United signs lease agreement for 20 A321neos with SMBC Aviation Capital
SMBC Aviation Capital has signed definitive lease agreements for 20 A321neo aircraft with United Airlines, previously announced as part of the US carrier’s fleet plan in April.
The aircraft are scheduled for delivery from 2026 and will come from SMBC Aviation Capital’s direct Airbus orderbook. “The relationship between SMBC and United has never been stronger and these leases are a meaningful part of our efforts to optimise our balance sheet and increase our return on capital,” commented Michael Lekinen, United’s chief financial officer.
This deal announcement augments a recently completed sale and leaseback transaction (for 20 737 MAX 8 aircraft) completed between the two parties. In April, United stated it had signed “letters of intent with two lessors to lease 35 new A321neos with CFM engines expected in 2026 and 2027”.
In its first-quarter earnings call (delivered in April 2024), United noted that although “the demand environment remained strong with a double-digit increase in business demand quarter over quarter, as compared to pre-pandemic,” it nevertheless had to “[adjust its] fleet plan to better reflect the reality of what the manufacturers are able to deliver”.
During the Q1 earnings call, United Airlines CEO Scott Kirby explained that despite “meaningful year-over-year improvement in the first quarter,” the airline nevertheless faced “significant aircraft delays”. However, Kirby concluded on an optimistic note, highlighting that “[United has] been able to find ways to offset most of those headwinds”.
With ongoing manufacturing and certification delays impacting United’s ongoing fleet expansion plans, as of April, United anticipated the delivery of 61 narrowbody aircraft and five widebodies before the end of the year; down from an initial expectation of 101 narrowbody deliveries as of the beginning of 2024. Subsequently, securing supplemental options from lessors such as SMBC Aviation Capital will continue to form a key component of United’s strategy.
United expects to take delivery of approximately 100 narrowbody aircraft on average each year during the three year period beginning Aril 2024.
