AerCap Airbus A321neo and A320neo
Lessor AerCap has placed its first direct order with Airbus since December 2017, announcing an agreement for 100 A320neo family aircraft today. After stating many times during earnings calls that AerCap would not place a new order until the price and terms are right, CEO Angus Kelly must have concluded that now is the time.
Airbus specifies the order for 23 A320neos and 77 A321neos. Of the 100 aircraft, 45 are previous options that are part of last year’s deal with Spirit Airlines to acquire its order for 52 aircraft plus 45 options. The remaining 55 aircraft announced today are new. Airbus will deliver the aircraft to AerCap between 2028 and 2034.
In a media statement, Kelly says: “This order for 100 A320neo Family aircraft reflects our strong belief in the long-term demand for these highly efficient aircraft and will help meet the continued demand we see from our customers for both growth and replacement needs. This landmark transaction ensures that AerCap will continue to lead the industry in fleet modernisation well into the next decade.”
Benoît de Saint-Exupéry, Airbus EVP Sales of Commercial Aircraft, adds: “This order is the largest single direct order for the type ever placed by AerCap with Airbus, and is a powerful endorsement of the A320neo Family’s enduring value and market-leading performance.”
During the FY25 earnings call, Aengus Kelly and CFO Peter Juhas explained that AerCap grew its portfolio by 103 aircraft thanks to the agreement with Spirit Airlines and another one with Virgin Atlantic for the sale and leasebacks of A330-900s. Kelly said that this confirmed that AerCap can grow without placing new orders, but added: “That’s not to say that we won’t order with the OEMs. I’m delighted to order with them. But it has to be on terms that make sense for our customers. (…) So, I would say, if the right opportunity comes, of course, we will.”
The new order brings AerCap’s unfilled orders for the A320neo family to 261 aircraft, with no deliveries reported so far this year. On January 1, the lessor also held orders for the six Virgin A330-900s and 92 Boeing MAX, but five MAX have been delivered in January and February.
Frontier
Also mentioned in AerCap’s release today is a long-term lease agreement with CFM for 48 LEAP-1A engines through its joint venture, Shannon Engine Support (SES). This agreement is related to the announcement by US ultra-low-cost carrier Frontier Airlines in February that it will terminate the lease contracts for 24 A320neos early. They will be returned to AerCap this Q2 instead of being redelivered over the next two to eight years, as confirmed on March 11. This reduces Frontier’s leasing expenses by $400 million, offset by non-cash charges this year of $125 to $175 million, plus early return costs of $75 to $95 million.
The AerCap statement says that the CFM engines will become available for long-term lease agreements from Q2. It is not clear if this means that AerCap/SES will offer the LEAP-1As as spares only, resulting in the parting out of the aircraft. Various young A320neo aircraft have recently been parted out because the value of the engines exceeds that of the airframes.
Frontier said in an SEC filing that AerCap has also agreed on March 11 on the sale and leaseback of ten A320neos that are scheduled for delivery in 2028 and 2029. Frontier has pushed back deliveries of 69 A320neo family aircraft from 2027-2030 to 2031-2033.
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