Aerospace & Defense

Lessor SMBC orders 14 additional 737 MAX jets from Boeing

2 minute read

A Boeing 737 MAX airplane lands after a test flight at Boeing Field in Seattle, Washington, U.S. June 29, 2020. REUTERS/Karen Ducey/File Photo/File Photo

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DUBLIN, May 25 (Reuters) - Aircraft leasing business SMBC Aviation Capital has agreed to buy an additional 14 Boeing 737 MAX jets configured for low-cost carriers, with delivery starting later this year.

The company, a major Boeing (BA.N) customer, on Tuesday said the order is for jets that have already been built and will increase its MAX fleet to 121.

Last year during the grounding of the MAX and at the height of the COVID-19 pandemic SMBC deferred delivery of 68 jets by four years until 2025-2027 and indicated that it had not ruled out cancellations.

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But Chief Executive Peter Barrett on Tuesday said he was confident in demand for the MAX, which he said was finding increasing acceptance after regulators cleared it to fly late last year after its two-year grounding.

"We thought this was a good opportunity to increase our portfolio of young, fuel-efficient, environmentally friendly narrowbody aircraft - the kind of planes we think are going to be in demand as this recovery takes a firmer footing," Barrett told Reuters.

"There seems to be good acceptance for the aircraft with airlines and customers."

Aircraft leasing companies, which control more than 40% of the global fleet, are among the largest MAX customers.

Industry sources last week told Reuters that Boeing had drawn up preliminary plans to boost 737 MAX output to as many as 42 jets a month in fall 2022 from single digits now, preparing for a recovery from overlapping safety and COVID-19 crises. read more

Production was halted in 2019 when Boeing's fastest-selling model was grounded after fatal crashes. Production resumed last May at a fraction of its original pace while Boeing navigated regulatory approvals and a fragile supply chain.

SMBC Aviation Capital is owned by a consortium including Japan's Sumitomo Corp (8053.T) and Sumitomo Mitsui Financial Group (8316.T).

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Reporting by Conor Humphries, editing by Louise Heavens

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