Business World

Thursday 20 June 2019

Airbus 'close to aircraft deal' with latest Irish lessor

 

Domhnal Slattery, chief executive of Avolon, which agreed a deal with Airbus late last year
Domhnal Slattery, chief executive of Avolon, which agreed a deal with Airbus late last year

Tim Hepher

Airbus has been chasing deals with leasing companies in recent weeks to try to narrow a gap in orders against rival Boeing, while experts debate whether the plane-maker met its delivery target after shares took a beating.

The outcome of the recent leasing talks could affect a tighter-than-expected race for orders in 2018, although Airbus is relying on a recent burst of orders for a newly acquired Canadian jet programme and lags Boeing on a like-for-like basis.

The last-minute order flurry complicates a jigsaw of data awaited by investors as uncertainty lingers over whether Airbus met its crucial aircraft delivery target for 2018 - a reliable guide to profits and a barometer of supply chain tensions.

Industry sources have said Airbus was unlikely to meet the 800-jet goal (782 excluding the Canadian A220), but others said Airbus could still spring a surprise after workers delivered jets late on New Year's Eve that had not been expected to make the cut.

Bloomberg News reported on Thursday that Airbus had delivered more than 790 and fewer than 800 aircraft in 2018.

Shares in Airbus rebounded 3pc on Friday after falling as much as 7.9pc on Thursday due to doubts over deliveries and what dealers described as a possible trading error.

Airbus is due to announce final figures on January 11, but without the fanfare of an annual news conference that for years featured outspoken former sales chief John Leahy as the company reins in communication before its full results, due on February 14.

On the race for new orders, Irish leasing company SMBC Aviation was in talks with Airbus in the closing stretch of 2018 and looked close to signing an order to expand its narrow-body fleet by several dozen jets, industry sources said. SMBC Aviation and Airbus declined to comment.

Airbus was also said to be scouting for business in China, where it has a deal pending with lessor ICBC for 80 jets. A provisional order was announced at the Farnborough Airshow last July, but the name of the buyer was never officially disclosed and the order is not yet on Airbus's books.

People familiar with the deal linked it at the time to ICBC Leasing, one of China's fastest-growing leasing companies.

A similar deal for 100 planes from Chinese-owned lessor Avolon, whose chief executive is Irishman Domhnal Slattery, was confirmed in December. Both Airbus and Boeing typically turn to leasing companies to stay afloat when economic concerns deter airlines, but the financiers who now control about half the world fleet pick their moment carefully in order to capture the steepest discounts.

Reuters

Sunday Indo Business

Also in Business