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Aircastle sees weak ruble hitting Boeing, Airbus sales
December 8, 2014 / 8:43 PM / 3 years ago

Aircastle sees weak ruble hitting Boeing, Airbus sales

NEW YORK (Reuters) - Boeing Co (BA.N) and Airbus (AIR.PA) jetliner sales to Russia are likely to be squeezed by a falling Russian ruble RUB=, the chief executive of Aircastle Ltd (AYR.N) said, a drop that could allow the aircraft lessor to pick up some planes on the cheap.

Ron Wainshal said on Monday that a weakening economy has impacted travel and airlines in Russia, which could pave the way for Aircastle to increase direct purchases from the two leading jetmakers, Wainshal said in the interview.

“There is an opportunity to acquire aircraft that otherwise would have gone into Russia,” he said, with the U.S. dollar up about 63 percent against the ruble this year. “We have discussions with Airbus and Boeing all the time, (but) this might be just another reason for it.”

The move would be part of a broader strategy at Aircastle to seek out aircraft at low prices and to buy planes active today rather than place orders years in advance for Boeing and Airbus next-generation models, as other lessors have done.

Wainshal confirmed that Aircastle purchased two current-generation Airbus A330 jets on sale and leaseback from Malaysian carrier AirAsia X Bhd (AIRX.KL), which said last month it would freeze domestic capacity expansion in an increasingly competitive market.

He said the company is looking at other, similar transactions, but did not say with whom.

Wainshal added that the upgraded A330neo jetliner, with deliveries slated to begin in late 2017, “is still an unproven asset” in the eyes of airlines.

Competitor Air Lease Corp (AL.N) placed 25 provisional orders for the A330neo earlier this year, saying it has seen demand for the aircraft from around the world.

“I’d rather deploy capital today as opposed to commit it many years in the future,” Wainshal said, adding that future shocks to demand could make early aircraft buys a bad bet. “The world is an unpredictable place.”

Separately, Wainshal said Aircastle might receive an investment grade debt rating when it reaches around $8 billion in assets, up from the approximately $6 billion it will have by the end of 2014. Both Standard & Poor’s and Moody’s have assigned Aircastle’s debt with their highest speculative-grade ratings.

Reporting by Alwyn Scott and Jeffrey Dastin in New York and Tim Hepher in Paris; Editing by Chris Reese and Christian Plumb

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