The Boeing 737 and its revamped progeny, the 737 MAX, showed little sign of losing sales momentum yesterday, as Irish leasing company Avolon committed to buy 10 B737 MAX 8s, five MAX 9s and 10 more 737-800NGs. The commitment carries a potential value of $2.3 billion and includes so-called reconfirmation rights for five more 737 MAXs.
Owned by four investors including the government of Singapore, privately-owned Avolon launched operations in Dublin in May 2010.
“We are hugely proud to be announcing our second order with the Boeing company,” said Avolon CEO Domhnal Slattery. “Our first was in Farnborough 2010, where as an infant start-up business we ordered 12 Boeing new generation 737-800s, which was as enormous vote of confidence frankly by the Boeing Company in our vision and our aspirations at the time.”
Scheduled for delivery in 2015 and 2016, the 737-800NGs represent a vital component of the deal, he added, not least due to the fact that the company has placed all of its previously purchased Boeing narrowbodies. “The demand for the 800 remains very strong on a global basis, but most importantly in these challenging financial times, capacity to finance these aircraft is strong,” said Slattery.
Boeing expects to start delivery of Avalon’s 737MAXs in 2018, said the Avolon chief executive, locking in “very important growth” in the business through the end of the decade.
“When you’re in the aircraft manufacturing business, you need to be thinking in 20, 30 or at times 40-year horizons,” said Slattery. “In the aircraft leasing industry, we like to be thinking on a 10-year rolling basis. So locking in this very valuable real estate really sets on a steady path for the growth and development of our business as we go forward.”
On hand for the signing ceremony, Boeing Commercial Airplanes CEO Ray Conner offered the customary congratulations, along with another vote of confidence for Avolon’s management. “We’ve known this entire management team for a long time,” said Conner. “And one of the reasons we did what we did two years ago was because of the individuals involved. These are top-notch professionals in the leasing and financing business. We view Avalon as a true strategic partner and we’re behind them all the way.”