SMBC Aviation Capital eyes deal with Asian airline

Irish aircraft lessor has placed all planes ordered from Airbus and Boeing to end of 2019

Irish aircraft lessor SMBC Aviation Capital hopes to agree a deal with a leading Asian airline shortly, according to its chief executive, Peter Barrett.

The Dublin-based firm recently completed a number of sale and leaseback deals with airlines, including Aeromexico, where it bought aircraft from the carrier involved and then leased them back to it.

Mr Barrett said that SMBC hoped to complete a similar transaction with another player, this time an Asian carrier, in coming weeks, although he did not indicate which one.

Sale and leaseback deals are common in aircraft finance. They allow airlines to free up cash so that they can continue to spend on growing their fleets.


Mr Barrett was speaking as this week’s Annual Global Airfinance Conference kicked off in the National Convention Centre, Dublin.

The conference, organised by Airfinance Journal, is a gathering of key figures from airlines and aircraft lessors and and finance, held every year in the capital. Aviation finance contributes €541 million a-year to the economy.

Mr Barrett said that SMBC has placed the aircraft that it has on order from manufacturers Airbus and Boeing through this year and next year with airlines and was working on craft that it will receive in 2020.

SMBC has large orders with both manufacturers that will see it taking delivery of craft up to 2022. Its chief executive noted that the leasing business was continuing to grow on the back of an expanding global economy.

"The global growth story is positive, Europe is doing well and the US continues to have a good growth profile," he said.

Much of the demand for aircraft is coming from Latin America and Asia,where populations and economies are expanding.

In Europe, Mr Barrett pointed out that airlines are renewing their fleets, which is helping to drive demand there.

He did not expect Brexit to have a huge impact beyond UK carriers. He suggested that the failure of British airline, Monarch, late last year resulted partly from sterling’s weakness, which in turn resulted from the country’s vote to leave the EU.

Mr Barrett acknowledged that the seeds should be sown for a number of deals at this week’s conference in Dublin.

“On Friday we will sit down and talk about the opportunities, the list of real deals and potential deals will be a lot longer than it is now,” he said.

Barry O'Halloran

Barry O'Halloran

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