A Boeing BOC Aviation deal worth $8.8 billion for 82 aircraft has been agreed, the Boeing Company announced. The Singapore-based airplane-leasing arm of Bank of China is purchasing 80 single-aisle Boeing 737 aircraft, including 50 of the latest, more fuel-efficient MAX model.
BOC’s order also includes two 777-300ER widebody jets. In a company statement, BOC says it already has a customer for the two jets.
This is BOC’s largest order ever. The leasing firm is banking on airline demand for new aircraft to serve the Asian travel boom.
According to the International Air Transport Association, air travel is set to grow by 5.7% annually for the next four years in the region. Boeing forecasts huge growth in aircraft sales in Asia during the next 20 years.
The sale follows BOC’s July order for 43 jets from arch rival Airbus.
According to Boeing, deliveries will start on 2016 and continue for five years.
Customers generally get a 30% to 40% discount on airplane list prices, although exactly how much they are sold for is not disclosed.
BOC Aviation is betting on strong growth in the Asian markets.
Strong demand for Next Generation 737 & 737 expected
Robert Martin, managing director and chief executive officer, BOC Aviation, said:
“Following the successful placement of the 50 Next Generation 737 aircraft that we ordered in 2006, this is a continuation of our commitment to be responsive to airline customers which are expanding or replacing older fleets. The 737 is known for its operational and fuel efficiency, and BOC Aviation expects healthy demand for the Next Generation 737 and 737 MAX variants in the next seven years.”
Mr. Martin said BOC plans more bond sales later this year and in 2015, and will also negotiate with banks to fund the purchase.
BOC’s order adds to its fleet, which is among the youngest in the aviation leasing industry, with an average of less than four years. It has 251 aircraft, including 118 Boeing planes in 27 different airlines.
Dinesh Keskar, senior vice president Asia Pacific and India Sales, Boeing Commercial Airplanes, said:
“BOC Aviation has established a proven track record in the airplane leasing industry. They have played an important role in the success of the Next-Generation 737 and the 777-300ER in the leasing market by helping place the airplanes with airlines worldwide. We’re excited about our continued relationship with BOC Aviation and look forward to working with them on the new 737 MAX.”
Airplane-leasing businesses either buy aircraft directly from Boeing, Airbus or other manufacturers and place them with customers, or purchase them from airlines under a sale-and-leaseback deal.
Boeing is based in Chicago, Illinois. The company employs about 168,000 workers worldwide.
