By Sneha Shankar - Japan’s SMBC Aviation Capital Ltd., an aircraft leasing company, said Monday that it will buy 80 737 MAX planes from The Boeing Co. in a deal worth more than $8.5 billion at list prices. The latest order, which will help cater to the growing demand for air travel in Asia, is the largest one by any leasing company for the narrow-body jet’s upgraded version.
The 737 MAX is best suited for short- and medium-haul flights and both companies said that the deal will help grow demand for the planes among low-cost carriers. SMBC has now become the fiftieth customer for the 737 MAX, which was launched in August 2011. Since then, the jet has secured more than 2,400 orders, including an $11 billion order from Ryanair in September. SMBC Capital is controlled by Tokyo-based Sumitomo Mitsui Financial Group, Inc.
The plane features a new engine developed by CFM, a joint venture between New York-based General Electric Co and French firm Snecma. The new engine is claimed to make the single-aisle jet 14 percent more fuel-efficient than current models of the 737 that Boeing makes. According to an estimate by the airplane maker, airline companies will need more than 25,600 single-aisle jets over the next 20 years.
Chicago-based Boeing, which has been operating in Japan for the past 60 years, considers the country to be one of its strongest markets. Japanese customers have bought more than 1,000 Boeing airplanes, including models like the 737, the 747-8 wide-body jet, the 777 series, the 787 Dreamliner, 737 MAX and the 777X, the statement said.
“Today's announcement from a top leasing company is a vote of confidence in our 737 MAX and helps SMBC Aviation Capital capture the strong demand in the single-aisle market," Boeing Commercial Airplanes President and CEO Ray Conner, said in the statement.