Avolon signs $18 billion agreement to purchase 140 Boeing and Airbus aircrafts

Global leasing behemoth Avolon said on Tuesday that it has reached an agreement to purchase 40 737 MAX aircraft from Boeing and 100 A321neo aircraft from Airbus. The contract, according to its owner, is valued at a total of $18 billion at list prices.

According to documents submitted to the Shenzhen Stock Exchange, the Chinese owner of the Irish-based lessor, Bohai Leasing, stated that the Airbus transaction was worth around $12.95 billion, based on the planemaker's 2018 list prices, while the Boeing transaction was valued at approximately $4.9 billion, based on its list pricing.

Plane manufacturers usually give significant discounts to major airlines and lessors. The buyer, Bohai, who owns 70% of Avolon, stated that the price was "somewhat discounted" compared to the original price.

By the time the new aircraft are delivered in 2032, Avolon will have 1,037 aircraft in its owned, managed, and committed fleet, making it the second biggest airplane leasing company in the world, surpassing competitor SMBC Aviation Capital.

As manufacturers struggle to improve output, lessors have profited from a revival in travel demand following COVID-19 lockdowns and high rises in lease prices due to a shortage of aircraft.

Additionally, Avolon bought 40 737 MAX aircraft from Boeing in June and 20 Airbus A330neos aircraft in September. Over 50% of the airplanes in the world are owned by leasing firms.

(Sources: investing.com, reuters.com)