A $12 billion leasing spree lifts air show

FARNBOROUGH, England (Reuters) - Aircraft leasing firms made a major comeback on Monday, as industry veteran Steve Udvar-Hazy dropped $4 billion on A320s and former arch-rivals at General Electric doubled his efforts.

General sentiment at the Farnborough Airshow, the industry's largest gathering, was that the lessors' flurry of activity proved the industry was starting a meaningful recovery from recession.

"2011-2012 is the time when the rising tide will lift all ships," Bombardier Commercial Aircraft President Gary Scott told reporters.

Hazy, the mastermind of the aircraft leasing industry who recently started afresh after leaving AIG, ordered 51 narrow-body Airbus planes and said he would buy more planes soon.

"We have a lot of old and loyal airline customers," he said. "Lessors are capturing a larger and larger segment of the total population of airliners."

The leasing arm of GE weighed in with an order for 100 similar planes -- 60 from Airbus and 40 from Boeing -- worth a total $8 billion, and delegates said Hazy could lift the combined tally to 200 planes.

Leasing firms, which buy aircraft to be lent out to airlines, are the first to flee the market when traffic and business decline and first to come back when activity improves.

"Right now you are looking at a very strong return for those leasing companies. There is a strong demand for these products and they seem to be taking advantage," said Richard Aboulafia, Vice President at Virginia-based consultancy Teal Group.

MIDDLE EASTERN FOCUS

There was also plenty of focus on Middle Eastern buyers at the show, given their propensity for large orders.

Dubai's Emirates placed a $9 billion order for 30 Boeing 777 large passenger jets, just six weeks after making an $11 billion order for superjumbo Airbus A380s.

On the other hand, Qatar's national carrier Qatar Airways, expected to make a splash at the show, only bought a couple of Bombardier executive jets.

Qatar Airways chief executive Akbar Al Baker told reporters he was prepared to order Bombardier's new single-aisle C-series passenger jets but "some issues" had come up during talks.

Bombardier later told Reuters the issues were between Qatar Airways and Pratt & Whitney, the United Technologies Corp unit that makes engines for the C-series.

CLOSED-DOOR DEALING

The wheeling and dealing was typical for Farnborough, otherwise a sleepy southern English town that hosts a massive aviation and arms jamboree every other year, rotating with Le Bourget near Paris.

Much of the real business done or prepared at the show is in invitation-only chalets of defense companies, even though several have reduced their presence to display belt-tightening, and arms makers are bracing for heavy Western defense cuts.

U.S. Defense Security Cooperation Agency Director Jeffrey Wieringa told Reuters a deal was near on the sale of fighter jets to Israel, specifically the first foreign military sale of the Lockheed Martin F-35 Joint Strike Fighter outside of the eight partner nations.

"The ball is in their court," Wieringa said. "I am waiting for them to make a decision any day."

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(Additional reporting by Andrea Shalal-Esa, Kyle Peterson, Rhys Jones, Golnar Motevalli, Editing by Dan Lalor)