Key Takeaways:
SMBC Aviation Capital placed its first-ever order for Boeing's largest 737 MAX variant as part of a 100-jet deal valued at more than $13 billion at list prices.
SMBC Aviation Capital ordered 100 Boeing 737 MAX jets, including 60 of the largest 737-10 variant, in the single biggest order for that model by a lessor, the companies said Monday at the Farnborough Airshow.
"This order reflects our confidence in the 737 MAX program and the strong demand we see from airline customers for fuel-efficient aircraft," said Peter Barrett, chief executive officer of SMBC Aviation Capital, according to the announcement.
The order comprises 60 737-10 jets — the highest-capacity member of the MAX family — and 40 737-8 aircraft. The 737-10 can seat up to 230 passengers and offers 18.9% fuel savings per seat compared with older-generation aircraft, according to Boeing. The jets will be powered by CFM International LEAP-1B engines.
The deal strengthens Boeing's backlog for the 737-10, which has yet to receive certification from the U.S. Federal Aviation Administration. The variant has accumulated 1,219 orders and commitments, Boeing data show. For SMBC Aviation Capital, the order expands its portfolio to more than 800 owned and managed aircraft.
Lessor Appetite Drives Narrowbody Demand
The order reflects the rebound in demand for narrowbody aircraft as airlines worldwide expand capacity to meet post-pandemic travel growth. Aircraft lessors now account for roughly half of all commercial jet orders, up from about 40% a decade ago, according to industry data.
SMBC Aviation Capital, headquartered in Dublin, joins other lessors including CDB Aviation and AerCap in placing large MAX orders. The 737-10 order is the lessor's first for the variant, showing confidence in the program despite ongoing certification delays.
The 737-10, designed to compete with Airbus's A321neo, faces a certification timeline that has pushed initial deliveries beyond original expectations. Boeing has said it expects certification in 2026, though the timeline remains subject to FAA review.
Farnborough Airshow Orders Build Momentum
The Farnborough International Airshow, held biennially in the UK, serves as a key venue for aircraft order announcements. The SMBC deal adds to a series of commitments expected during the week-long event, which typically generates tens of billions of dollars in orders.
At the previous Farnborough event in 2024, Boeing secured orders for more than 100 aircraft from various customers. The 2026 edition is expected to see similar activity as airlines and lessors lock in delivery slots amid production constraints across both Boeing and Airbus.
Boeing shares rose 1.8% in pre-market trading following the announcement. The stock has gained 12% year-to-date, outpacing the S&P 500's 8% advance. The broader aerospace and defense sector has benefited from sustained travel demand and airline fleet modernization programs.
Forward Outlook
The order provides Boeing with additional production visibility as it works to ramp up 737 MAX output to 50 aircraft per month by 2026, up from current levels of about 38. For SMBC Aviation Capital, the deal secures delivery slots for the 737-10 variant, which it will lease to airline customers globally.
The transaction is subject to customary closing conditions, with deliveries expected to begin in 2028, according to a person familiar with the matter.
This article is for informational purposes only and does not constitute investment advice.
