China Aircraft Leasing May Order Airbus A321XLR, A220 Planes

(Bloomberg) -- China Aircraft Leasing Group Holdings Ltd. is considering ordering long-range jets from Airbus SE’s A320neo family of aircraft, reflecting a trend of airlines looking to fly further in smaller planes.

The Hong Kong-based lessor expects to make a decision on whether to order the A321XLR next year, Chief Executive Officer Mike Poon said in an interview at the Singapore Airshow. The company is also assessing the A220, he said.

“We are seriously looking at this,” Poon said Wednesday. “The range is attractive. We just now want to, in our simulation model, see how many operators it will gain. The conclusion can be made in 2021.”

China Aircraft Leasing normally buys from 30 to 100 aircraft, Poon said, though he didn’t specify how many A321XLRs or A220s might be ordered.

The A321XLR, launched last year, is the long-range version of the A320 narrowbody and has garnered more than 450 orders and commitments from carriers including United Airlines Holdings Inc., American Airlines Group Inc. and Qantas Airways Ltd. Airbus’s Senior Vice President of Marketing Francois Caudron said Tuesday that the company expects to sell 1,000 A321XLRs in 10 years.

The popularity of the model is helping Airbus eat away at Boeing Co.’s market as the U.S. manufacturer struggles with the global grounding of the 737 Max following two deadly crashes. Once that it resolved, Boeing may return to its new midmarket airplane project, senior sales executive Ihssane Mounir said at the air show.

Poon said his company, which relies on China for the majority of its revenue, last year converted orders for eight 737 Max planes to two 787s. China Aircraft Leasing has 92 of the 737 Max jets on order and expects the first delivery to be made next year, two years behind the original schedule.

The Civil Aviation Administration of China and other regulators like the European Union Aviation Safety Agency are likely to follow the U.S. Federal Aviation Administration when it allows the 737 Max to resume flying, though they could be some months behind, Poon said. Airlines may look to convert some older narrowbody planes into cargo aircraft or scrap them when the 737 Max is back in service, he said. Boeing’s latest view is that it expects the aircraft to return to the skies from the middle of this year.

“The return of the Max would be in the maximum interest to the industry as whole,” Poon said. “The market needs more than one narrow-body product.”

To contact the reporters on this story: Kyunghee Park in Singapore at kpark3@bloomberg.net;Anurag Kotoky in New Delhi at akotoky@bloomberg.net

To contact the editors responsible for this story: Young-Sam Cho at ycho2@bloomberg.net, Will Davies, Ville Heiskanen

©2020 Bloomberg L.P.