SEATTLE - Aviation Capital Group LLC (ACG) has finalized a purchase agreement with Boeing (NYSE:BA) for 35 additional 737 MAX jets, consisting of 16 737-8 and 19 737-10 models, in response to the growing industry need for fuel-efficient, single-aisle aircraft. This latest procurement brings ACG's total 737 MAX orders to 82, as the company aims to enhance its portfolio with modern and sustainable aircraft technology.
The 737-8 variant can accommodate up to 210 passengers and offers a range of 3,500 nautical miles, while the 737-10, being the largest model in the 737 MAX series, seats up to 230 passengers with a range of 3,100 nautical miles.
Both models boast a 20% reduction in fuel use and carbon emissions compared to the planes they are meant to replace, aligning with the industry's push towards more environmentally friendly air travel.
ACG's CEO and President, Thomas Baker, expressed the company’s strategy to invest in aircraft that meet the evolving demands of their airline customers, emphasizing the 737 MAX's versatility and efficiency. The repeated order from ACG underscores the market's confidence in the 737 MAX family, as airlines seek to modernize their fleets with more flexible and fuel-efficient aircraft.
Boeing's senior vice president of Commercial Sales and Marketing, Brad McMullen, acknowledged ACG's continued partnership and shared anticipation for delivering the advanced airplane technology to ACG's global clientele. He highlighted the 737 MAX's environmental benefits, noting that each jet annually saves up to eight million pounds of CO2 emissions and produces half the noise footprint of its predecessors.
ACG, a full-service aircraft asset manager with over 480 owned, managed, and committed aircraft as of March 31, 2024, caters to approximately 90 airlines across 45 countries. The company, a subsidiary of Tokyo Century Corporation, has been operating since 1989, specializing in aircraft leasing, asset management, and financing solutions.
Boeing, a leading aerospace company, continues to develop and service a wide range of commercial airplanes, defense products, and space systems, serving customers in more than 150 countries while prioritizing safety, quality, and integrity.
This expansion of ACG's fleet is based on a press release statement from both Aviation Capital Group LLC and Boeing.
InvestingPro Insights
As Aviation Capital Group LLC (ACG) expands its fleet with additional Boeing 737 MAX aircraft, the company's financial health and strategic positioning in the market are of interest to investors. According to recent data from InvestingPro, ACG has a market capitalization of $4.69 billion, reflecting its substantial presence in the aircraft leasing sector. Its price-to-earnings (P/E) ratio stands at a competitive 10.3, suggesting that the company's earnings are robust relative to its share price.
InvestingPro Tips indicate that ACG has maintained dividend payments for an impressive 22 consecutive years, which is a testament to its financial stability and commitment to shareholder returns. Moreover, the company has been profitable over the last twelve months, reinforcing its strong performance in the financial services industry. With a dividend yield of 3.7%, ACG appears to be an attractive option for income-focused investors.
Still, not all metrics are positive; ACG is quickly burning through cash and suffers from weak gross profit margins, which are at 18.81%. These factors suggest that while ACG is a prominent player in the Financial Services industry, there are areas where efficiency could be improved.
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