Bloomberg News

Boeing Nears First Lessor Deal for MAX as Air Lease Weighs Order

June 12, 2012

Boeing Co. (BA:US) may be poised to win the first order by a lessor for its 737 MAX jet as Steven Udvar- Hazy’s Air Lease Corp. (AL:US) considers whether to buy as many as 100 of the new single-aisle planes.

Performance guarantees and “economic parameters” are still under discussion, Udvar-Hazy, Air Lease’s founder and chief executive officer, said in an interview in Beijing at the annual meeting of the International Air Transport Association. Air Lease is studying a deal for 60 to 100 jets, he said.

Signing up a lessor would broaden the customer base for the MAX, the latest version of the top-selling 737. Boeing’s three confirmed orders for the plane, which features upgraded, more- efficient engines, are all from airlines, according to the Chicago-based planemaker’s website.

“What we’re seeing is most demand coming from airlines is for replacing their less-efficient, less-economical aircraft,” Udvar-Hazy said. “It’s not so much for growth.”

Udvar-Hazy, 66, earned a reputation as the godfather of jet leasing by founding International Lease Finance Corp. in 1973 and building it into the industry’s largest company before selling it to American International Group Inc. (AIG:US) He left ILFC in 2010 and started Los Angeles-based Air Lease the same year.

Air Lease signed a firm order this month for 36 Airbus SAS A320Neos, the plane that competes with the MAX. A MAX order would provide Udvar-Hazy with the two jets that will be most widely introduced into fleets from 2015.

Udvar-Hazy didn’t say whether a decision on the MAX would come as soon as the air show next month in Farnborough, England, a venue often used to showcase orders. The A320Neos are scheduled to start coming off assembly lines in late 2015, while the first 737 MAX planes will be available starting in 2017.

The Boeing and Airbus models are roughly comparable, Udvar- Hazy said.

“Our best estimate on the 737 MAX is about a 12 to 13 percent improvement in unit-cost economics versus the 737-800,” he said. “And the Neo is looking to be 14 to 15 percent better on the A320 and A321. So they’ll be quite close in terms of net results.”

--Andrea Rothman in Beijing. Editors: Ed Dufner, Benedikt Kammel

To contact the reporter on this story: Andrea Rothman in Beijing

To contact the editors responsible for this story: Benedikt Kammel at; Ed Dufner at

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Companies Mentioned

  • BA
    (Boeing Co/The)
    • $132.78 USD
    • 1.08
    • 0.81%
  • AL
    (Air Lease Corp)
    • $37.46 USD
    • -0.04
    • -0.11%
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