A commitment from Doric Lease Corp to potentially acquire twenty new Airbus A380s could open the door to new operators introducing the type into their fleets from 2016, according to Airbus officials. The company this week signed a Memorandum of Understanding (MoU) at the 50th Le Bourget Airshow in Paris, France as it continues to grow the value of its leasing portfolio.
Although not necessarily a household name in the industry, Doric Lease Corp is actually ranked as the third largest wide-body lessor worldwide and the only leasing vehicle currently involved providing customers with A380s. Although International Lease Finance Corporation (ILFC) previously placed an order for the Super Jumbo, a restructuring of the business due to the global financial crisis and the resultant deferral of deliveries meant these assets lost market value and the order was ultimately cancelled.
Doric Lease believes that the A380 is a great business asset and as airport congestion continues to be a growing problem, will act as an opportunity for the placement of these additional aircraft. The company already owns 18 A380s that were acquired under sale-and-leaseback deals are flying with Emirates Airline and Singapore Airlines under operating leases. According to Airbus executives, the lessor can help it expand its customer base with operators that would struggle to finance an order directly or prefer the structure of an operating lease. “We know that some airlines need the aircraft but they’re reluctant to fund,” Fabrice Bregier, Chief Executive Officer, Airbus told reports at the Paris Air Show.
With this investment, Doric will offer a tailored A380 leasing solution and will make the aircraft even more accessible to both new and existing A380 operators around the world. “The A380 offers us a unique opportunity to continue growing Doric’s aviation platform by establishing ourselves as a lessor with a forward-order portfolio of 20 A380s to market with existing and new customers worldwide,” said Mark Lapidus, Chief Executive Officer, Doric Lease Corp.
“We will be able to provide turn-key A380 ownership solutions to airlines, allowing them to benefit from operating this fantastic aircraft. The A380 offers airlines a great opportunity to provide a superior product and travel experience while strengthening revenue generation. We are delighted to be part of the long term success of the A380,” he added.
These new aircraft will deliver at a time that Doric Lease’s existing A380s are coming to the end of their existing leases and could make ideal replacement aircraft on a like for like basis. The Irish lessor then has the issue of reconfiguring the older aircraft and remarketing them to new customers, but Lapidus believes there is a strong demand for the type in the second-hand market. “I'm actually already seeing interest from customers for the first A380s coming off lease at Singapore Airlines in 2017/18," he said.
A more than doubling of its A380 fleet would appear a bold move for the leasing specialist but if anything, Lapidus believes there could be potential to add further orders in the future and would be open to working with Airbus to fill the small number of vacant delivery slots that it has available in 2015. “If anything, we are perhaps under-ordering the A380,” he said. “We see how airlines that do not yet have the A380 are interested in it and approach us and ask questions, which shows us that there is pent-up demand for this aircraft.”
There remains a general excitement about the A380 but the aircraft has actually been in service for almost six years during which time the in-service fleet of over 100 aircraft has accumulated over 920,000 flight hours in close to 110,000 commercial flights. To date 40 million passengers have already flown onboard an A380 and according to the manufacturer an A380 either takes off or lands every six minutes at one of the 30 airports where it currently operates.
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