Dissing the NEO

In advance of its launch of the Airbus A320NEO (new engine option), several leasing companies had signalled they were not in love with the concept, in part over concern what the impact would be on residual values of the existing fleet.

But Kostya L. Zolotusky, the managing director of capital markets development at Boeing Capital says the view is stronger than that. The NEO "is opposed by every source of commercial aircraft finance," he argues. "It is universal, we have never seen anything like that."

The lease rates and residual value of the A320 have been slipping in recent months, he adds. Whereas a few months ago lessors were hunting for 737 and A320 sale-and-lease back deals, he says the market is now more cautious about the Airbus single aisle product.

There's more to the comments, though, than mere entertainment value. Zolotusky may be giving an interesting insight into Boeing's internal deliberations on what, if anything, to do with the 737. Boeing's reluctance to consider a 737NEO appears at least partly driven by concern it could upset the important leasing customer community.

If lessors warm to the A320NEO, it may sway Boeing as it defines its own narrowbody product strategy.

Tags: tw99, NEO, Airbus, Boeing