$2.3bn deal for aircraft leasing firm

Irish-owned aircraft leasing company Avolon has struck a deal to buy 30 aircraft from Boeing in a deal valued at $2.3 billion (€1.87bn).

The Dublin-headquartered company will finance the deal for the 737 planes from existing lending facilities but will end up paying less than the $2.3bn list-price value.

The deal includes 20 of Boeing’s newest, most fuel-efficient 737 designs and will see Avolon take ownership from 2015.

It will also boost Avolon’s total fleet number to 135 aircraft.

The company’s chief executive, Domhnal Slattery, said securing some of Boeing’s new Max aircraft “ideally positions” Avolon “to best serve our global customer base”, with the deal as a whole reflecting “both the scale of our ambition and the strength of our financial backing”.

“It also reflects our commitment to our customers as we enhance our fleet, grow our business and continue to deliver superior risk-adjusted returns for our shareholders,” said Mr Slattery.

Avolon’s deal represents one of the first major lessor commitments for Boeing’s 737 Max planes.

Avolon buys aircraft from both manufacturers and airlines and then leases them out — typically for between eight and 10 years — to airline customers.

It currently has a fleet of 80 “delivered” planes, meaning that 80 of its craft are currently leased out to international airlines.

It also has commitments from customers for the leasing of another 25 — bringing its “committed” fleet up to 105.

The company has a target of reaching a delivered fleet of between 140 and 150 planes by 2014.

This number excludes this latest Boeing deal, which will basically begin Avolon’s next leasing tranche after 2015.

Boeing Commercial Airplanes president and chief executive Ray Conner noted that his company has had a good partnership with Avolon since theIrish company was set up two years ago.

“Avolon has a significant and strategic role to play in the aviation finance industry,” he said, before adding that the inclusion of the Max jets to its fleet will enable the Dublin company to offer its customers “unsurpassed fuel efficiency today and well into the future”.