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UPDATE 1-AerCap still sees good demand for most popular wide-body jets
May 9, 2017 / 7:14 PM / 3 months ago

UPDATE 1-AerCap still sees good demand for most popular wide-body jets

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PARIS, May 9 (Reuters) - The world's largest independent aircraft leasing company, AerCap said on Tuesday there was "good solid demand" for the wide-body jets, after concerns surfaced in the U.S. about weak demand for the most widely traded types of jets.

American Airlines and Delta Air Lines have announced plans to defer deliveries of long-haul passenger planes, amid reports of a looming glut of capacity of such aircraft as planemakers bring out various new models while still upgrading old ones.

AerCap Chief Executive Aengus Kelly said, after the company reported higher quarterly earnings, that such discussions were typical across the world.

He added that planemakers were prepared to absorb market disruption by building a spare buffer into their order books to offset their exposure to high fixed costs.

"The only way they can do it is to over-commit all the time and that is why the order books of these guys have to be padded with inevitable deferral requests," he said.

"And so what is happening with the U.S. airlines is nothing unusual. It has just got more publicity, but discussions like this are ongoing all over the world continually."

He also told reporters AerCap was studying a proposed larger new version of Boeing's single-aisle jet family, the 737-10, which industry sources expect to be launched in June.

"We are looking at the aircraft and we'll continue to evaluate it," he said.

AerCap meanwhile has an unspecified number of mainly single-aisle Airbus aircraft at Italy's Alitalia, which has gone into administration. It said these represent below one percent of its own portfolio.

"We are observing what is happening down there and speaking with the airline," Kelly said.

Asked whether AerCap would lose money in placing them elsewhere, he said: "We would have to make sure that if there were any difference in the lease rental that we got from Alitalia and what we could get from the new lessee, we would do our best to be adequately compensated from the estate of Alitalia." (Reporting by Tim Hepher; Editing by Sudip Kar-Gupta and Alexander Smith)

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