SMBC Aviation to Buy $11.8 Billion of Airbus A320 Aircraft

SMBC Aviation to Buy $11.8 Billion of Airbus A320 Aircraft
Yoshinori Kawamura, president of Sumitomo Mitsui Finance and Leasing Company Ltd., left, John Leahy, chief operating officer of Airbus Group NV, center, and Peter Barrett, chief executive officer of SMBC Aviation Capital Ltd., pose for a photograph with a model Airbus aircraft, a during a news conference on the second day of the Farnborough International Airshow in Farnborough. Photographer: Simon Dawson/Bloomberg

July 15 (Bloomberg) -- SMBC Aviation Capital Ltd., the Japanese plane lessor, said it will buy $11.8 billion of aircraft from Airbus Group NV in the largest single-aisle aircraft order ever placed by a leasing company amid a surge in Asian travel demand.

The order is for 110 A320neos and five A320ceos, Sumitomo Corp., one of the shareholders of the world’s third-largest aircraft leasing company, said in a statement today. The planes are due for delivery between 2016 and 2022. The $11.8 billion order is based on list prices. Buyers usually get a discount.

The purchase may help SMBC Aviation grab a bigger share of the growing travel market in Asia. Boeing Co. predicts the region will drive an increase in commercial aircraft sales to $5.2 trillion over the next 20 years, as China overtakes the U.S. as the world’s largest aviation market.

The lessor may consider buying A330neo planes at a later point, SMBC Aviation Chief Executive Officer Peter Barrett told reporters in Farnborough, England today. Sumitomo Mitsui Banking Corp., Sumitomo Mitsui Finance & Leasing Co. -- both susbidiaries of Sumitomo Mitsui Financial Group Inc. -- and Sumitomo Corp. are the owners of SMBC Aviation.

SMBC Aviation has 393 planes in its fleet, according to its website. The aircraft range from twin-aisle Boeing 747s and Airbus A340 to regional jets from Embraer SA.

To contact the reporter on this story: Chris Cooper in Tokyo at ccooper1@bloomberg.net

To contact the editors responsible for this story: Anand Krishnamoorthy at anandk@bloomberg.net Dave McCombs