Andrew Doyle/MUNICH
The major leasing companies are stepping up talks with Bombardier, Embraer and Fairchild over potential large orders for regional jets as airline demand for 50- to 100-seat aircraft accelerates.
Deutsche Bank-owned Boullioun Aviation Services is being tipped by industry sources as a likely front-runner with a possible commitment for up to 80 aircraft by the first quarter of next year. GE Capital Aviation Services (GECAS) and International Lease Finance (ILFC) are also evaluating whether to expand their portfolios to include regional jets.
Regional manufacturers have previously adopted operating lease-type finance structures to help smaller carriers expand into jet operations, which has discouraged the specialist leasing companies from entering the market on a large scale.
Boullioun confirms it is in talks with all three manufacturers, but says it has yet to reach a conclusion on the size of the market. "We've been looking at the regional jet market with a fair amount of interest over the last few months," confirms Boullioun chief operating officer John Willingham.
"That market certainly has come into its own with the big orders from the US majors, but what we're not sure about is whether the market is broad enough beyond that," he adds. Willingham says that Boullioun needs to identify "40 airlines that we feel are candidates for potential leasing opportunities" before placing an order, probably for 70- and 90-seaters.
GECAS is also in talks with the manufacturers and is seen as a likely purchaser of regional jets, as General Electric's CF34 engine powers the Bombardier Canadair Regional Jet, Embraer's ERJ-170/190 and the Fairchild 728JET family. Industry sources suggest that the availability of GECAS funding to aid aircraft sales helped GE win the Embraer powerplant competition for its new family of 70- to 110-seaters. GECAS says it "does not comment on industry rumour or speculation".
ILFC is showing strong interest in the regional jet market, but would need to bolster its marketing resources to manage and place a fleet of 70- and 90-seat aircraft. "We're still studying the regional jet market and how it's going to shape up," says an ILFC source.
"We like the 728JET and the stretched 90-seater which we think are great products for the regional market," the source adds. Talks are gathering pace because the leasing firms believe whoever gets into the market first will have an advantage, as a large number of airlines which want to acquire regional jets are struggling to secure financing.
Source: Flight International
