International Lease Finance (ILFC) has again rejected an entry into the rapidly expanding regional jet market, after seriously considering an order for up to 150 50- to 70-seat aircraft.
In what would have represented a significant switch in strategy, ILFC had been close to a deal with Embraer to order 75 ERJ-145s and possibly larger ERJ-170s, as well as place options for another 75 aircraft. Negotiations were understood to have already resulted in the two companies reaching a tentative agreement for an order which would have been announced at this month's Paris air show, but the leasing company's board decided last week not to pursue the plan.
Industry sources suggest that had ILFC been given the green light to enter the regional market, the company could have built a portfolio of regional aircraft types.
ILFC rival GE Capital Aviation Services (GECAS) spearheaded the leasing company's entry into this market with simultaneous orders for 50 ERJ-170s, the same number of Fairchild Dornier 728JETS and 15 Bombardier CRJ200s, 25 CRJ700s and 10 CRJ900s. GECAS holds options on another 300 regional jets. All the models ordered are equipped with engines built by GECAS sister company General Electric Aircraft Engines.
ILFC has long been mulling over whether to follow suit, having made clear its core business is focused on aircraft above 100-seats.
At issue is the limited number of people employed by ILFC and the revenue per head generated. It requires approximately the same number of staff to manage a Boeing 747 lease as it would a small regional jet. In addition, the regional market is viewed as financially risky for lessors.
Source: Flight International
