Aircraft leasing giant AerCap said on Wednesday that it has scrapped 15 orders for the grounded Boeing 737 MAX, leaving 80 orders outstanding for the Dublin-based company.
In an earnings call with company investors, AerCap boss Aengus Kelly revealed that the world’s largest aircraft leaser has seen a slump in net income over the second quarter, dipping to $246 million from $331 million year-on-year.
Prior to the cancellations, AerCap had already deferred dozens of MAX deliveries. Yet as regulators close in on a certification for the aircraft, AerCap said that it had reached a formal agreement with Boeing to restructure its order book.
Kelly took the opportunity to outline production cuts he expected to see from the major manufacturers, to reset supply in line with lowered demand.
“I think we’ll see more production cuts both from Boeing and Airbus, to help us get to that equilibrium,” Kelly told listeners on Wednesday.
“I would be hopeful that tomorrow when Airbus release their results we’ll see another production cut there,” added the AerCap CEO, referring to the French company’s results announcement on Thursday.
Kelly pointed to record liquidity (including $3 billion in fresh funding) as evidence AerCap was well-placed to mitigate the fallout from the coronavirus pandemic.
In a positive sign, he also said that the company had begun leasing airplanes again – adding, “It’s almost exclusively focused on the European market.
“No doubt there will be setbacks, but the willingness and the desire of the consumer to travel is very clear.”
However, he added that earlier signs of a rebound in the US sector had since “run out of steam” amid new virus outbreaks and lockdowns.