January 20, 2014 / 8:50 PM / 4 years ago

GECAS orders 40 Boeing 737s worth $4 billion

DUBLIN (Reuters) - GECAS, the world’s largest aircraft leasing company, announced an order for 40 Boeing (BA.N) medium-haul passenger jets on Monday, in a fresh boost for the U.S. planemaker’s best-selling model.

Confirming an earlier Reuters report, GECAS said the order would be split between the current-generation Boeing 737-800 and the future 737 MAX, a revamped jet designed to save fuel with the introduction of new engines, starting in 2017.

GECAS is owned by General Electric (GE.N), which makes the engines for the 737 family in a transatlantic joint-venture shared equally with 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 this week celebrates its re-emergence as a major finance hub after AerCap (AER.N), which owns the rump of GPA, bought its U.S. rival ILFC (AIG.N).

    Following completion of the deal, both AerCap and GECAS will hold most of their aircraft on the books in Ireland, which is attractive to leasing companies because of a 12.5 percent corporation tax and a global network of tax deals.

    News of the order came as financiers began annual meetings in an upbeat mood about demand for the 737 and other aircraft, at a conference in Dublin 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 like GECAS, which rent them out for a monthly fee and collect advances towards heavy jet maintenance costs.

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

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