Boeing inked a $9.6 billion contract with Los Angeles-based Air Lease Corp. (ALC) on Tuesday at the Farnborough Airshow that covers seventy-five 737 Max narrowbodies and three 787-9s. The deal consists of firm orders for 20 Max jets and all three Dreamliners.
Appearing with Boeing Commercial Airplanes CEO Kevin McAllister and v-p sales and marketing Ihssane Mounir, Air Lease CEO John Plueger noted that his company has now ordered 288 Boeing 737s, including 213 Maxs, as well as 52 Boeing 787s. Plueger revealed that the latest order gives ALC a flexible mix of Max 8s and Max 9s. He added that the company continues to evaluate the Max 10, and could potentially include that variant in the order as well. “We are still evaluating [the -10],” he noted. “It offers a compelling product for a certain number of operators, but that’s yet to be seen.”
Schedules call for deliveries to start in 2020 and extend into 2024.
Also appearing at the airshow, Air Lease executive chairman Steven Udvar-Hazy explained that negotiations over the deal lasted several months, during which time the leasing giant determined that it needed at least 200 Max jets in its fleet to meet airline demand. “This is also a reflection of the continued growth in the airline industry,” he said. “In the last 18 months, we’ve seen an average [passenger] growth worldwide of more than 7 percent. There’s also a huge replacement cycle to modernize airline fleets. So this order today really fits in with our strategy.”
Udvar-Hazy also addressed the potential market for Boeing’s proposed New Mid-market Aircraft (NMA), acknowledging Air Lease remains engaged in talks with airlines over the prospect. “There is a significant replacement market that’s emerging in the middle of the next decade, to replace aircraft that will be reaching 25 to 30 years of age,” said Udvar-Hazy. “Plus there’s an increasing shortage of slots at major congested airports throughout the world, where airlines can only add additional capacity with larger aircraft.”
Plueger concurred, citing strong interest in the market for the aircraft. “The business case is up to Boeing. I think that many of us that have a strong interest in this program have given certain guidelines and guidance a number of different things. The engine selection is a big part of this.”
