Airplane leasing companies said to resume orders at air show

Airbus SAS and Boeing Co are poised to secure major orders this week from leasing companies that are getting back into the market after the economic crisis, said four people familiar with the planned announcements.

General Electric Co’s GECAS jet-rental subsidiary, Royal Bank of Scotland Group’s leasing unit and Steven Udvar-Hazy’s Air Lease Corp will probably be among the biggest buyers, said the people, who declined to be identified because the deals have not yet been announced. Udvar-Hazy, who has raised $3.3 billion in equity and debt, may buy about 50 Boeing and 50 Airbus jets at the show, one of the people said.

The orders at the Farnborough Air Show starting tomorrow will help make up for the dearth at last year’s Paris Air Show, when the two manufacturers focussed on holding onto contracts rather than expanding their base. Leasing companies, sidelined during the recession from their usual role of bolstering planemakers’ backlogs, have money to spend again as the economy recovers and ownership issues have been resolved.

Boeing spokesman Mike Tull and Airbus spokesman Rainer Ohler declined to comment. Airbus is the world’s largest maker of commercial jets, followed by Boeing.

Hazy returns
Air Lease, the company Udvar-Hazy founded this year, said last week it plans to have more than 100 jets by early next year. RBS Aviation Capital was no longer considered a unit central to its parent’s business in 2009, and the bank explored options including a potential sale, a plan RBS has since dropped. GECAS rents out the world’s largest fleet of airliners.

Airbus Chief Operating Officer John Leahy said yesterday the Toulouse, France-based company can double the 131 orders it won in the first half of this year during this week’s show. Boeing Marketing Chief Randy Tinseth also said last week that his company will get more orders than last year in Paris.

The Chicago-based company won commitments for nine aircraft at last year’s Paris show, compared with Airbus’s 69. The Paris show alternates with Farnborough each year. Boeing is also set to win an order from Emirates Airline at the show, two other people familiar with the planned announcement said.

Udvar-Hazy founded International Lease Finance Corp (ILFC) in 1973, selling it to insurer American International Group in 1990. He built it into the world’s largest plane lessor and the biggest customer for Boeing and Airbus before resigning in February.

ILFC had struggled to get funding for purchases because of downgrades to AIG amid a $182.3 billion government bailout that spurred the insurer to consider selling it or parceling out chunks of the portfolio for cash.