SMBC Aviation Capital has ordered 14 additional 737-8 MAX aircraft, to boost its fleet as airlines prepare for a robust return to air travel. Deliveries of the aircraft type are scheduled to commence in late 2021 and continuing into 2022.
"We are pleased to have concluded an agreement with Boeing for the purchase of 14 low-cost carrier configured 737 MAX aircraft which is an aircraft we are seeing increased customer demand for following its successful return to service," said Peter Barrett, CEO of SMBC Aviation Capital.
The new purchase builds SMBC Aviation Capital's 737 MAX portfolio to 121 aircraft. SMBC Aviation Capital has continued to incorporate new 737 MAX airplanes into the global fleet. In the first quarter of 2021, the lessor delivered 13 737-8s to customers, including 11 planes to Southwest Airlines and two planes to TUI.
"SMBC has been actively managing its portfolio in a very dynamic market. With this new order for the fuel-efficient 737-8, the lessor is well positioned to help its customers capture domestic travel demand in several countries and regions," said Ihssane Mounir, Boeing senior vice president of Commercial Sales and Marketing. "We are honoured by SMBC's trust in the 737 family, and we look forward to partnering with them to support airlines for the market recovery ahead."
Some 83% of SMBC Aviation Capital’s portfolio is comprised of narrowbody aircraft. Fuel efficient, lower-emission new technology assets now represent 57% of portfolio and expected to grow to 80% within three years, confirmed the lessor.
SMBC Aviation Capital has also announced a profit for its full financial year ended 31 March 2021. The leasing company said that it generated profits of $15.2 million in FY 20202 “continuing its 20 years record of operating profitability, despite the worst year the industry has ever experienced”.
During the year, shareholder support for SMBC Aviation Capital increased by $1.2bn to $11.8bn comprising $3.1bn equity and $8.7bn debt. At the end of March 2021, SMBC Aviation Capital had available liquidity of $4.9bn. its A- ratings were confirmed by S&P and Fitch.
SMBC Aviation Capital closed $3bn of new transactions during the financial year, which equates to 29% of pre-COVID portfolio and includes $1.1bn of transactions in North America and airline counterparties include EasyJet, Wizz, Southwest, Delta, United, Peach.
Commenting on the company’s performance, CEO Peter Barrett said: “Despite the challenges and ongoing uncertainty from Covid-19, SMBC Aviation Capital’s balance sheet strength, focused high-quality asset portfolio and rapid realignment of capex to close $3bn of transactions with leading airline credits, has anchored highly resilient performance over the year, strongly positioning us to be a leading beneficiary of the recovery now taking place.
“We believe that 2021 will be an inflection point for the industry and that our focus on the newest technology, lower carbon emitting, narrowbody aircraft types places us on the right side of customer demand for the short-haul and low-cost carrier led recovery that is underway. We are pleased to have concluded an agreement with Boeing for the purchase of 14 low-cost carrier configured 737MAX aircraft which is an aircraft we are seeing increased customer demand for following its successful return to service.”
“As airlines focus on repairing their balance sheets, we expect to see increasing demand for our leasing product and we are strongly positioned to emerge from the crisis with renewed momentum and seize further opportunities that are aligned with our long-term strategy.”