With the aviation sector rocked by the effects of the coronavirus pandemic, the Japan Bank for International Cooperation (JBIC) has inked a guarantee agreement to boost the import of Boeing and Airbus planes.

JBIC penned the deal with four separate banks and has agreed to back the principal and interest of their loans to Japan Airlines (JAL).

The export credit agency (ECA) will cover a total principal amount of ¥88.4bn, after signing the agreement with MUFG, Mizuho, Sumitomo Mitsui Banking Corporation and the Bank of Kyoto.

In a statement, JBIC says that the guarantee is intended to support JAL in obtaining financing from these private financial institutions to import eight aircraft from Boeing in the US and Airbus in France.

“Thus it [the guarantee] will contribute to maintaining and improving the international competitiveness of the Japanese aviation industry,” it adds.

JBIC’s move follows the French government announcing export credit support as part of a €15bn rescue package for the aerospace sector, which has felt the effects of global Covid-19 containment measures acutely.

For months Airbus – which is based in Toulouse – had been calling for the state to bolster support to its customers, with struggling airlines having started deferring or even cancelling orders from the manufacturer.

With governments the world over imposing travel restrictions and stay-at-home orders in a bid to contain the spread of Covid-19, aviation tracking site FlightRadar data shows a 77% drop in the number of global passenger flights since January 2020.

JBIC previously moved to support Japanese airlines this year, signing two guarantee agreements in the weeks before the coronavirus crisis fully engulfed the industry.

However, the size of the latest financing dwarfs the previous deals.

In February, JBIC struck a ¥12.7bn guarantee agreement with eight banks to help All Nippon Airways’ (ANA Holdings) acquire Boeing aircraft. Meanwhile in March, JBIC agreed to provide ¥12bn in cover for JAL to import planes from Airbus in France.