Meeting in Dublin, the plane lessors are worried about the risks of sales and leasing of the Boeing 737 MAX at rock-bottom prices.
While Boeing seeks to raise an additional $10 billion from the financial markets to replenish a treasury which has been jeopardized by the grounding and suspending of production of the 737 MAX, the major aircraft leasing companies are worried about the consequences of a major drop of sale and leasing prices on the residual value of the Boeing 737 MAX. “Discipline and self-control are absolutely vital. Because if people start panicking and lease or sell the Boeing 737 MAX at rock-bottom prices over a long period of time then it will become more difficult to restore residual value to this asset”, says Aengus Kelly, CEO of the leasing company AerCap, at the Airline Economics Aviation Finance conference taking place in Dublin. AerCap has got 100 Boeing 737 MAX aircraft in its portfolio.
Steven Udvar-Hazy, Executive chairman of Air Lease Corp. — whose portfolio includes 150 Boeing 737 MAXs — is less worried about this price drop, believing that it will only be temporary because the competitor Airbus is not in a position to increase its production enough to overshadow the 737 MAX on the markets during its absence and that the return of the 737 MAX will be done gradually at the rate of 50 to 60 units per month, aircraft grounded and new units leaving the chain included. On the other hand, Steven Udvar-Hazy calls on Boeing to abandon the “MAX” brand in order to “prevent this from damaging the value of the aircraft”. “The MAX brand is now damaged and there is no reason to keep it”, he adds.