ILFC orders 100 Airbus A320neos, 33 Boeing 737s
Airplane leasing giant ILFC boosted Airbus's single-aisle jet strategy by ordering 100 new A320s with the new engine option, with Pratt & Whitney's geared turbofan as the engine of choice. ILFC ordered only 33 of Boeing's rival 737 jets for nearer term delivery. However, ILFC also canceled an order for ten of Airbus's superjumbo A380s.
Seattle Times aerospace reporter
International Lease Finance Corp. (ILFC) announced large jet orders Tuesday that give a big boost to Airbus' plans for new engines for its A320 family, while it offered a smaller, consoling order to Boeing for the rival 737.
The giant airplane-leasing company ordered 100 of the new Airbus single-aisle jets — known as A320neos, for "new engine option" — validating Airbus' decision in December to go forward with a new engine.
Those planes won't be available until 2016. For the nearer term, ILFC also ordered 33 Boeing 737-800 single-aisle jets, with deliveries beginning in 2012.
The Airbus order is worth $9.5 billion at list prices, although after typical discounts estimated by aircraft-valuation firm Avitas the actual value is just over $5 billion.
However, ILFC also dealt a large-jet blow to Airbus by canceling a previous order for 10 A380 superjumbos. The cancellation slashes almost $3.8 billion off that list-price total or about $1.9 billion off the real value.
The Boeing order is worth $2.7 billion at list prices; based on Avitas-estimated discounts, its actual value is just over $1.5 billion.
The mismatched single-aisle orders clearly represent a win for Airbus' strategic decision to go for new engines and push development of an all-new single-aisle jet into the next decade.
In contrast, Boeing executives have signaled emphatically they likely won't put new engines on the 737 and will instead go for a new airplane before the end of the decade.
Boeing's leadership still hasn't firmly made up its mind, and a final decision is expected at the Paris Air Show in June.
For now, Airbus has the momentum.
ILFC's Airbus order is split between 75 A320s and 25 larger A321s.
"We are delighted to welcome ILFC as the first lessor to order the A320neo," said Airbus sales chief John Leahy in a statement.
The planes will be powered by new Pratt & Whitney geared turbofan engines, which promise more than 10 percent better fuel efficiency than the current engines on Boeing and Airbus single-aisle jets.
That's just the latest boost for the Pratt & Whitney engine, which already is set to power the new Bombardier CSeries and Russian MS-21 single-aisle jets.
With the addition of winglets, which Airbus marketing refers to as "sharklets," the plane maker claims the A320neo will deliver a 15 percent improvement in fuel efficiency over the current A320s.
That will leapfrog the 737, which Boeing claims has a 5 percent fuel-efficiency advantage today over the current A320s.
The 737s that ILFC will take from 2012 will have additional performance packages that improve fuel efficiency by a further 2 percent.
They will also feature the new 737 "Sky Interior," a redesign of the passenger cabin that gives much more headroom to passengers.
The downside of ILFC's announcements for Airbus was the cancellation of the double-decker A380 jets.
Leahy minimized the significance of that move.
"The A380 is a long-term program," Leahy said. "This year we've already won two new A380 customers and there are more queuing up."
ILFC is a subsidiary of insurance giant AIG, which was bailed out by the U.S. government in 2008 after a liquidity crisis, initially with an $85 billion package, with later loans and lines of credit boosting its financial backing to more than $180 billion.
Before and through that crisis, ILFC — which was founded and run by aviation entrepreneur Steven Udvar-Hazy — was profitable.
The financial pressure on AIG made it impossible for ILFC to borrow to finance airplane orders at competitive rates, and Udvar-Hazy left to form his own airplane leasing company.
New ILFC chief Henri Courpron, a former Airbus executive, has worked on turning around the company's position.
In the past year, it regained ability to buy airplanes through more than $14 billion in financing and aircraft sales, followed by a $2 billion revolving unsecured line of credit from 11 banks.
ILFC owns about 930 jet aircraft.
Dominic Gates: 206-464-2963 or email@example.com