Alan Dron
International Lease Finance (ILFC) yesterday announced plans for the largest order yet for the Boeing Next Generation 737 family and says it is looking carefully at the sub-100-seat market.
Steven Udvar-Hazy, ILFC president and chief executive officer, says his company has agreed a firm order for 50 Next Generation 737s, with a further 50 "subject to reconfirmation".
The deal is currently for 737-700s and 737-800s, but allows a degree of flexibility to switch some of the orders to the 737-900 if necessary.
Udvar-Hazy declines to place a value on the contract "but we did not pay the retail price". The deal is nevertheless unlikely to be valued at much less than $2 billion.
Formalities
ILFC expects to complete legal formalities for the first batch of 50 next month, but "all business terms have been agreed with Boeing".
ILFC's interest in the sub-100-seat market has seen Bombardier, Embraer and Fairchild all called in to give detailed presentations. "We're trying to understand the market," says Udvar-Hazy.
"A lot of large airlines have cost structures where it's difficult to make money using smaller jets."
However, "there is a premium factor, particularly when replacing turboprops. It's definitely going to be the wave of the future; it's a question of trying to understand the strength of that wave."
Yesterday's order announcement takes ILFC's Classic and Next Generation fleet of 737s to 390. First deliveries under the new contract will start in early 2001 and continue to 2007 if all 100 are eventually confirmed.
Contract
The contract is worth up to $1 billion to engine manufacturers CFM International, if the full 100 aircraft are eventually ordered. CFMI will supply the CFM56-7 for the aircraft.
Udvar-Hazy adds his company has reached agreement with US carrier Sun Country Airlines for six Boeing 737-800s, with options on a further two. Deliveries will take place between January and December next year.
Minnesota-based Sun Country has this month begun scheduled services to 16 destinations, following 16 years' experience in the charter market. It currently operates a fleet of 12 Boeing 727-200s and four McDonnell Douglas DC-10s.
Source: Flight Daily News
