The European Regions Airline Association (ERA) is calling on members to take advantage of European Investment Bank (EIB) funding for new aircraft purchases.

The EIB, which is owned by the EU member states, created the €1 billion ($1.2 billion) fund in 2016 after lobbying from the ERA member airline CFOs, who were struggling to source financing for new regional aircraft orders. Under the facility, the EIB lends the money to local banks, which funds the airline directly at competitive rates.

In 2017, Spanish and Dutch regionals Air Nostrum and KLM Cityhopper became the first to use the money, drawing down a total of €500 million to fund Bombardier and Embraer aircraft.

Speaking at a recent media briefing in London, ERA director general Montserrat Barriga urged other ERA member airlines to make use of the financing, which runs until around 2020.

“We have the money available, but it needs to be used over the next couple of years,” she said. “We don’t have the problem of wanting more money; we just want more airlines to benefit. Some of our airlines go to the second-hand market, but the EIB is very strict. They want to fund [new] aircraft that have a more positive environmental impact.”

ERA worked hard to ensure that four or five operators could benefit from the money, rather than securing the funding as a single block. “Having the potential to split this between different airlines was not easy,” Barriga said, adding the remaining €500 million is unlikely to go to just one airline.

Also, Air Nostrum and KLM Cityhopper have laid the groundwork so accessing the facility will be easier for other ERA members.

“This hadn’t been done before, so the whole process took almost a year of work for Air Nostrum and KLM. It was a big project, but they had the size and the resources. Now it’s much more reachable for smaller airlines to apply for the money,” ERA president and ASL Aviation Group director corporate affairs Andrew Kelly said.

“There is still almost €500 million left. We will seek to get this increased, but the first thing we need is more airlines to take it up, because until we show there is demand to the EIB, it will be difficult to get more.”

Victoria Moores victoria.moores@informa.com