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SMBC Aviation Capital places order for 14 Boeing 737Max planes

US aviation regulator Federal Aviation Administration had late last year approved the return to service of Boeing 737 Max with extensive fixes. (Photo: AFP)Premium
US aviation regulator Federal Aviation Administration had late last year approved the return to service of Boeing 737 Max with extensive fixes. (Photo: AFP)

  • The Boeing 737 MAX aircraft, considered a more fuel-efficient plane than its predecessors, was grounded by the DGCA on 13 March, 2019, in line with other after aviation regulators worldwide, following the crash of an Ethiopian Airlines 737 MAX killing 157 people, including four Indians

NEW DELHI: SMBC Aviation Capital, based out of Dublin and among the world's largest aircraft leasing companies, has placed orders for 14 737Max aeroplanes with Boeing Co, the US-based aerospace major said in a statement on Tuesday.

The new purchases will take SMBC Aviation Capital's 737 MAX portfolio to 121 jets.

"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, chief executive officer at SMBC Aviation Capital.

SMBC Aviation Capital owned 496 aircraft, which were leased to different clients, including airlines, across the world, at the end of 31 March, 2021.

The Ireland-based company had in 2018 signed a deal with Jet Airways (India) Limited, involving the sale and leaseback of 13 Boeing 737 MAX 8 aircraft.

Jet Airways discontinued operations in April 2019 due to a massive fund-crunch. The airline was subsequently dragged to the bankruptcy court by lenders. A resolution plan involving new owners is yet to be approved by the court.

Most airlines carry out sale and leaseback (SLB) of their aircraft to remove the aircraft, and its associated debt, from the carrier’s balance sheet.

An SLB is a transaction in which the owner sells the aircraft to an aircraft lessor, and then takes it back on lease from the buyer.

In the first quarter of 2021, SMBC Aviation Capital delivered 13 737-8s to customers, including 11 planes to Southwest Airlines in the U.S. and two planes to TUI in Europe.

SMBC Aviation Capital's latest purchase of 14 Boeing 737Max aircraft follows recent orders and commitments from Alaska Airlines, Southwest Airlines and United Airlines, Boeing said in a statement adding that the total number of gross orders and commitments for the 737 MAX this year now exceeds 250 airplanes.

The Boeing 737 MAX aircraft, considered a more fuel-efficient plane than its predecessors, was grounded by the Indian civil aviation regulator The Directorate General of Civil Aviation (DGCA) on 13 March, 2019 after aviation regulators worldwide did the same following the crash of an Ethiopian Airlines 737 MAX near Addis Ababa on 10 March, killing 157 people, including four Indians.

This followed a Boeing 737 MAX of Lion Air crash last October 2018 that killed 180 people in Indonesia.

US aviation regulator Federal Aviation Administration (FAA) had late last year approved the “return to service" of 737 Max with extensive fixes. This was followed by several other global aviation regulators approving the return to service of the aircraft.

However, the DGCA is yet to allow the aircraft to resume operations in India. Currently, SpiceJet Limited is the only Indian airline that operates Boeing 737 Max planes.

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