Aviation Capital Group (ACG) plans to keep expanding after a recent large Boeing order, believing it is "critically important" to stay among the world's top 10 aircraft lessors as the industry consolidates, its chief executive said.
ACG ordered 50 Boeing MAX jets this month, split evenly between the 737-8 and 737-10 variants. The deal brings to more than 500 the number of aircraft it owns, manages or has on order. It is now the lessor with the largest order book of MAX 10s.
"I think what you're seeing now is a very different ACG than the past and that's because the industry has changed," CEO Tom Baker told Reuters, citing a more international, sophisticated and consolidating sector.
"We want to be large enough to be relevant to our customers. We do think being top 10-ish is critically important. We do need to get bigger over time because scale is becoming more important," he added.
Tom Baker was speaking on the sidelines of the Airline Economics conference in Dublin, the leasing industry's largest annual gathering where most executives were predicting another wave of consolidation.
California-based ACG will remain "disciplined buyers," Baker said. It recently withdrew from bidding for Macquarie AirFinance, a rival with more than 300 owned and committed planes that is 50%-owned by the Macquarie Group.
"When you look at Macquarie, we already have a platform so we're not going to pay for that and we believe that there are some bidders out there who are willing to pay for the platform," said Baker, who described the sales process as "very competitive".
The recent Boeing order ensures ACG, a subsidiary of Tokyo Century Corp, has a steady stream of deliveries to 2033. Baker said he was confident that the larger MAX 10 plane would be certified this year.
"Banking on the government is always a tricky thing, but we're very confident. We do think it will happen, and I personally think it will happen this year," he said.
