GPA Announces Largest Ever Lease Order

The. April 18 mega order to end all mega orders includes a potential total of 20 Airbus lndustrie A320s plus 24 A330/340s for a total of 54 units valued at $US4. 3bn. Boeing saw contracts written against 182 aircraft comprising 92 737s, 50 757s and 40 767s for a cumulative value of $US9. 4bn. Not left out was McDonnell Douglas with sales of 54 MD-80s and 8 MD-11s valued at $US3. 1bn. All the major engine manufacturers also scored well with continued boosts for Rolls Royce and once struggling International Aero Engines of which both RR and Pratt & Whitney are major partners.

Taking these and previously announced orders into account, Boeing, with $13bn, has captured the largest share of GPA’s portfolio. Airbus, the European consortium, has secured $7. 8bn, McDonnell Douglas $5. 1 bn and Fokker $2. 6bn. Turboprop manufacturers, principally ATR (a partnership of Aeritalia of Italy and Aerospatiale of France) and Boeing of Canada, will also supply GPA with $1. 5bn worth of commuter aircraft (refer Sales, p. 8 May 89 AA).

Guinness Peat Aviation is a group of Irish companies providing aircraft leasing and related financial services to airlines and investors. The parent, GPA Group Limited, is a privately held Irish company owned principally by its management and employees, major financial institutions, trading companies and airlines in Europe, Japan and North America.

GPA’s new aircraft programme began in 1986 and so far the Group has handed over 107 units to its airline customers. A further 127 aircraft have been contracted by airlines for future delivery and GPA is currently delivering more than one new aircraft every week on average.

Dr T A Ryan, Chairman and Chief Executive of GPA Group, said the orders essentially completed GPA’s current round of investment in new aircraft. ”These orders are the culmination of five years of intensive research and analysis together with over a year of detailed negotiation with seven airframe and five engine manufacturers,” Dr Ryan said. ”This significant commitment means that we expect to purchase about 10% of all of the commercial jet aircraft delivered through the mid 1990s. We will thus maintain our leadership and dominant market share of the new aircraft operating lease business which continues to grow rapidly. ”

Dr Ryan said that to meet the anticipated doubling of air traffic by 2000 and to replace equipment which would be retired, about 7,000 new jets and 3,500 new turboprops would be introduced to service. These aircraft would cost over $US425bn. “At least one in every five new jets will enter service on operating lease,” Dr Ryan said.

Making the announcement in London, Mr M A Foley, President of GPA Group, said British manufacturers’ share of GPA’s overall new aircraft programme would exceed $3bn. “Today’s orders alone are worth more than $500m to Rolls-Royce in respect of the sale of RB-211-535E4. engines to power 50 757s and $860m to British Aerospace in respect of its participation in Airbus lndustrie,” Mr Foley said. “To this should be added a further $1. 7bn shared between British Aerospace, Rolls-Royce and Short Brothers in respect of our previously announced. A320 and Fokker 100 programmes. ”

Mr Foley said that for the travelling public, the operating lease brought lower prices and enhanced competition by reducing the cost of entry and assisting an efficient redistribution of capacity in the secondary market. “For investors,” he added, “the sophisticated lessors provide tailored asset and lease packages and continuous management, including remarketing assistance and lessee surveillance. ”