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AerCap interested in larger 737, not in CSeries - CEO

Published 07/05/2016, 00:54
Updated 07/05/2016, 01:00
© Reuters. Aengus Kelly, CEO of AerCap, speaks during a panel discussion at the 2015 International Air Transport Association (IATA) Annual General Meeting (AGM) and World Air Transport Summit in Miami Beach
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By Alwyn Scott

SEATTLE (Reuters) - Major aircraft leasing company AerCap Holdings (N:AER) would be interested in a larger version of Boeing's 737 MAX 9 if the weight, size and range were right, the company's chief executive said on Friday.

"We may possibly (be interested) but only if it makes money for the shareholders of AerCap," Chief Executive Aengus Kelly said in an interview, confirming that his company had discussed the plane with Boeing (N:BA).

"We think the MAX 9 could definitely do with some enhancements," he said. "I think Boeing have recognised that and I think they will address it."

Numerous design factors are in play, including a longer fuselage, weight, range, seating and engines, he said.

The 737 MAX 9 which seats 178 passengers in a two-class configuration, has been outsold by rival Airbus' A321neo, which will seat 206 passengers in two classes. Both planes are due to enter production in the next few years.

Boeing also is considering enlarging its smallest 737, the MAX 7, providing more seating and airlines have expressed interest in that plane as well.

Delta Air Lines (N:DAL), the second largest U.S. airline by traffic, said last week it was interested in larger and longer-range MAX aircraft and noted on Friday that it was specifically interested in those changes in a MAX 9.

Kelly said he would prefer the larger version of the MAX 9 to be done first, but Boeing seems poised to move first on the smaller plane, dubbed the 737 MAX 7X.

"I think that will be a more niche airplane," Kelly said of the 7X. "The more important one for the market is the larger one."

"The heart of the market is still the (mid-sized) 737 MAX 8 and the (Airbus) A320," he said, noting that the MAX 8 is an "excellent aircraft" that has sold well. But, he added, "a bigger portion of the market is going to the bigger airplane, which would be in the A321 and MAX 9 category."

Kelly said AerCap was not interested in Bombardier Inc's (TO:BBDb) smaller CSeries aircraft. "For us the answer is 'no,'" he said.

"We think it's a good airplane technically. The problem for us as a lessor is we need a wide customer base. That airplane just doesn't have a customer base that we think will retain its residual value."

© Reuters. Aengus Kelly, CEO of AerCap, speaks during a panel discussion at the 2015 International Air Transport Association (IATA) Annual General Meeting (AGM) and World Air Transport Summit in Miami Beach

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