DUBLIN- SMBC Aviation Capital has inked lease agreements with United Airlines (UA) for 20 Airbus A321neo aircraft.
The deal, part of United’s April fleet plan, will see deliveries starting in 2026. These aircraft will come from SMBC Aviation Capital’s direct Airbus order book.
United Leases Airbus A321neo
This announcement follows a recent sale and leaseback transaction between the two companies involving 20 Boeing 737-8 MAX aircraft. The expanding partnership highlights SMBC Aviation Capital’s growing influence in the aircraft leasing sector.
United Airlines’ Chief Financial Officer, Michael Leskinen, emphasized the strengthening relationship between SMBC and United. He stated that these leases play a crucial role in optimizing United’s balance sheet and boosting return on capital.
Barry Flannery, Chief Commercial Officer at SMBC Aviation Capital, expressed enthusiasm about supporting United’s fleet growth strategy. He noted that the new, fuel-efficient aircraft would contribute to United’s expansion plans.
SMBC Aviation Capital maintains a diverse, global airline clientele. Its portfolio predominantly consists of narrow-body aircraft, accounting for 83% of its assets. New technology aircraft comprise 66% of the portfolio’s net book value
Record Profit for FY2023-24
SMBC Aviation Capital reports record-breaking financial performance for FY 2023, showcasing its strategic positioning in the aircraft leasing market.
The company achieved a profit before tax of $460 million, marking a 35% year-on-year increase before exceptional items. Including insurance settlement proceeds of $756 million, the profit before tax soared to $1.2 billion.
Lease revenue surged to $1.9 billion, representing a 41% year-on-year growth from $1.3 billion. The company’s adjusted operating cash flow reached $2 billion, a 33% increase compared to the previous year.
SMBC Aviation Capital secured $5 billion in long-term leases over the past 12 months. This figure comprises $3.5 billion from their direct order book and $1.5 billion from sale-and-leaseback arrangements. The company delivered $2.1 billion worth of aircraft to 18 different customers.
The fiscal year saw SMBC Aviation Capital achieve a record in sales, trading 42 aircraft representing assets worth $1.7 billion. The company expanded its order book with additional Airbus A320NEO family and Boeing 737MAX family aircraft, bringing the total narrow-body aircraft on order to 271.
New technology aircraft now constitute 67% of SMBC Aviation Capital’s portfolio, reflecting the company’s focus on modern, fuel-efficient assets. This strategic asset selection has positioned the company favorably in the current supply-constrained market, where demand for their aircraft types remains high among airlines and investors.
CEO Remarks
CEO Peter Barrett attributed the strong results to the company’s disciplined approach to capital allocation and asset acquisition. He emphasized how this strategy has allowed SMBC Aviation Capital to capitalize on opportunities presented by the current robust market conditions.
Barrett highlighted the company’s strong balance sheet, consistent shareholder support, and long-term strategy as key factors positioning SMBC Aviation Capital for continued growth and stable returns.
The quality of the company’s portfolio and order book further reinforces its competitive advantage in the aircraft leasing sector.
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