By Padraic Halpin and Tim Hepher
DUBLIN (Reuters) -Boeing and Airbus have made progress in boosting aircraft manufacturing, but there is “a way to go” to get a stable, predictable production cycle, the head of aircraft leasing giant SMBC Aviation Capital said on Thursday.
The world’s third-largest aircraft lessor, which has over 250 planes on order with both manufacturers, also said tariffs could be a drag on that recovery and have the potential to delay production increases.
Boeing has faced a series of crises but expects to stabilise 737 MAX production over the coming weeks, while Airbus has reaffirmed its target for increased commercial deliveries this year despite a recent dip.
“I was actually there (at Boeing) a few weeks ago. I certainly felt that the corner was turned and I don’t say that lightly. There’s more to go but I do think they are absolutely travelling in the right direction,” Peter Barrett told Reuters, adding that Airbus has also made progress.
As U.S. President Donald Trump’s tariff war and “America First” policies disrupt international relations, Barrett said there was “some caution” on transatlantic routes, but that SMBC’s customers have said domestic U.S. demand was resilient.
SMBC on Thursday said it had booked a further $654 million from insurance settlements over the last year related to jets stranded in Russia following Western sanctions, bringing its total recoveries from claims to $1.41 billion.
SMBC recorded an impairment of $1.6 billion in 2022 after 34 of its jets got stuck in Russia following the sanctions over Moscow’s war in Ukraine that forced the termination of leases.
SMBC was one of six lessors that ended an Irish lawsuit against their insurers last month and Barrett said the majority of its litigation around the world was complete.
Pretax profits at SMBC, owned by a consortium including Japan’s Sumitomo Corp and Sumitomo Mitsui Financial Group, grew 22% year-on-year to $563 million in the year to end-March, excluding the settlements, it said.
(Reporting by Padraic Halpin; Editing by Jamie Freed and Barbara Lewis)
