Avolon, a global leader in leasing, announced on Tuesday that it has agreed to purchase 100 A321neo aircraft from Airbus and 40 737 MAX aircraft from Boeing. The deal, according to its owner, is valued at a combined $18 billion at list prices.
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The Chinese owner of the Ireland-based lessor, Bohai Leasing Co Ltd, disclosed in filings to the Shenzhen Stock Exchange that the Airbus deal is worth approximately $12.95 billion, based on the manufacturer's 2018 list prices, while the Boeing deal is valued at about $4.9 billion. It's common for major airlines and lessors to receive substantial discounts from manufacturers. Bohai, which owns a 70% stake in Avolon, stated that the purchase price was "somewhat discounted" from the list price.
Avolon stated that the new jets are slated for delivery by 2032, which will expand its owned, managed, and committed fleet to 1,037 aircraft. This growth will propel Avolon ahead of SMBC Aviation Capital, making it the world's second-largest aircraft leasing firm. Lessors have seen benefits from the resurgence in travel demand following COVID-19 lockdowns and significant increases in lease rates due to a shortage of aircraft as manufacturers grapple with production increases.
In addition to the recent order, Avolon purchased 20 Airbus A330neos planes in September and 40 737 MAXs from Boeing in June. Leasing companies currently control over half of the world's aircraft fleet. Avolon CEO Andy Cronin stated in a press release, "Today's orders bolster our delivery pipeline and demonstrate our confidence in the long-term prospects for aviation. We have committed to direct orders for 200 new, fuel-efficient aircraft this year, aiding in the transition of our fleet to lower emissions aircraft."
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