Tue, Nov 11, 2014 - Page 15 News List

SMBC orders 80 Boeing airplanes in US$8.5bn deal

FLYING HIGH:The third-largest plane lessor in the world is expanding to tap into high-growth markets, especially Asia, according to its chief executive


Japanese aircraft leasing giant SMBC Aviation Capital yesterday said it had placed an order for 80 Boeing planes in a deal worth up to US$8.5 billion.

The company, owned by Sumitomo Mitsui Financial Group and trading firm Sumitomo Corp, said its purchase of the 737 MAX 8 aircraft marked the single largest order for the plane by a leasing company as it looks to further tap the lucrative sector.

SMBC, the world’s third-biggest aircraft lessor, already has a stable of more than 370 planes that it rents to carriers, with 95 airline customers.

The 737 MAX 8 — a 200-seat, single-aisle, fuel-efficient plane — is the main rival to the Airbus A320neo.

“Our expectation is that much of these aircraft ...will be placed in the high-growth, emerging markets, particularly in Asia where ...[there is] a lot of demand,” SMBC Aviation chief executive Peter Barrett told a press briefing in Tokyo.

“Certainly, we would also expect many of these aircraft will go to LCC [low-cost carrier] airlines,” he said.

In July, SMBC Aviation announced an order for 115 single-aisle Airbus A320s in a deal worth about US$11.7 billion at list prices.

The announcement yesterday comes less than a week after a property flagship led by Asia’s richest tycoon, Li Ka-shing (李嘉誠), said it planned to buy up to 60 passenger jets in a series of transactions that amount to more than US$2.5 billion.

SMBC’s latest deal comes amid fierce competition in the industry with a proliferation of budget carriers in the Asia-Pacific region.

China has lifted a six-year ban on creating private airlines, helping fuel demand for aircraft, and smaller passenger planes are increasingly in demand in Asia as budget carriers cash in on the region’s growing middle classes by expanding their reach to less prominent cities.

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