SMBC Buys Aircraft From Boeing

By Eric Pfanner

TOKYO--SMBC Aviation Capital Ltd., an aircraft leasing business controlled by Sumitomo Mitsui Financial Group Inc. (8316.TO) of Japan, said Monday it had ordered $8.5 billion of aircraft from Boeing Co. (BA) to serve an expected surge in demand for air travel in Asia.

The order is for 80 Boeing 737 Max 8 single-aisle jets, a new version of the aircraft manufacturer's longtime workhorse for short- and medium-haul flights. Executives of SMBC and Boeing said they expected much of the demand for the planes to come from low-cost carriers, which are gaining ground in Asia after growing rapidly in the U.S. and Europe.

Peter Barrett, chief executive of SMBC Aviation, which is based in Dublin, said at a news conference that the order was the largest purchase of the 737 Max by a leasing company.

The deal helps shore up Boeing's position in Japan, historically one of the company's strongest markets, as rival Airbus Group NV (AIR.FR) makes inroads. In July, SMBC Aviation said it was buying 115 single-aisle aircraft from Airbus for $11.8 billion.

Sumitomo Mitsui has been expanding its aircraft leasing business in an effort to look for new areas of growth beyond traditional lending, a stagnant business in Japan.

Write to Eric Pfanner at eric.pfanner@@wsj.com

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