Leasing Companies Buy 400 Aircraft at Farnborough Airshow

Airplane in the sky

There’s always another story to top the last one. In a professional world dominated by middle-aged men, on the second day of the 2014 Farnborough Airshow, eight leasing companies ordered more than 400 aircraft at list prices valued at around $35 billion.

One leasing company, Netherlands-headquartered AerCap, who ordered 50 A320neos bringing their total commitments to 200 aircraft, is now Airbus’ largest customer overall, both in number and value of aircraft purchased.

And as predicted, buyers leapt at the chance to order Airbus’ “new engine option” on the wide-body A330neo. Most of the deal closers were leasing companies, who alone committed to purchasing 65 of the 105 A330neos ordered.

It was just the day before that Airbus announced they’ve build the neo version of the A330. They said they could sell a thousand of them in competition with Boeing’s Dreamliner.

Leasing companies also ordered 250 single-aisle Boeing 737 MAX and Airbus A320neo’s. The orders take the A320neo past the 3000 milestone since its launch in December 2010.

Airbus has just rolled out the A320neo. They’ll begin tests in September. First delivery is scheduled for late-2015.

Dublin-based SMBC Aviation Capital signed a deal for 110 A320neos and five A320ceos. It’s the largest single order for narrow-body aircraft by a leasing company. Valued at about $11.8 billion at list prices. SMBC is now committed to 206 A320 family aircraft.

Since 2000, the share of the world’s aviation fleet owned, managed or on order with leasing companies has increased from around 25 percent to close to 50 percent.

BOC Aviation, the aircraft leasing arm of Bank of China Ltd, placed an order for 36 Airbus A320ceo and seven A320neo planes. Reuters reported that 17 of the 43 would be a larger A321 version.

Consider the impact of BOC Aviation, just one leasing company based in Singapore. Their cumulative orders for new Airbus aircraft have reached 255, of which 142 have been delivered, and another 55 are committed to lease, according to the Centre for Aviation.

Air Lease Corporation also bid big. They ordered more ATR 72-600s, a French-Italian regional jet, bringing total orders to 28. But they also ordered 60 A321neos and selected engines for previously ordered 737 MAX 8 aircraft.

ALC also ordered 25 A330neos as well as six 777-300ER aircraft. The deal gives ACL its 100th Boeing 777. In total, they ordered 118 aircraft.

ALC’s market survey with its airline customers indicates there is a 1,100-aircraft market demand specifically for the A330neo between now and the end of the next decade.

CIT Aerospace ordered 30 aircraft, including 15 of the larger A330neo-900s. Deliveries of the aircraft are scheduled to begin in 2018.

CIT also bought five A321ceo, scheduled to begin arriving in 2015. They also purchased 10 Dreamliner 787-9s, valued at $2.5 billion at list prices. This brings the leasing company’s total 787 orders to 20, including 16 787-9s.

The first 787-9 is due to enter service with Air New Zealand later this year.

Intrepid Aviation ordered six 777-300ERs, as well as options for six more.

Airbus and Avolon agreed to 15 A330neo aircraft. With the order, Avolon’s owned, managed and committed fleet is 220 aircraft. Avolon now has 69 aircraft on order.

The Tarmac’s View: Airshows continue fielding large orders for aircraft. Last year the buyers were Gulf carriers, this year its leasing companies highlighting the importance they paly as major customers for aircraft manufacturers.

Airbus and Boeing forecast that beyond 2020, 50 percent of the global commercial aircraft fleet will be controlled by leasing companies. We’re almost there now. Most of them providing an avenue for airlines to get the newest aircraft available while expanding or replacing older fleets.

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