International Lease Finance Corp, the world’s biggest plane leasing company, said it will order 100 narrowbody planes from EADS unit Airbus and 33 narrowbodies from Boeing Co., and scrap an order for 10 Airbus A380 super jumbo aircraft.
The orders from the aircraft leasing unit of insurer American International Group Inc. are potentially worth $11.2 billion at average list prices. The canceled A380 order, which had been in jeopardy for some time, was potentially worth $3.75 billion.
The orders mark the first for ILFC since October 2007 and are a sign of health for the lease company, which was hurt by the financial crisis that caused the near-collapse of parent AIG. ILFC signed a new $2 billion revolving credit agreement in January, a key step as it considered ordering planes.
AIG executives have said ILFC might eventually be sold.
“It’s a sign that the leasing activity from one of the industry’s top players is back,” said Peter Arment, an aerospace analyst with Gleacher & Co. “They clearly remain confident about future global capacity requirements.”
ILFC’s orders for 75 A320neo and 25 A321neo jets are a strong vote of confidence for the upcoming revamped versions of the best-selling A320 family. The planes will feature new engines that offer greater fuel efficiency.
The orders may put new pressure on Boeing, the world’s second-largest commercial plane-maker, as it decides whether to rebuild or re-engine its 737.
“It does speak to the need for a re-engine, especially as the A380 was scrapped and (ILFC) went for shorter-haul jets,” said Alex Hamilton, managing director of EarlyBirdCapital.
Boeing has said it is leaning toward building an all-new version of its 737, but has not made a decision. A re-engined plane would be brought to market quicker than a new plane, but would offer less fuel savings.
