Get 40% Off
🤯 This Tech Portfolio is up 29% YTD! Join Now to Get April’s Top PicksGet The Picks – Just 99 USD

Air Lease CEO says oil price drop will not hurt demand for latest jets

Published 11/11/2014, 06:36 PM
Updated 11/11/2014, 06:40 PM
© Reuters Udvar-Hazy, ALC's Chairman and CEO, poses  in the first Air New Zealand A320 during a delivery ceremony in Colomiers

© Reuters Udvar-Hazy, ALC's Chairman and CEO, poses in the first Air New Zealand A320 during a delivery ceremony in Colomiers

By Jeffrey Dastin (Reuters) - Airlines are sticking with plans to buy the latest generation of fuel-saving passenger jets even though falling jet fuel costs have undercut the case for these planes, the head of one of the world's largest aircraft leasing companies said in an interview.

"These are short-term market dynamics," Air Lease Corp Chief Executive Officer Steven Udvar-Hazy told Reuters, referring to oil price moves. "We have not seen any diminishing of airline interest in aircraft that are more fuel efficient."

Brent crude oil prices have dropped to around $81 a barrel, levels at which airlines traditionally question making hefty investments in the latest planes.

But Udvar-Hazy said airlines still want carbon-fiber aircraft such as Boeing Co's 787 Dreamliner and Airbus's A350. Those models are more expensive than older metal aircraft such as the Airbus A330 and the Boeing 777 but burn less fuel.

Boeing and Airbus are competing for hundreds of billions of dollars in sales of 787 and A350 long-haul jets, both of which Air Lease Corp has ordered. Airlines often lease planes instead of buying them to give their fleets more flexibility.

Airlines also are keenly interested in planes that combine fuel-saving engines with the older metallic airframes, such as Boeing's 777X and Airbus' A330neo.

Air Lease Corp has placed 25 provisional orders for the A330neo and intends to finalize them in early 2015, Udvar-Hazy said.

© Reuters. Udvar-Hazy, ALC's Chairman and CEO, poses  in the first Air New Zealand A320 during a delivery ceremony in Colomiers

"It's a natural market progression for an airline that operates an older A330 or A340," Udvar-Hazy said, adding that Air Lease Corp is in active negotiations with many airlines interested in leasing the A330neo. "I've seen demand from every region of the world."

(Reporting by Jeffrey Dastin in New York and Tim Hepher in Paris; editing by Alwyn Scott and Cynthia Osterman)

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.