Lessor SMBC defers 68 Max jets, no cancellation plans at this point
By Conor Humphries
DUBLIN (Reuters) - Aircraft leasing firm SMBC Aviation Capital on Wednesday said it had deferred delivery of 68 of Boeing's grounded 737 MAX jet by four years until 2025-2027, but said it did not plan to cancel any orders "at this point."
SMBC, which has firm orders for 89 MAX jets and is committed to a fleet of 133, said it had secured satisfactory terms to defer the jets that were due for delivery in 2021-22 but had not entered production.
"The terms are satisfactory to us and ... allows us to plan better over the next number of years," SMBC Aviation Capital Chief Executive Peter Barrett said in an interview.
Barrett said SMBC did not anticipate any cancellations "at this point."
Boeing's best-selling plane was grounded in March 2019 after two fatal crashes.
While the jetmaker resumed production last week, its output plans are significantly behind schedule and it has been hit by a wave of cancellations and deferrals due to COVID-19.
Aircraft leasing firms, which control over 40% of the global fleet, are among the largest MAX customers.
Aercap, the world's largest lessor, last month deferred dozens of MAX deliveries and said it could cancel some orders. Avolon in April announced the cancellation of 75 MAX jets that were due for delivery by 2023.
SMBC, which on Wednesday announced a record profit before tax of $364.5 million for the year to March 31, said it was entering the crisis with a strong capital and liquidity position.
The company, which is owned by a consortium including Japan's Sumitomo Corp and Sumitomo Mitsui Financial Group, said it has $10.6 billion in support from shareholders.
That includes $2.9 billion of equity and $7.7 billion debt financing of which $3.2 billion was undrawn as at March 31, it said. It had $6.3 billion of available liquidity at the end of March.
Although most of SMBC's airline customers had requested some form of payment deferrals, Barrett said it was beginning to see green shoots in Asia, including increased aircraft utilisation rates.
SMBC has capital to acquire additional planes should "good value" opportunities arise, he said.
(Reporting by Conor Humphries; editing by Louise Heavens/Jason Neely/Jane Merriman)