GECAS may order 40 Boeing 737s worth $4 billion: sources

DUBLIN Mon Jan 20, 2014 6:08am EST

Brazilian airline Gol's Boeing 737-800 aircraft takes off at Congonhas airport in Sao Paulo January 17, 2014. REUTERS/Nacho Doce

Brazilian airline Gol's Boeing 737-800 aircraft takes off at Congonhas airport in Sao Paulo January 17, 2014.

Credit: Reuters/Nacho Doce

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DUBLIN (Reuters) - GECAS, the world's largest aircraft leasing company, is close to placing an order for around 40 Boeing (BA.N) medium-haul jets, industry sources said on Monday.

The order may include a mixture of revamped Boeing 737 MAX aircraft, designed to save fuel with the introduction of new engines from 2017, and Boeing's best-selling current model, the 737-800.

Such an order would be worth some $4 billion at list prices if split evenly between the two models.

Boeing and GECAS both declined comment.

GECAS is owned by General Electric (GE.N) which makes the engines for the 737 family in a transatlantic joint-venture co-owned by France's Safran (SAF.PA).

In October 2012, GECAS ordered 75 Boeing 737 MAX jets and 10 current 737-800s and took options for up to 15 additional 737-800s. Boeing's 737 competes with the Airbus (AIR.PA) A320.

GECAS was formed in 1993 after GE acquired most of the aircraft of the collapsed leasing empire of Irish entrepreneur Tony Ryan and combined it with its own Polaris operation. Most of its 1,700 aircraft are still managed in Ireland.

Ireland has re-established itself as a global aviation finance hub, after AerCap (AER.N), which owns the rump of GPA, bought its main U.S. rival ILFC from U.S. insurer AIG (AIG.N), strengthening its position as industry no.2.

Following completion of the deal, both companies will hold most of their aircraft on books in Ireland for tax reasons.

Aircraft financiers began annual meetings in Dublin on Monday at a conference hosted by Airline Economics.

About 40 percent of the world's $100 billion annual deliveries of commercial jets are distributed to airlines via leasing companies, which rent them out for a monthly fee and collect cash advances towards heavy jet maintenance costs.

(Reporting by Tim Hepher, Conor Humphries; Editing by Victoria Bryan)

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