AIRCRAFT lessor SMBC Aviation Capital has entered into a contract to acquire 60 medium-haul passenger jets, signaling confidence in the ongoing recovery of air travel post-Covid crisis, reports Tokyo's Nikkei Asia.
The purchase, which includes Airbus' A320neo, known for its fuel efficiency, is valued at over US$3.4 billion based on market prices.
Financing for this acquisition will be facilitated through a combination of bank loans and bond issues.
As the world's second-largest aircraft leasing company, SMBC Aviation Capital boasts shareholders such as Sumitomo Mitsui Finance and Leasing and Sumitomo Mitsui Banking Corp.
The company contributed nearly JPY20 billion (US$13.5 million) to Sumitomo Mitsui Financial Group's profits from April to September this year.
The decision to increase aircraft leasing aligns with a broader industry trend, with leasing companies currently owning about 47 per cent of passenger aircraft.
Despite the recent uptick in interest rates, SMBC Aviation Capital anticipates a limited impact on its finances, as payments for the order will be made in installments.
The company also aims to leverage the size of the order to negotiate favorable pricing terms.
Single-aisle narrow-body jets like the A320neo are particularly popular for domestic routes and constitute 70 per cent of the world's passenger jets.
The average market lease fee for SMBC Aviation Capital's A320neos is estimated to range from US$280,000 to $380,000 monthly.
Various airlines' widespread adoption of the A320neo enhances its liquidity, making it an attractive asset for potential future sales.
In addition to this Airbus order, the company previously ordered 25 medium-haul Boeing jets in September, bringing its fleet to around 1,000 aircraft and solidifying its position as a medium-haul aircraft specialist.
This marks SMBC Aviation Capital's first significant fleet expansion since the onset of the Covid crisis.
SeaNews Turkey
The purchase, which includes Airbus' A320neo, known for its fuel efficiency, is valued at over US$3.4 billion based on market prices.
Financing for this acquisition will be facilitated through a combination of bank loans and bond issues.
As the world's second-largest aircraft leasing company, SMBC Aviation Capital boasts shareholders such as Sumitomo Mitsui Finance and Leasing and Sumitomo Mitsui Banking Corp.
The company contributed nearly JPY20 billion (US$13.5 million) to Sumitomo Mitsui Financial Group's profits from April to September this year.
The decision to increase aircraft leasing aligns with a broader industry trend, with leasing companies currently owning about 47 per cent of passenger aircraft.
Despite the recent uptick in interest rates, SMBC Aviation Capital anticipates a limited impact on its finances, as payments for the order will be made in installments.
The company also aims to leverage the size of the order to negotiate favorable pricing terms.
Single-aisle narrow-body jets like the A320neo are particularly popular for domestic routes and constitute 70 per cent of the world's passenger jets.
The average market lease fee for SMBC Aviation Capital's A320neos is estimated to range from US$280,000 to $380,000 monthly.
Various airlines' widespread adoption of the A320neo enhances its liquidity, making it an attractive asset for potential future sales.
In addition to this Airbus order, the company previously ordered 25 medium-haul Boeing jets in September, bringing its fleet to around 1,000 aircraft and solidifying its position as a medium-haul aircraft specialist.
This marks SMBC Aviation Capital's first significant fleet expansion since the onset of the Covid crisis.
SeaNews Turkey
