Dublin aircraft lessor defers delivery of Boeing 737 Max until 2025

Dublin-based aircraft lessor SMBC Aviation Capital has deferred delivery of 68 Boeing 737 Max aircraft until between 2025 and 2027, the company said as it posted profit of $364.5 million (€325 million) for the year to the end of March.

The company, owned by Japanese conglomerate Sumitomo Corporation and Sumitomo Mitsui Financial Group, said its profit before tax grew by 5.8 per cent year on year, to a record level while it posted earnings of $1.1 billion.

SMBC noted that its total aircraft operating lease assets grew by 3.7 per cent to $10.6 billion, “a lower than anticipated level of asset growth due to the grounding of the Boeing 737 Max aircraft and Airbus A320 Neo delays”.

The company’s operating margin for the 12 month period was 40.5 per cent.

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The weighted average age of SMBC’s portfolio is 4.1 years and new technology aircraft now comprise 48.3 per cent of its portfolio.

"The pandemic will have a significant and potentially prolonged impact on the aviation industry. However, this period has also demonstrated the importance of air travel to the global economy and we believe that the sector will work together to address the current challenges to support economic recovery," said SMBC chief executive Peter Barrett.

“SMBC Aviation Capital came into this crisis in a very strong financial position, with a business model built to perform through the cycle, not just the favourable market conditions seen in recent years. Being owned by a substantive and supportive Japanese financial institution together with our disciplined asset investment strategy positions us well to manage the challenges of this changing operating environment and take advantage of opportunities that will arise,” he said.

Some $3.2 billion of the company’s $7.7 billion debt financing facility from its shareholders was undrawn at the end of March while SMBC Aviation Capital had available liquidity of $6.3 billion.