Aircraft lessor in compensation talks with Boeing over Max 8

Gecas has order for more than 170 planes of type grounded following fatal crashes

Gecas announced a deal with Boeing exercising 10 purchase rights to firm orders and adding 15 more purchase rights for the Boeing 737-800 converted freighter. The planes will be leased to Amazon. Photograph: Pascal Rossignol/Reuters

Gecas announced a deal with Boeing exercising 10 purchase rights to firm orders and adding 15 more purchase rights for the Boeing 737-800 converted freighter. The planes will be leased to Amazon. Photograph: Pascal Rossignol/Reuters

 

An aircraft lessor operating out of Shannon Airport is having conversations with manufacturer Boeing around the issue of compensation resulting from the global grounding of the Boeing 737 Max family of aircraft.

General Electric Capital Aviation Services (Gecas), which operates out of Shannon but has its headquarters in the United States, said it, along with others, had “begun discussions with Boeing” when asked who would foot the bill for the grounded aircraft.

Speaking to The Irish Times from the Paris Air Show, Gecas chief commercial officer Declan Kelly noted that the lessor still had confidence in the Boeing 737 Max 8, for which it has an order book in excess of 170 aircraft.

Grounding

Asked whether consumers will have confidence in the plane, Mr Kelly instanced the case of the 2013 grounding of the Boeing 787 Dreamliner fleet, noting that while there was an initial consumer confidence issue, that passed “within months”.

At the air show in Paris, Gecas announced a series of deals including one with Boeing exercising 10 purchase rights to firm orders and adding 15 more purchase rights for the Boeing 737-800 converted freighter. The planes will be leased to Amazon.

It also agreed to lease four Airbus A320 planes to Guizhou Airlines and nine A220-300 planes to Moxy.

The company was also reported to be in talks with Airbus about potential deals for the A321XLR – a longer range version of its popular A321. Mr Kelly declined to specifically comment on that suggestion.

Gecas employs 250 staff in Shannon from where it controls $23 billion (€20 billion) of assets. In line with a growing climate change agenda, the aircraft lessor said it was looking to reduce the average age of its fleet from 7½ years to five years.

Proposals

Elsewhere at the Paris Air Show, Airbus vowed to put up a fight to reverse a $24 billion (€21.2 billion) deal landed by Boeing for 737 Max planes that proved to be the sales coup of this year’s show.

Speaking at a final press conference from Le Bourget airfield outside the French capital on Thursday, Airbus sales chief Christian Scherer said the European planemaker never received a request for proposals – a document that formally launches bidding for most major aircraft contracts – from Aer Lingus and British Airways owner IAG.

The secret negotiations between Boeing and IAG led to the biggest surprise of the week-long show: a letter of intent from the carrier to purchase 200 of the Max aircraft. IAG is currently an Airbus-only narrow-body customer and has said it plans to use the planes for its discount and leisure divisions, including Vueling and Level.

– Additional reporting: Bloomberg