Irish firms place €10bn of orders for airplanes at Paris show
IRISH aircraft-leasing firms placed $11bn (€9.87bn) of orders at the Paris Airshow.
AerCap’s order for 100 Boeing jets accounted for the bulk of the buying, with rival SMBC snapping up 10 passenger planes from the US maker.
The massive Irish orders helped push Boeing ahead of European rival Airbus in the battle for commercial air supremacy.
AerCap’s deal to buy 100 737 MAX 8 jets is worth $10.7bn at list prices.
AerCap, listed on the New York Stock Exchange, is formally headquartered in the Netherlands but is effectively run out of offices in Shannon and Dublin.
Aercap chief executive officer (CEO) Aengus Kelly said the deal came together in the final days before the show, with Boeing saying it wanted to “make this happen”.
Aercap is also interested in buying larger 737 MAX 9 to help replace ageing models in its fleet, Mr Kelly said.
Meanwhile, Dublin-head- quartered SMBC Aviation Capital, headed by Peter Barrett, agreed to buy 10 Boeing 737 MAX 8s.
The aircraft-leasing sector, which buys planes and leases them to airlines, is growing thanks to rising demand in Asia and Central and South America, as well as the need to replace ageing planes in Europe and North America, Mr Barrett said.
Air travel has doubled since the 9/11 tragedy in 2001 and is 25pc higher than at the start of the financial crisis, he said.
Consolidation will continue in the aviation-leasing sector following a wave of multi-billion euro deals, Mr Barrett said.
His company sees itself as a consolidator in the sector and will look at opportunities, he said.
“As one of the largest players we are in a position to take advantage of that,” Mr Barrett said.
SMBC Aviation is owned by Japan’s Sumitomo Mitsui Banking Corporation.
While the Irish are buying in Paris, the number and size of deals so far is below that of many recent trade shows, when cheap borrowing costs and strong growth in passenger numbers encouraged airlines to splash out on new, more fuel- planes. “The market is definitely slowing,” said Sash Tusa, aerospace and defence analyst at Agency Partners. “There are fewer orders this week than there have been at any air show in recent years. Manufacturers are going to have to fight much harder for what’s available.”
Shares in Seatle-based Boeing rose in the US, up slightly to €142.33 each yesterday afternoon. The company is already
planning to increase output of its popular 737 narrow-body jet to 52 a month in 2018 from 42 currently.
However its commercial airplanes chief, Ray Conner, said the company would be cautious about taking any decision to raise production towards 60 a month – a level mooted as possible for both Airbus and Boeing.
“We are going to be very prudent in how we approach any rates above 52. It feels like the demand is higher than that, but that can be short-lived. So we are... going to see how things progress,” he said.
“The worst thing for any of us is to oversupply; our intention is to not oversupply.”
He also warned Airbus against possibly seeking government help to develop its A380 superjumbo. (Additional reporting Reuters/Bloomberg)