NICHOLAS IONIDES / SINGAPORE
Singapore Aircraft Leasing Enterprise (SALE) has ruled out near-term orders for new aircraft with either Airbus or Boeing and will instead focus on adding to its portfolio through purchase and leaseback agreements.
The weak leasing environment, as well as costs associated with four Airbus A320s previously in service with now-defunct Ansett Australia, contributed to a sharp drop in pre-tax profit last year.
SALE's earnings fell to $20.7 million for the year ended 31 March 2003 from $37 million the previous year, although revenue increased to $158.7 million from $155.6 million.
The lessor considered placing a major aircraft order last year but decided against it, primarily because the manufacturers were not willing to offer deals as good as they were giving to airlines. SALE has 21 Airbus aircraft remaining from previous deals - all of which are due for delivery by 2007.
"I don't see a good reason right now to place another order," says SALE managing director Robert Martin, noting that no leasing companies have placed major orders since the 11 September terrorist attacks in the USA.
"We did look at it, but the prices weren't right - not for today's lease rentals. We talked to them [Airbus and Boeing] on a preliminary basis on prices. For leasing companies, they weren't really prepared to give a good deal.
"Our view is that's fine - if they are going to [give good deals] to airlines we don't care how we buy the aircraft. We'll deal then on purchase and leasebacks with airlines." Martin says.
SALE's portfolio comprises 52 Airbus and Boeing aircraft.
Source: Flight International
