Mystery 787 buyers: Royal Jordanian, Avalon

 - July 20, 2010, 11:32 AM
The unidentified customers for three Boeing 787-8s and twelve 737-800s came to light yesterday, with Royal Jordanian Airlines and newly formed leasing firm Avalon confirmed as the dealmakers.

Arab carrier Royal Jordanian Airlines and Avalon, a new aircraft-lease company, have been confirmed as the previously unidentified customers for three Boeing 787-8s and twelve 737-800s, respectively. Royal Jordanian’s order is valued at “approximately $500 million” and brings its 787 commitments to 11.

The airline, the first Middle East carrier to order the 787, had first ordered four examples in 2007; it also plans to lease two each from CIT Aerospace and International Lease Finance Corporation. Royal Jordanian plans to fly initially to Chicago, Detroit, New York, and Toronto.

"The [airplane’s] superior economics and range capability will allow us to competitively serve North America and other destinations from Amman," said president and CEO Hussein Dabbas.

Launched two months ago, Avalon now has commitments covering more than 30 Airbus A320s, A330s, and Boeing 737s. The 737-800s announced here yesterday are nominally worth $921 million and were first recorded as orders last December.
Avalon chief executive Domnhal Slattery said he expects single-aisle aircraft to comprise 80 percent of the fleet after five years. He is aiming to acquire about 150 machines, thanks to the “deep pockets” of his shareholders: Cinven, CVC partners, and Oak Hill Capital Partners. The lessor has headquarters in Ireland and other offices in Hong Kong, New York, and Shanghai.

Asked about interest in any prospective re-engined 737 that Boeing might offer, Slattery said Avalon had considered the idea for three months. “It is an extremely difficult question and [the project] will have to be paid for,” he said. He believes industry appetite has waned for a re-engined 737. “Ultimately, it is for the customer to decide, [but] we were concerned about residual values.”