Tuesday 23 July 2019

SMBC chief predicts rise of smaller transatlantic jets

Savings: SMBC chief executive Peter Barrett says improved fuel efficiency will help airlines cut costs
Savings: SMBC chief executive Peter Barrett says improved fuel efficiency will help airlines cut costs
John Mulligan

John Mulligan

Passengers should get used to crossing the Atlantic on narrowbody, single-aisle aircraft, as more airlines opt to fill lower-demand routes with jets such as Boeing's new 737 variants, the boss of an Irish aircraft-leasing giant has said.

Low-cost operator Norwegian already uses the Boeing 737 Max to fly from Ireland to the United States, while IAG-owned Aer Lingus uses the older single-aisle Boeing 757 to fly to some east-coast US destinations, including Hartford in Connecticut, and Philadelphia.

Aer Lingus will take deliveries of four single-aisle A321LR aircraft this year. They'll be deployed on routes from Dublin including Hartford, Montreal and Minneapolis-St Paul.

"It will become an increasing factor, but it's unlikely to become dominant," said Peter Barrett, the CEO of Dublin-based SMBC Aviation Capital.

"The public likes flying point-to-point. It's not going to work for every route, but I certainly think we'll be seeing more of that," he said.

SMBC has just completed an order for 50 Airbus A320neo and 15 A321neo jets, with a combined list price of more than $7.4bn (€6.5bn).

It brings SMBC's total owned, managed and on-order fleet to 720 jets.

The A321neo is the largest Airbus single-aisle jet, while the A321LR is the longer-range version of the aircraft.

The A320neo offers a 20pc fuel saving advantage over older generation aircraft from that family, and Mr Barrett said that despite jet-fuel costs having fallen, fuel savings are still an important factor for airlines when weighing which aircraft to deploy.

"Fuel efficiency is, in our view, an important part of this," said the SMBC boss. "It's a highly competitive business. We believe that the relative fuel benefits of the neo and the Max relative to the previous generation aircraft is, over time, going to make a real difference to airlines.

"We see that our airline customers are increasingly focusing on the fact that as these airplanes become more prevalent, that it's an important element when they think about their fleet," he added.

"Particularly for an airline operating a fleet of smaller aircraft, if you're making 10pc, 15pc or 20pc fuel savings on operating one type of aircraft, over time, even with [fuel] prices where they are today, it's going to add up to a real difference."

Irish Independent

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