Cash-rich company prepares for 'upturn' by initiating plans to expand portfolio to 100 aircraft within five years

Singapore Aircraft Leasing Enterprise (SALE) has launched internal studies into new orders with Airbus and Boeing as it seeks to expand its portfolio to about 100 aircraft within five years. The company, meanwhile, reported healthy profits for the year ended 31 March.

Managing director Robert Martin says orders could be placed over the next year depending on the extent of discounts offered by the manufacturers.

"Looking at where we are in the cycle, it is quite obvious that to revisit our orderbook during the downturn makes sense," he says.

"We have always positioned ourselves carefully, so we are open to looking at the [Boeing] Next Generation 737, Airbus A320, Airbus A330 and Boeing 777.

"The timing is not decided. But this year will certainly be the lowest point of orders over the last cycle. We need to is evaluate whether prices are going to go lower."

Owned by Singapore Airlines, Boullioun Aviation Services and two Singapore government investment arms, SALE has a portfolio of 41 aircraft, heavily focused on the Airbus A320 family and Boeing 777-200/300. It has outstanding orders for 31 aircraft - almost all A320-family narrowbodies due for delivery by 2008.

"Our view is that the best time to position yourself for the upturn is during the downturn. We are well cashed up…so we are in a strong position going forward," says Martin. He says the company's aim of achieving a portfolio of about 100 aircraft within five years still stands, but is not a fixed target.

"At the end of the day 100 aircraft may not be right. It all depends on the market," he says.

For the year just ended, SALE recorded a pre-tax profit of $47.5 million, reduced to $37 million by a one-time charge for the termination of a marketing agreement with Boullioun. This compares with a pre-tax profit for the previous year of $41.4 million. Revenue for the year grew 13% to $155.6 million. Total assets have grown to around $2 billion.

Source: Flight International