AerCap’s chief executive officer Aengus Kelly tells Airfinance Journal in an interview that the Boeing 777X market is a niche aircraft.
To date, none of the seven identified customers for the 777X is an operating lessor - a move that Kelly is not “too surprised” by.
“It is not really a lessors’ product to be fair because the user base is niche,” he says.
“The reason why we move so many 777s is because the user’s base is big. So you always find a home. When it gets to very large aircraft and very small aircraft, the user’s base shrinks,” he adds.
Kelly has no doubt that if AerCap were to order the 777X, finding a lessee won’t be too difficult. But he has concerns on second and third leases.
“The question is ‘what would happen after the first lease?’ How many airlines have the route network to support those aircraft of that size.”
The 777X models have racked orders from Middle East airlines, but earlier this week Singapore Airlines committed to order 20 Boeing 777-9s along with 19 787-10s.
“I think you are going to see the 777X as a product for very big global scheduled airlines,” he says.
Kelly does not envision the aircraft “transitioning” into the operating lease market. “It’s always been an unsuccessful foray by operating lessors. There is always a good reason to do a bad deal at the start because the yields look attractive. Then you try to convince yourself and get a boost to the near term, but it all ends in tears because the user’s base is not going to get enough for it.”
Competitors Avolon, Air Lease and CIT Aerospace all have taken early slots in the Airbus A330neo market, but AerCap is not interested in the widebody. “We think the A350 and the 787 are the long-term aircraft for the future and we will stick with them.
E2 premium
At the other extreme of its orderbook, AerCap is the launch customer for the E2 products with a firm order for 50 E2-190/195s and a further 50 on option, an order it inherited via the acquisition of ILFC.
Kelly says AerCap has placed about 20% of its E2 orderbook so far.
“I would hope that by this time next year, we would have moved 40% of the orderbook,” he says.
“We are moving them along. So far it is in line with how many we are moving.”
He says E2 commands a lease rate premium over the E1 generation aircraft.
“As we go forward we think the E2 generation will emerge as the successful regional jet. Historically this has been a tough business with too many manufacturers chasing too small of a space. You look at Airbus and Boeing, which are not selling really selling A319neo and 737Max7 products. It is a small market for that.”
The majority of operating lessors opt for the mainstream aircraft, such as the A320neo and 737Max, and Kelly believes few lessors will moving into the E2 market.
Lorem ipsum dolor sit amet, consectetur adipiscing elit. Phasellus ultrices urna eu consequat pulvinar. Suspendisse malesuada scelerisque iaculis. Cras ut facilisis arcu, posuere efficitur nisi. Fusce dictum tortor ac nibh rhoncus auctor. Praesent nunc felis, elementum vel orci quis, sodales tincidunt nisi. Vestibulum vestibulum vel erat quis feugiat. Nam nec pulvinar velit. Nunc feugiat felis lacus, non condimentum urna interdum vitae. In laoreet hendrerit commodo. Sed diam arcu, tincidunt quis augue ac, venenatis consequat dui. Quisque maximus venenatis erat, sed malesuada quam malesuada at. Aenean non quam a ex vulputate laoreet. Praesent eget neque convallis, rhoncus lorem a, venenatis metus. Maecenas sed malesuada purus.
Integer vel neque vel odio tempor laoreet. Praesent vel malesuada dolor, sit amet aliquam augue. Cras magna tortor, ullamcorper nec tristique ac, accumsan quis metus. Integer in magna sit amet leo vulputate vulputate. In pretium quam libero. Cras a pulvinar arcu, et rutrum orci. Proin euismod, justo quis scelerisque porttitor, purus odio dignissim ex, eu rhoncus lorem dolor sit amet mi. Pellentesque in massa vel mauris tempus euismod. Aenean efficitur vestibulum arcu ut elementum. Nam rhoncus ligula vel enim iaculis, quis luctus dui interdum. Nulla erat mi, lacinia eu orci ut, hendrerit fermentum lorem. Sed non gravida quam. Pellentesque habitant morbi tristique senectus et netus et malesuada fames ac turpis egestas. Nulla bibendum erat odio, pharetra lobortis eros blandit a.
In et ultrices ante. Vestibulum consequat libero quis quam tempor, efficitur accumsan lacus sollicitudin. Class aptent taciti sociosqu ad litora torquent per conubia nostra, per inceptos himenaeos. Phasellus ac est lacus. Quisque in interdum urna, non pulvinar sem. Duis tristique tortor vel urna commodo tincidunt sit amet ut sem. In sapien turpis, porta vitae neque in, varius egestas erat.
Interdum et malesuada fames ac ante ipsum primis in faucibus. Donec quis est vel ante facilisis efficitur. Pellentesque tincidunt odio eget lacinia vestibulum. Aliquam erat volutpat. Ut ac ipsum non nisi convallis eleifend et ornare lectus. Pellentesque diam nulla, dapibus quis convallis sed, posuere at urna. Proin tincidunt tincidunt nibh, id molestie est. Integer iaculis, leo sit amet pulvinar pellentesque, tellus elit vehicula ipsum, eget vulputate dui tortor vitae sem. Proin rhoncus venenatis tellus, vitae blandit ipsum malesuada sed. Morbi gravida magna hendrerit faucibus imperdiet. Ut bibendum a massa at efficitur. Donec egestas urna urna, sit amet mattis erat fringilla sit amet. Integer scelerisque enim sed odio semper molestie. Sed tincidunt malesuada nulla a fringilla. Nullam suscipit, justo nec facilisis efficitur, arcu mauris finibus lorem, ut egestas mi purus nec neque. Nunc nec euismod est, ac egestas neque.
Vivamus sit amet pretium quam, vitae fringilla dolor. In nec ligula arcu. Fusce a tortor leo. Sed blandit leo quis turpis sodales, eget tincidunt tortor ultrices. Fusce scelerisque eros quis quam vestibulum tempus. Praesent sodales aliquam nibh vel fermentum. Quisque vel diam sit amet sem convallis interdum. Proin ac velit molestie, malesuada tellus vitae, tempus est. Sed facilisis ut enim ac pretium. Mauris scelerisque fermentum risus, nec ultricies enim finibus vel. Aenean sem enim, dictum mollis aliquet nec, consequat nec nisl. Duis aliquam a lectus vitae ornare.