GE Capital Aviation Services (GECAS), the world¹s largest aircraft leasing and financing company, is in the news this year and at this show. In June, the company placed a massive order for up to 450 regional jets; earlier this week it announced plans to buy 10 of the new Boeing longer-range 777Xs, with 10 options. Karen Walker talks to the company¹s president, Henry Hubschman.
Q Your most recent order, announced at Farnborough 2000, is for the longer-range 777X. What has prompted GECAS to add this aircraft to its portfolio?
A The 777s have established a strong imprint on the marketplace. For the nearer term, they require no significant infrastructure changes as will be needed for the A3XX. My sense is that at the right price, terms and conditions, the 777X is a very good bet.
Q What is your view of the very large aircraft market right now?
A All the signs suggest that both Airbus and Boeing will be in the market, but back in 1996 it looked like Boeing would launch the 747-500 and -600, so I don¹t think we know anything for certain yet. At GECAS, we like to hear from our customers about what they thinking. The A3XX is a step forward from what anyone has ever done in the past. Generally, I think it is too early to know, although things have certainly changed since April/May. Since that time, it has looked more likely than not that this will go ahead.
Q Could you see GECAS purchasing the A3XX for the lease market?
A It¹s too early to tell. There are so many terms and conditions to be considered on an aircraft of that size. We need to keep in touch with the manufacturers and the customers and reconcile the different views. I think we will be in a better position to make that judgement in the next few months. But GECAS is different from other leasing companies because we are also as much a financier of aircraft as a lessor. So the A3XX may not be a perfect outleasing aircraft, but we may get involved in a deal as a financier.
Q GECAS has just ordered up to 450 regional jets from the three main manufacturers, Bombardier, Embraer and Fairchild Dornier. What attracted you to this market at this time?
A Like anything else, it comes down to pricing. The RJ market has always been an abstract îyes¹, but you have to wait until the price is right. We are convinced that the RJ will have a greater growth rate than the rest of the market. That makes it of interest to us. Secondly, having financed a bunch of these aircraft recently, we became convinced we could make a reasonable return by either outleasing or financing them. We concluded that if we could get them on the right terms, they would be useful additional assets.
Q You bought 50 aircraft from each of the manufacturers, as well as placed 100 options with each. What was the strategy behind taking a cross-section of RJ types?
A We wanted all three assets because we want to be a comprehensive solutions provider to the airlines.
Q What sort of airline customers do you anticipate for these RJs?
A I would not rule out the larger regionals, even though they are placing their own large purchase orders for RJs.
We are in advanced discussions with some full-service airlines that are looking for RJs ¡ not in hundreds, like the Delta Connection order, but in ones, fives, sevens, nines and 12s. You keep adding those numbers up around the world and you should have no problem leasing or financing these aircraft.
Q What is your view of the 100-seater market and how that will evolve?
A I think it¹s still in a considerable state of flux. The obvious question is what aircraft, if any, will take the dominant position in replacements for the DC-9s. Will it be the RJs coming from below or the Airbus A318/Boeing 717 coming from above? That¹s why we have built in some flexibility by including some Bombardier CRJ900s in our order.
Q What is GECAS doing on the e-commerce front?
A We are very active. We are trying to make doing business with us simpler by increasing the functionality of our website. We are displaying that at Farnborough. The very advanced, nimble and efficient airlines are euphoric about this; some are more cautious until we can show them what it can do. We want to enable our core process so that the customer can do everything in a very frictionless way. Ultimately, they will be able to do every transaction with us on-line. This is something we¹ll do right; with the GE name on it, we always do it right.
Source: Flight Daily News
