such activity includes monitoring the borrower’s compliance with all contractual obligations throughout the life of the loans. This text reviews the scope of the aircraft finance portfolio management work at BNDES in light of its characteristics and specific processes that have been prepared and refined by the Aircraft Export Finance Portfolio Management team, Foreign Trade Department, in the Industry, Services and Foreign Trade Division for the past ten years