Boeing won an order for 82 jets from BOC Aviation valued at $8.8 billion in list prices as Asian aircraft-leasing companies boost their fleet amid a surge in travel demand across the continent.
BOC Aviation ordered 50 737 Max 8 and 30 Next Generation 737-800 aircraft from Boeing, the lessor, a unit of Bank of China Ltd., said in an e-mailed statement Monday. The Singapore- based company also agreed to buy two 777 wide-body aircraft. The single-aisle planes are for delivery between 2016 and 2021, BOC said in the statement.
BOC Aviation and SMBC Aviation Capital, the world’s third-largest aircraft leasing company, are among Asian lessors buying new planes as economic growth across India, China and Southeast Asia enables more people to fly. Chicago-based Boeing has predicted the region will drive an increase in commercial aircraft sales to $5.2 trillion over the next 20 years as China overtakes the U.S. as the world’s biggest aviation market.
“We want to be in the younger end of the market,” Robert Martin, BOC Aviation’s managing director, said in a telephone interview Monday in Singapore. “We want the most fuel efficient planes.”
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Last month, BOC Aviation ordered 43 Airbus Group aircraft and the lessor is expected to have a record number of planes on its fleet this year. Japanese lessor SMBC Aviation said it will buy $11.8 billion of jets from Airbus. China Aircraft Leasing Group Holdings has also said it plans to expand across the continent after becoming the first plane lessor in the region to sell shares to the public last month.
BOC Aviation plans to have a fleet of 400 airplanes by 2021 as it expects to take deliveries of an average 27 planes a year from 2015, Martin said. It also plans to sell about 20 to 30 planes annually, he said.
The order for the 737s, the biggest single order for BOC Aviation, will help it meet growing demand for the latest aircraft including the Max, Martin said.
“If you look forward in the next seven years, we’re in a transition for the 737 aircraft,” Martin said. “You have somewhere in the mid 20s of operators already committed to the program, but we can see potential for that to go up to easily 100 operators. So we want to make sure we’re part of growing that program.”
The lessor expects to pick up more planes from Airbus and Boeing which the original buyers may not be able to take, Martin said. It took on eight aircraft that were intended for other customers and was included in the 43 planes it ordered from Airbus last month, he said.
“I think we’re going to see more of that,” Martin said. “It’s not finished yet. I could do another $1 billion of capacity in 2015 if need be.”
Air travel demand in Asia is projected to expand 5.7 percent in the four years through 2017, the second-fastest pace in the world, with routes within or connected to China being the single largest driver, according to an International Air Transport Association’s study last year.
Airlines globally will buy aircraft worth $4.4 trillion in the next two decades as more Indians and Chinese fly, Airbus said last year.