Dublin-based SMBC flying high as profits continue to rise

The value of SMBC Aviation Capital’s aircraft stood at $10.5bn at the end of September

Aircraft lessor SMBC Aviation Capital grew pre-tax profits by 3.1 per cent to $16 million (€142.8 million) in the six months to the end of September, the first half of its financial year.

Dublin-based SMBC buys Boeing and Airbus aircraft and leases them to airlines in Europe, Asia and the Americas. During its first half , it delivered seven new craft to airlines, six of which were new technology Airbus A320s and one wide-body A350, which it leased to Korean carrier, Asiana.

Chief executive Peter Barrett noted that the leasing market was continuing to grow and that there were sufficient opportunities for all its main players.

He acknowledged that there had been a shake up in Europe, where British airline Monarch, Italian flag carrier Alitalia and Germany's Air Berlin all became insolvent this year.


SMBC had just one aircraft with Monarch, for which the company has found a new client. Mr Barrett said demand for air travel in Europe had not changed, but argued that competition was sorting the wheat from the chaff.

“Europe is an increasingly competitive and efficient market,” he said. “Those airlines that do not have the right business model, they are being exposed over time.”

Demand for air travel continues to grow in Asia, particularly countries such as China, India and Indonesia, as a greater share of their populations join the ranks of middle income earners.

SMBC recently announced that its shareholders, Japan's Sumitomo Corporation and Sumitomo Mitsui Financial Group, have pledged to provide it with $1 billion in capital by March 2019.

Mr Barrett said that the cash was an indication of the shareholders’ confidence and would leave SMBC well positioned to grow the business.

“It’s better to do these things when you can do them as opposed to when you need to do them,” he added.

The value of SMBC’s craft stood at $10.5 billion at the end of September. This included 278 that it owned and 174 that it managed.

The company sold 13 craft during the period and either agreed or signed letters of intent to sell a further 38, including 20 to another lessor, Aircastle. In July it raised $500 million through a bond issue.

SMBC's clients also include Scandinavian airline, SAS, which has been renewing its fleet, Avianca in Colombia and Air Europa, the Spanish airline whose long-haul flights Ryanair recently began selling on its website.

Barry O'Halloran

Barry O'Halloran

Barry O’Halloran covers energy, construction, insolvency, and gaming and betting, among other areas