Boeing, Airbus poised for leasing-company jet orders
Airbus SAS and Boeing Co. are poised to win orders this week from plane-leasing companies returning to the market after the economic crisis, said four people familiar with the planned announcements.
Royal Bank of Scotland Group Plc's leasing unit, General Electric Co.'s GECAS and Steven Udvar-Hazy's Air Lease Corp. probably will be among the biggest buyers, said the people, who declined to be identified because terms aren't public. Air Lease may take about 50 planes each from Boeing and Airbus, one person said. GECAS may buy at least 30 jets, two people said.
The orders at the Farnborough Air Show starting today in England will help make up for the dearth at last year's Paris Air Show, where planemakers focused on holding onto contracts as demand for new planes waned during the recession.
"You're not going to see the leverage from these financing or leasing companies that we saw in the past, but we've also seen a number of new people enter the marketplace," Boeing's commercial-plane chief, Jim Albaugh, said in London yesterday, without elaborating. "Some of the announcements you'll see this week will be orders from these leasing companies."
Boeing spokesman Mike Tull and Airbus spokesman Rainer Ohler declined to comment about any orders, as did Dan Whitney, a GECAS spokesman. Air Lease's outside public-relations firm in Los Angeles had no immediate comment. RBS spokesman Nigel Meffen said he had no immediate comment.
'Be Surprised'"You'll be surprised by some of the announcements we'll make," Airbus Chief Operating Officer John Leahy said at a press conference in London on July 17. "The world economy is turning around."Leasing companies are signaling that they can spend again with the economy recovering and questions about their ownership resolved. That's a boost for planemakers, because lessors are their biggest customers, and the purchases reflect airlines' demand for replacement planes as well as for expansion.Air Lease, the company Udvar-Hazy founded this year, said last week it plans to have more than 100 jets by early 2011. RBS Aviation Capital was no longer considered a unit central to its parent's business in 2009, and the bank explored options including a potential sale, a plan RBS has since dropped.GECAS, with the world's largest fleet of owned and managed aircraft, is an area GE Chief Executive Officer Jeffrey Immelt is seeking to grow as he shrinks other parts of the financing business such as real estate and consumer lending after the financial crisis.2009 ComparisonsLeahy said Toulouse, France-based Airbus can double the 131 orders it won in the first half of 2010 during this week's show. Albaugh said Boeing has raised its internal order forecast twice this year."I would have told you maybe four, five months ago that maybe we wouldn't have announced many orders, if any, at the air show," Albaugh said yesterday. "Now we're going to announce quite a number."The Chicago-based company won commitments for 9 aircraft at last year's Paris show, compared with Airbus's 69. The Paris show alternates with Farnborough each year. Boeing is also set to win an order from Emirates Airline at the show, two other people familiar with the planned announcement said.Shares RiseInvestors in Boeing and Airbus parent European Aeronautic Defence Space Co. are reflecting renewed optimism compared with a year earlier. Boeing gained 14 percent this year through July 16, closing at $61.90 in New York, while EADS rose 17 percent to 16.42 euros in Paris. For the same period in 2009, Boeing fell 1.5 percent and Airbus slid 1.2 percent.American International Group Inc.'s plane-leasing unit, International Lease Finance Corp., also is in talks to buy jets for the first time since 2007 as the company stabilizes after AIG's federal bailout, according to new CEO Henri Courpron.ILFC was founded in 1973 by Udvar-Hazy, who sold it to AIG in 1990. He built it into the world's largest plane lessor and Boeing and Airbus's biggest customer before resigning in February. Courpron said in a July 2 interview that it was possible ILFC would announce orders at the Farnborough show.