On Air Now

Current Show

Coast to Coast AM   12:00 AM - 5:00 AM

Contact Coast to Coast AM at 1-800-825-5033

Show Info »

Upcoming Shows

Program Schedule »

Listen

Listen Live Now » 550 AM Wausau, WI 99.9 FM Stevens Point, WI

Weather

Current Conditions(Wausau,WI 54403)

More Weather »
33° Feels Like: 23°
Wind: SW 14 mph Past 24 hrs - Precip: 0”
Current Radar for Zip

Tonight

Rain/Snow 34°

Tomorrow

AM Snow Showers 40°

Fri Night

Partly Cloudy 21°

Alerts

ILFC places big plane orders, scraps super jumbos

By Karen Jacobs and Kyle Peterson

ATLANTA/CHICAGO (Reuters) - International Lease Finance Corp, the world's biggest aircraft leasing company, said on Tuesday it will order 100 narrowbody planes from EADS <EAD.PA> unit Airbus and 33 narrowbodies from Boeing Co <BA.N>, and scrap an order for 10 Airbus A380 super jumbo aircraft.

The orders from the aircraft leasing unit of insurer American International Group Inc <AIG.N> are potentially worth $11.2 billion at average list prices. The canceled A380 order, which had been in jeopardy for some time, was potentially worth $3.75 billion.

The new orders mark the first for ILFC since October 2007 and are a sign of health for the lease company, which was hurt by the financial crisis that caused the near-collapse of parent AIG. ILFC signed a new $2 billion revolving credit agreement in January, a key step as it considered ordering planes.

"It's a sign that the leasing activity from one of the industry's top players is back," said Peter Arment, an aerospace analyst with Gleacher & Co.

ILFC's orders for 75 A320neo and 25 A321neo jets are a strong vote of confidence for the upcoming revamped versions of the best-selling A320 family. The planes will feature new engines that offer greater fuel efficiency.

The A320 neo, or new engine option, is "not just up and running, but it is taking the world by storm," Airbus sales chief John Leahy said after news of the ILFC order [ID:nWEA7262].

The orders may put new pressure on Boeing, the world's second-largest commercial aircraft-maker, as it decides whether to rebuild or re-engine its best-selling 737.

Nicole Piasecki is vice president of Business Development for Boeing Commercial Airplanes disputed Leahy's boast the Neo would dominate the market.

"I think the A320neo is going to be obsolete by the end of the decade," Piasecki told Reuters.

She said the company plans to be clearer about the 737's future by mid 2011.

"We are very very comfortable with the current plan we are on," she said. "We like the position we are in."

CAN'T WAIT ON BOEING

ILFC Chief Executive Henri Courpron said his company could not wait on Boeing.

"We have to run our business ... and we can't wait for what Boeing is going to do next," Courpron said in an interview.

"We have enough information on the Neo to make the call that this airplane is going to be successful, almost irrespective of what Boeing is going to do."

Still, he added that ILFC was eager to know Boeing's next move and could order more aircraft based on its decision.

Boeing has said it is leaning toward building an all-new version of its 737, but has not made a decision. A re-engined plane would be brought to market quicker than a new plane, but would offer less fuel economy.

"It does speak to the need for a re-engine, especially as the A380 was scrapped and (ILFC) went for shorter-haul jets," said Alex Hamilton, managing director of EarlyBirdCapital.

The new Airbus order from ILFC is a memorandum of understanding, meaning it is not a firm order. The Boeing deal for 33 737-800 aircraft is a full purchase agreement.

ILFC had been reevaluating the order for A380s, a model that was delayed around three years by production problems. ILFC is the largest customer for Boeing's upcoming 787 Dreamliner, which is nearly three years behind schedule.

The agreement with Airbus is potentially worth $9.04 billion based on average list prices and includes 75 A320neo aircraft and 25 A321neo aircraft. ILFC said it chose a geared turbofan engine made by United Technologies Corp's <UTX.N> Pratt & Whitney unit for 60 of the aircraft.

The Boeing order has a value of $2.67 billion based on average list prices. Earlier on Tuesday, Air China Ltd <601111.SS><0753.HK> and China's Hainan Airlines Co Ltd <600221.SS> announced plans to buy Boeing aircraft worth $10 billion at list prices.

Boeing shares closed up 1.63 percent at $72.04 on the New York Stock Exchange, while EADS shares closed up 2.8 percent in Paris at 19.84 euros.

(Reporting by Karen Jacobs and Kyle Peterson; editing by Maureen Bavdek, Gerald E. McCormick and Andre Grenon)

Comments