Boeing Co has won a $8.5-billion order from Japanese lessor SMBC Aviation Capital Ltd as Asian aircraft-leasing companies look to expand their fleets to cater to the region's travel growth, Bloomberg reported.
The order was for 80 Boeing 737 Max 8 models to be delivered between 2018 and 2022, according to the lessor's statement in Tokyo yesterday. The contract value was based on list prices and purchasers usually got a discount. The statement read that the deal was the largest single order of 737 Maxs by a lessor.
The agreement comes after a July deal by SMBC to purchase $11.8 billion worth aircraft from Airbus Group NV in the largest single-aisle plane order ever placed by a leasing company. Asian lessors had placed billions in orders this year as economic growth in China, India and Southeast Asia spurred demand for more aircraft. According to projections by Boeing and Airbus, China would overtake the US as the world's largest plane market in two decades.
China Aircraft Leasing Group Holdings Ltd (1848), the first Asian lessor to sell shares publicly, pledged to acquire 100 Airbus aircraft valued at $10 billion.
With the deal, SMBC becomes the 50th customer for the 737 since the launch of the plane in August 2011. Boeing had secured over 2,400 orders since then, Reuters reported.
"This order is another example of our history of partnership with SMBC Aviation Capital and Japan," said Ray Conner, president and chief executive of Boeing Commercial Airplanes, in a statement.
"Today's announcement from a top leasing company is a vote of confidence in our 737 MAX and helps SMBC Aviation Capital capture the strong demand in the single-aisle market."
The 737 Max comes with a new engine developed by CFM, a joint venture between General Electric Co's aviation unit and French firm Snecma, as also winglets and other improvements.
These help the aircraft to achieve over 14 per cent better fuel-efficiency than the current models of the 737, according to Boeing.
According to the projections of the US planemaker, airlines would need more than 25,600 single-aisle planes like the 737 and Airbus Group NV's A320 over the next 20 years.
"Today's announcement shows our ongoing commitment to the new generation of the popular 737 family, as well as our appetite to keep broadening and deepening our platform in order to service our customers' requirements," said SMBC CEO Peter Barrett in the statement.