January 19, 2015 / 8:15 PM / 5 years ago

UPDATE 1-AerCap CEO says will act in shareholders' interest on AIG stake

(Adds more comments on 737 Max, oil prices)

DUBLIN, Jan 19 (Reuters) - The head of aircraft leasing firm AerCap declined on Monday to be drawn on whether it might buy back stock that could come on the market from its leading shareholder, but stressed it would act in the interests of its investors.

U.S. insurer AIG owns 46 percent of the world’s largest independent aircraft lessor after selling leasing company ILFC to AerCap in a $7.6 billion part-paper transaction completed in 2014.

A lock-up on AIG’s stake expires progressively, starting from next month.

Asked in an interview whether AerCap would consider buying back all or part of the shares from AIG, Chief Executive Aengus Kelly told Reuters, “We are just very disciplined with the money of our shareholders and will do what’s best for them: whether it is paying down debt, buying airplanes or buying back shares”.

AerCap has said its priority is to continue reducing its debt during the integration of ILFC, which Kelly earlier told the Airline Economics conference in Dublin was ahead of schedule.

Kelly also remained non-committal on whether AerCap would place an order for 737 MAX aircraft directly from manufacturer Boeing.

It stands out as one of the few major Western lessors yet to order the jet, inheriting a stance adopted earlier by ILFC.

“I’m sure we will buy, but we have to make a fair return on it. I can buy the plane in the market, no problem,” Kelly said, referring to an alternative strategy of buying newly delivered jets from airlines and renting them back.

“We’re always talking and I’m sure we’ll reach terms. There’s always a bid in: whether they (Boeing) like it or not is another matter,” he added.

Kelly told the conference that lower oil prices would not dampen demand for such jets, in part because fleet purchases are long-term decisions.

“No airline in the world will bet its future on fuel being low for 15 years,” Kelly said.

Reporting by Tim Hepher; Editing by Victoria Bryan

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