DUBLIN, April 27 (Reuters) – International leasing big Avolon mentioned on Thursday it had dedicated to ordering 40 Boeing (BA.N) 737 MAX plane in a deal value over $4 billion at present record costs, a lift for the U.S. planemaker because it grapples with recent supply points.
Avolon, the world’s third largest plane leasing agency, mentioned the brand new jets are scheduled for supply from 2027 to 2030 and can enhance the general measurement of its owned, managed and dedicated fleet to 870 plane.
The deal comes a day after Boeing mentioned it deliberate to ramp up manufacturing of 737 MAX jets through the again half of the yr to make up for a slowdown within the second quarter to repair manufacturing points.
“Boeing are clearly working by their points that are properly documented. We at our core believe within the fundamentals of the (MAX) program and Boeing’s functionality to ship these plane,” Chief Govt Andy Cronin advised Reuters in an interview.
Cronin mentioned the brand new manufacturing subject at Boeing will delay a few of its plane deliveries however to not the diploma the place it is going to require a compensation dialogue or essentially influence its enterprise.
Earlier than Thursday’s transaction, rival Airbus’ (AIR.PA) best-selling A320neo household of jets made up 184 of the 252 jets Avolon had dedicated to purchasing.
Cronin confirmed that Avolon understood that Airbus had contacted a “huge variety of prospects” about impacts to manufacturing schedules for subsequent yr. Reuters reported on the supply delays final week.
He mentioned the industry-wide provide chain points had eased over the previous two to 3 quarters.
“However I believe everyone seems to be practical… We see these challenges persisting by the top of this yr and into subsequent yr for positive,” Cronin mentioned.
The Dublin-based lessor delivered $599 million of lease income and internet earnings of $56 million within the first quarter, citing sturdy demand for plane and excessive ranges of leasing exercise amid a continued scarcity of jets.
Reporting by Padraic Halpin
Enhancing by Tomasz Janowski
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