SMBC Places Massive Order for 60 Airbus A320neo Planes

The second-largest aircraft leasing company in the world, SMBC Aviation Capital, said on Tuesday that it has placed an order for 60 Airbus A320neo family aircraft, without providing any financial information about the transaction.

The sale was based on the market pricing of the A320neo, its estimated value was $3.4 billion.

Days after Boeing, Airbus' principal competitor, dominated the Dubai Airshow, the news was made. Amidst increasing demand for wide-body aircraft, Boeing secured fresh orders totaling 196 aircraft, while Airbus reached agreements for 55 jets.

Owned by a group that includes Sumitomo Corp. and Sumitomo Mitsui Financial Group of Japan, SMBC said the additional aircraft increased its total order book for A320neo and A321neo aircraft to 184 and guaranteed delivery until 2031.

The Irish-based lessor also announced a 75 percent rise in first-half earnings to $236 million. The company now owns, operates, or has orders for almost 1,000 aircraft.

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SBMC's $710 Million Insurance Settlement and Its Impact on Aircraft Leasing in Russia

SBMC was paid $710 million in an insurance settlement last month for the jets it had previously leased to the state-owned airline Aeroflot of Russia.

According to the lessor, the settlement sum corresponds to its claims against Aeroflot's insurance for sixteen aircraft and their engines. For one aircraft and the related engines that are under the management of SMBC Aviation, an extra insurance payment has been reached.

Russia was a significant market for aircraft lessors, who purchased aircraft from Boeing and Airbus and leased them to airlines in the nation, prior to the invasion of Ukraine last year.

Due to Moscow's refusal to release the aircraft after lessors terminated lease agreements in order to comply with Western sanctions, these aircraft were left stranded in Russia.

Russia's reluctance to return 17 aircraft that were leased to Aeroflot prompted the world's largest aircraft lessor, Aercap, to announce last month that it had reached an insurance settlement.

According to SMBC Aviation, it would keep working to lessen the losses on planes that it had previously leased to other Russian carriers. Prior to its termination in March 2022, the lessor had further leased aircraft to S7 Airlines, Ural Airlines, Nordwind Airlines, and Nordstar Airlines.

Through its leasing and banking divisions, Sumitomo Mitsui Financial Group, which owns SMBC Aviation, said on Tuesday that it will include $311 million in equity gains of associated firms in its consolidated results for the third quarter of the current fiscal year, which ends in March 2024.

The insurance payout will provide an after-tax profit of 30 billion yen ($200 million) for Sumitomo Corp, a Japanese trading firm that has a minority share in SMBC Aviation through a subsidiary. This benefit is expected to be booked in the third quarter.