Orix Aviation is discussing 10- to 12-year lease agreements, David Power, the unit's chief executive officer, said here Thursday. He declined to name specific companies or how many planes he is aiming to buy.
"The 787 we think is a super aircraft. It's very appealing in terms of its fuel efficiency," Power said. "We've already negotiated with some airlines."
The Dublin-based unit plans to boost aircraft under lease and management and its customer base by about 50 percent, Power said. Orix is targeting demand for global air travel that Boeing, the world's second-biggest planemaker, predicts will spur annual passenger traffic growth of about 5 percent over the next two decades.
Boeing's 787, the first passenger jet built chiefly of lightweight carbon-fiber composites, lists for as much as $227.8 million each, according to the Chicago-based company's website. Earlier this year, Boeing boosted its production rate for the jets to 3.5 a month. It's order backlog for the Dreamliner stood at 845 as of June 30, according to the website.
Orix Aviation doesn't plan to order any Dreamliner planes directly from the manufacturer, Power, 49, said.
All Nippon Airways and Japan Airlines are currently the only two carriers flying the 787. ANA, which has ordered 55 of the planes, started service to Frankfurt and within Japan last year. JAL, with 45 orders, added flights to Boston and Beijing this year.
Megumi Tezuka, an ANA spokeswoman, and Sze Hunn Yap, spokeswoman for JAL, both said their airlines have no plans to lease the 787s. ANA has 10 of the planes, while JAL has four, the spokeswomen said.
Air India, an unprofitable state-owned carrier with 27 Dreamliners on order, said in November its board approved a plan to seek an arrangement where it could sell and lease back the 787s as part of a restructuring program. K. Swaminathan, an Air India spokesman, declined to comment on the plan.
Orix Aviation joins Sumitomo Mitsui Financial Group, Japan's second-largest bank by market value, in expanding its fleet to tap rising demand from airline customers seeking to avoid the costs of aircraft ownership amid a global economic slowdown.
Orix Aviation is seeking to increase its fleet size to as many as 250 planes over five years and to widen its customer base to 100 airlines in three years, from 65, Power said. The company owns and manages 130 planes currently, according to Atsushi Horii, a spokesman in Tokyo at the parent company.
Sumitomo Mitsui Financial's plane leasing unit is targeting air travel demand in Asia and plans to boost its fleet, the region's largest, by about 20 percent to 400 planes. It completed a $7.3 billion purchase of Royal Bank of Scotland's aviation unit last month.
Orix Aviation also plans to expand in Asia, where Boeing forecasts airlines will buy the most planes of any region over the next 20 years. Power aims to open an office in Singapore, Orix Aviation's first outside Ireland, within the next two months.
"To expand our customers and keep our growth we must open a base there," he said.
Boeing last week said Asia-Pacific airlines may take delivery of 12,030 new planes through 2031.
MORE HBJ HEADLINES
LED lightbulb savings outshine solar and wind power It's the golden age of the American muscle car Ford headlight failures prompting wrecks draw U.S. probe Volkswagen recalls 420,000 vehicles for air bag issue Former Pillsbury executives plan to relaunch RyKrisp J.C. Penney narrows loss, tops expectations
Our new comment system is not supported in IE 7. Please upgrade your browser here.